Selling a restaurant property was already challenging before the Covid-19 era, but it has been a real task for the last 2 years. In the years before Corona, the supply was already higher than the demand. Some have already talked about a consolidation of the catering industry as more and more catering establishments have given up their business operations, often due to a lack of successors.
But why is there a lack of successors?
We have been observing for a number of years that the young generation in families with a catering business do not want to follow in their parents' footsteps. The catering business prepares a lot of work at times when friends and acquaintances are enjoying their free time. Of course, not everyone likes that and challenges young relationships / families. You have also seen for yourself how difficult it was for your parents and how challenging a catering business can be for a family. Work-Lifetime Balance has been at the top of the priority list of young families for years. But a restaurant can rarely offer that.
But not only the family-unfriendly working hours, also the pay in the industry has been a big issue for years. This means that it is very difficult to recruit or retain staff. In addition to the well-known factors, these points are also decisive for whether young restaurateurs want to buy their own restaurant.
Especially in times of the pandemic, many specialists and service workers have said goodbye to the industry and looked for new tasks and jobs. And only a few come back to the catering trade. If a restaurateur is toying with the idea of buying a restaurant today, he must above all pay attention to the personnel planning in the business plan.
Which brings us to the topic. The business plan comes more and more into focus. Since the outbreak of the pandemic, banks have only been very selective in granting financing for the acquisition of a restaurant property. Before the outbreak, an equity ratio of ~ 20% was sufficient, but not a few banks are currently charging up to 50% equity in the purchase price. Some institutes now do not grant loans for such a company.
What does this mean for the sale of a catering property?
It has definitely not gotten any easier to sell a restaurant these days. Then of course the question immediately arises: On your own or with a broker?
Now of course everyone has to answer this question for themselves, but of course we have good arguments which speak for a broker and even more for a gastro broker.
1. Appraisal: The appraisal alone is very special for a business and especially for a restaurant and many factors have to be taken into account that are often only known to the specialist broker. And only he can then use this positively in the sales process.
2. The right sales price: Once the value has been determined, this does not mean that the right sales price has also been found at the same time. Of course, the pandemic situation means that the demand for gastronomy real estate was and still is noticeably declining. All the more you need a purchase price in the sales process that is not too ambitious, but also not set too low. This is where market expertise is required. Because you only have the "first premium" with your offer on the market once. A price correction during the sales process is never good.
3. Use the right channels: Where do I advertise my restaurant sale, my ad? Of course, anyone can use the large portals and create advertisements. However, only a few restaurateurs are currently actively searching and are therefore rarely active on the portals. Databases, restaurateurs networks, social media in general are in demand here and the know-how to use them. These are the USPs, the features and services that only a specialist broker can offer and which very often lead to success. We have been observing for some time that the major real estate portals no longer play a major role in the sale of catering properties.
4. Financing for the buyer: If you have found a prospective buyer willing to buy and have concluded the negotiations, most potential buyers then need your house bank to finance the purchase price. In addition to the above-mentioned increased share of equity, the banks naturally want a guarantee that the borrower can generate the monthly capital requirements and also live from the catering business. This is where the forward-looking business plan comes into play. The buyer does not always know all the key figures and can integrate them into a business plan. Here we help as a special broker, or create the complete business plan for the buyer. This very often helps for a positive assessment by the bank and for a credit decision of the same kind.
In summary:
We can claim that selling a restaurant or a general catering property is certainly not a sure-fire success. In addition to the valuation, the resulting, perfect sales price with which you go to the market and the know-how to use the right channels to reach the right, potential buyers, since the outbreak of the pandemic, forward planning has become even more important for the buyer.