Listing ID: 83959
Business Overview
If your career dream path includes what you previously thought was unattainable – read on. The absentee owner of a large, downtown restaurant/tavern is retiring from a long and successful career in an unrelated field and is looking to pare down his investments. This means selling his very attractive 4,000 square foot urban restaurant/tavern (with indoor capacity for 140 and covered outdoor seating for an additional 30 during normal weather conditions) to a talented, but undercapitalized buyer.
Located in an attractive Roaring 20’s era building on the main street of an important mid-Michigan city, the building which is both appealing and in great shape is owned by the seller who will lease the restaurant/tavern (which occupies the entire main floor of the building) for a very buyer friendly $3,000 monthly triple net rate.
During a previous partnership between two unrelated owner-operators of the restaurant/tavern, there were issues between the partners causing the current owner to buy-out the restaurant and the lease. The current owner took over the restaurant, replaced the entire staff, made the environment both spotless and inviting, and things took off…and then Covid hit.
Just as the business was realistically looking at reestablishing its former low seven figure revenue level, the business was shuttered for six of the next 11 months. And upon reopening, lunch business was negatively impacted by the large quantity of downtown office employees working remotely from their homes.
So what to do? Well, the lunch trade has increased sharply in 2022 as downtown workers are resuming their former office hours, and the restaurant has established itself as a destination dining spot for those who want to enjoy its urban ambience, easy parking, outdoor seating, great food and stellar service from the restaurant’s 20 person staff.
In 2020 (the first year of Covid) revenues were off 55% from 2019 levels. In 2021 revenues rebounded nicely (doubling from 2020’s heavily Covid impacted levels) to 90% of 2019 levels. In addition, the restaurant’s owner-seller took advantage of both the lengthy Covid shutdowns in 2019-2020 and meaningful forgiven PPP loans plus grants to Covid impacted restaurateurs to make significant upgrades to the kitchen and bar areas. And in the “rather be lucky than smart category,” the city has received funding and construction has started on two major development projects literally two blocks from the restaurant/tavern. The successful buyer of this business can look forward to a major events center and a large apartment complex to bring in a significant amount of brand new (and recurring) restaurant traffic.
To keep the solid momentum going, the owner proposes to sell the restaurant, all of its fixed assets, and the full liquor license for a total of $249,000 – that’s right, $249,000 all in. And it gets even better. The seller will carry a $190,000 5.0% 60 month seller note and enter into a five year lease with the buyer with an option for a second five year term. This means that for only $59,000 (plus the cost of the transferred inventory) of buyer cash the entrepreneurial dream can indeed become a reality. And there is no banking necessary!
To learn more about this exceptional opportunity and to make an appointment to see and tour the facility and meet the seller over a free meal, please contact Mike Greengard (mgreengard@praxisbusinessbrokers.com or 616-450-0707).
Financial
- Asking Price: $249,000
- Cash Flow: N/A
- Gross Revenue: N/A
- EBITDA: N/A
- FF&E: N/A
- Inventory: N/A
- Inventory Included: Yes
- Established: N/A
Detailed Information
- Property Owned or Leased:N/A
- Property Included:N/A
- Building Square Footage:4,000
- Lot Size:N/A
- Total Number of Employees:20
- Furniture, Fixtures and Equipment:N/A
Located in a 20's era building on the main street of an important Michigan city. The building is an attractive 4,000 square foot urban restaurant/tavern that seats 140.
Additional Info
The business has 20 employees and is situated in a building with approx. square footage of 4,000 sq ft.
The real estate is leased by the company for $3,000 per Month
Why is the Current Owner Selling The Business?
There are all types of reasons why individuals resolve to sell businesses. Nevertheless, the true factor and the one they say to you might be 2 entirely different things. As an example, they might state "I have way too many other responsibilities" or "I am retiring". For many sellers, these reasons are valid. But, for some, these may simply be reasons to try to conceal the reality of transforming demographics, increased competitors, recent decrease in incomes, or an array of various other factors. This is why it is really vital that you not count totally on a seller's word, yet rather, make use of the vendor's response along with your overall due diligence. This will repaint an extra sensible picture of the business's current situation.
Existing Debts and Future Obligations
If the existing entity is in debt, which lots of businesses are, then you will certainly need to consider this when valuating/preparing your deal. Many businesses borrow money in order to cover things like supplies, payroll, accounts payable, etc. Bear in mind that sometimes this can suggest that revenue margins are too small. Many businesses fall under a revolving door of taking loans as a way to pay back various other loans. In addition to debts, there may additionally be future commitments to consider. There might be an outstanding lease on tools or the structure where the business resides. The business may have existing contracts with vendors that must be fulfilled or may result in charges if canceled early.
Understanding the Customer Base, Competition and Area Demographics
Just how do operating businesses in the area bring in new clients? Many times, operating businesses have repeat clients, which create the core of their everyday earnings. Certain elements such as new competition growing up around the area, road building, as well as employee turn over can affect repeat consumers as well as adversely impact future earnings. One vital point to take into consideration is the area of the business. Is it in a highly trafficked shopping mall, or is it hidden from the main road? Undoubtedly, the more people that see the business on a regular basis, the greater the chance to build a returning client base. A last idea is the general location demographics. Is the business placed in a densely inhabited city, or is it located on the outside border of town? Exactly how might the regional typical household earnings impact future earnings potential?
