Business Overview

This technology firm has developed a fully-integrated and online and mobile food-ordering solution for restaurant chains. This seamless and fully customized and branded 3rd party ordering solution processes ~ 7,000 orders per day for an estimated 500 restaurant locations owned by 100 different brands, 72% of which are POS integrated (others may use ticket printers or even facsimile). They have 1.4 million active users and 5 million unique customers have placed 10 million orders through the service. While only on monthly contracts, customers typically remain with the firm for 5 years largely due to their satisfaction with the solution whose customized development and integration includes: conversion to work with POS software and merchant processing, menu option and coupon programming, delivery service set-up and web page branding development (all of which may take up to 6 months). While the POS system had been bundled with inventory management, online ordering functionality now impacts the POS purchase decision.

This efficient organization is managed out of a small 1,000 square foot office that leases for $1,300 per month. As the business could be operated virtually it could readily be relocated.

Some providers offer non-branded or non-POS integrated tablet-based solutions. These may work for single locations but are rarely customized or seamless. Chains with more than 200 locations are likely to develop their own solution in-house, as monthly subscription fees may not be cost effective, even if passed onto franchisees. This company competes in the 5 to 200 unit restaurant space. These chains are large enough that initial development and integration procedures do not dissuade them. They value the customized branding and programming flexibility, while the set-up expense and subscription fees are not cost prohibitive.

The company can achieve explosive growth via a number of means. With their value proposition they can focus on appointing a formidable sales team and implement a marketing strategy to aggressively pursue new accounts as well as the infrastructure to support it. This may include migrating programing offshore, providing or partnering with a merchant processor (they refer this lucrative service out), or bundling their service with a POS software or inventory management system provider. With any of these multi-faceted approaches, integration complications may be minimized while the bundled solution may facilitate below market pricing – thus proving a cost saving option on several fronts!

Financial

  • Asking Price: $595,000
  • Cash Flow: $115,314
  • Gross Revenue: $478,122
  • EBITDA: N/A
  • FF&E: N/A
  • Inventory: N/A
  • Inventory Included: N/A
  • Established: 2005

Detailed Information

  • Property Owned or Leased:N/A
  • Property Included:N/A
  • Building Square Footage:1,000
  • Lot Size:N/A
  • Total Number of Employees:4
  • Furniture, Fixtures and Equipment:N/A
About The Facility:

This efficient organization is managed out of a small 1,000 square foot office that leases for $1,300 per month. As the business could be operated virtually it could readily be relocated

Is Support & Training Included:

4 Weeks at 20 hrs/wk

Purpose For Selling:

Personal

Pros and Cons:

Some providers offer non-branded or non-POS integrated tablet-based solutions. These may work for single locations but are rarely customized or seamless. Chains with more than 200 locations are likely to develop their own solution in-house, as monthly subscription fees may not be cost effective, even if passed onto franchisees. This company competes in the 5 to 200 unit restaurant space. These chains are large enough that initial development and integration procedures do not dissuade them. They value the customized branding and programming flexibility, while the set-up expense and subscription fees are not cost prohibitive.

Opportunities and Growth:

The company can achieve explosive growth via a number of means. With their value proposition they can focus on appointing a formidable sales team and implement a marketing strategy to aggressively pursue new accounts as well as the infrastructure to support it. This may include migrating programing offshore, providing or partnering with a merchant processor (they refer this lucrative service out), or bundling their service with a POS software or inventory management system provider. With any of these multi-faceted approaches, integration complications may be minimized while the bundled solution may facilitate below market pricing – thus proving a cost saving option on several fronts!

Additional Info

The business was established in 2005, making the business 17 years old.

The company has 4 employees and resides in a building with disclosed square footage of 1,000 sq ft.
The building is leased by the company for $1,300 per Month

Why is the Current Owner Selling The Business?

There are all kinds of reasons why people choose to sell companies. However, the true factor and the one they say to you might be 2 completely different things. For instance, they may say "I have way too many various obligations" or "I am retiring". For many sellers, these reasons are valid. But also, for some, these may just be justifications to try to conceal the reality of transforming demographics, increased competition, recent decrease in revenues, or a range of other factors. This is why it is very important that you not rely completely on a vendor's word, yet rather, utilize the seller's solution combined with your general due diligence. This will repaint a more sensible picture of the business's present circumstance.

Existing Debts and Future Obligations

If the existing entity is in debt, which many businesses are, then you will certainly have reason to consider this when valuating/preparing your deal. Numerous businesses take out loans so as to cover things like stock, payroll, accounts payable, etc. Bear in mind that in some cases this can suggest that revenue margins are too small. Numerous organisations come under a revolving door of taking on debt as a way to pay back other loans. In addition to debts, there may additionally be future commitments to take into consideration. There may be an outstanding lease on equipment or the building where the business resides. The business may have existing agreements with suppliers that need to be satisfied or might cause charges if terminated early.

Understanding the Customer Base, Competition and Area Demographics

How do operating businesses in the area attract new clients? Often times, companies have repeat clients, which create the core of their everyday revenues. Certain aspects such as new competitors growing up around the location, roadway construction, and personnel turn over can affect repeat clients as well as negatively impact future earnings. One crucial thing to take into consideration is the placement of the business. Is it in a highly trafficked shopping center, or is it concealed from the main road? Undoubtedly, the more people that see the business often, the better the chance to build a returning client base. A last thought is the general location demographics. Is the business placed in a largely populated city, or is it located on the edge of town? How might the local mean family income influence future earnings prospects?