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The Market For Buying Restaurants,
Bars & Nightclubs
by Steven D. Zimmerman,
Restaurant Realty Company
April 2004
There is a strong buyer pool as a
result of the following:
-
the
high unemployment rate due to
corporate layoffs and downsizing;
-
the
large number of foreigners that want
to get into this business because
this an easier entry business
opportunity compared to more complex
businesses;
-
buyers want to put their whole
family to work in the business;
-
people want to be their own boss;
-
buyers want to express their
creativity and
-
some
talented chefs are being financed by
investors who like their food
Most all of our transactions are all
cash transactions and the serious
buyers seem to have plenty of cash
as a result of credit lines from
their homes, money they have pulled
out of the stock market, retirement
money for those baby boomers that
were asked to take early retirement,
savings and other sources.
There are a high percentage of
buyers that are looking for
businesses that generate cash flow
so if you own a business that falls
in this category there is a big
demand for this type of business
assuming the business is reasonably
priced. There are a number of
buyers that are looking for
businesses with real estate as they
want to build equity rather than pay
rent and some of these buyers are
coming out of 1031 tax deferred
exchanges from selling other pieces
of real estate. There are a
number of buyers that have their own
concept and are looking for a well
located restaurant with a good lease
that they can change with a modest
cosmetic remodel.
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