About this event:

Are you thinking about buying a business? Looking for businesses for sale? Don’t know where to begin? Attend the Business Exchange Virtual Event and in 1.5 hours you will learn the ins and outs of buying a business in Canada and learn where to find a business for sale in Canada.

On July 20th learn from our expert panel on where to find businesses for sale, how to get business financing, legal and financial considerations, the benefits of using a business broker, and is franchising right for you.

If you are serious about getting into business, you won’t want to miss this event.

📅 Date: Wednesday, July 20, 2022

⌚ Time: 12:00 PM – 1:30 PM.

🎦 Event Type: Virtual Event. 

🎫 Admission: FREE to attend. Please make sure to register to get the access pass.

Reasons to attend?

• Avoid costly mistakes when buying a business or franchise
• Learn about the due diligence process
• Free legal advice that you need before starting a business
• Tips on structuring your business to reduce your taxes
• Learn about the business financing options available in Canada
• Benefits of using a business broker and realtor for the buying process
• Where to find your next business opportunity

Meet Our Speakers

🎤 Pamela Labelle – Business Exchange, CEO & President

Topic: Where You Can Find Businesses for Sale

🎤 Armond Azoomanian – Homelife/Response Realty Inc ., Broker

Topic: Benefits of Using a Business Broker to Buy a Business

🎤 Tyril Froese – MNP, CPA, Partner, Professional and Private Enterprise

Topic: Financials of Buying a Business

🎤 Frank Robinson – Cassels Brock & Blackwell LLP, Business Lawyer

Topic: Legal Aspects of Buying a Business or Franchise

🎤 Shawn Allen – Matrix Mortgage, Principal Owner

Topic: Getting Financing to Buy a Businesses

🎤 Ryan Hillis – Meltwich Hospitality Group Inc, VP of Revenue

Topic: Benefits of Buying a Franchise Business

These events always fill up fast so don’t wait!

Sign-up today: https://thebizex.com/blog/buy-business-canada

The session will be delivered via Zoom and full instructions will be provided by email.

The post Learn How To Buy A Business In Canada! Free Webinar Event appeared first on Business Exchange Blog.

Maybe you are debating, should I buy a business in the restaurant industry or should I start one from scratch? What are the pros and cons of buying an existing restaurant anyway?

When you start your own restaurant, you will be spending a lot of time researching, planning, designing and developing your concept.

You will need to find a location, purchase equipment, set up vendors and get licenses and permits. But an existing restaurant already has this in place.

Pros of Buying a Restaurant

• Existing businesses take less time and effort than starting a new one
• You may have staff in place that are already trained
• Existing sales record and you can evaluate your growth
• A high volume customer base so you have less risk
• If the seller is burned out, you can usually buy for less
• You will have immediate cash flow

Cons of Buying a Restaurant

• You will need to find out why the seller is selling. This may be because of a bad lease, bad equipment, road work, incompetent staff, or inaccurate bookkeeping
• You will need to make sure all past tax obligations are up to date and in order
• There are no guarantees the business will continue to be profitable
• The business may have a bad reputation that may take years to overcome

Sign Up for Newsletters – Restaurants for Sale

Why is the Owner Selling their Business?

Consider this when buying a restaurant: Why is the restaurant owner selling?

There are many reasons as to why a restaurant owner may be selling their business. Some common reasons include: retirement, personal reasons, health issues or relocation.

Another reason may be because the restaurant business is not doing well financially. That is why it is important to ask key questions and always perform due diligence when assessing paperwork. 

If the small business is doing well financially, this might be a good option to explore if you wish to keep the same menu and brand identity. For someone who is looking to start a completely new restaurant concept, purchasing an already established restaurant may not be the best option.

Just because a restaurant may not be doing well financially, it does not mean it should be disregarded. Consider that there is always potential opportunities, although changes may need to be made in order for your business venture to succeed.   

Some questions you may want to ask the seller is:

• How long has the restaurant been operating under the current owner?
• How long has the business real estate been around?
• What makes this a great business for sale opportunity?
• What is the owner including/excluding in the sale? 
• What equipment is offered with the restaurant? 
• What is the history of the business?
• Is it a turn-key establishment?

Money Matters

The key motivation in starting a new business is the pursuit of money and high profits. When getting started with it is important to review all the necessary paperwork before diving right in. Make sure to do your due diligence by requesting financial documents from the past three to five years. Consider hiring a lawyer and accountant to help review and assess whether or not the restaurant business is financially stable and profitable.

Finding the right advisors will help ensure that the business is in great financial and legal shape before purchase. If the seller cannot provide the financial documents, request to have an accountant perform an audit of the business. It is always advised to have both legal and financial advisors when buying or selling a business. 

Location, Leases and Landlords

The success of a restaurant often lies in the location. A high-traffic location with great exposure would be very beneficial for restaurant sales and profits. Location, leases and landlords play a vital role in the restaurant sale. Securing a great location depends on a lease and getting a lease agreement depends on the landlord. 

When buying a restaurant, make sure to get a copy of the lease. Forward a copy of the lease to your lawyer to review and specifically look for any “assignment” language.

In many cases, leases are only transferable when the landlord approves. Depending on the landlord, many prefer the new owner to have prior restaurant experience too. If you cannot get the lease assigned, you will have to negotiate a new lease or find another restaurant for sale location.

The most desirable condition for lease agreements would be to have a long lease, with options to renew. If there is no lease agreement, then there is no tangible property to acutally purchase. 

Here are some important questions to consider when negotiating with landlords and assessing leases:

• Does the lease need to be renegotiated before close? 
• What is the duration of the lease, and is the lease transferable? 
• What is the relationship between the restaurant and landlord? 
• What are the terms of the lease, is there any option to renew or renegotiate? 
• What is the yearly escalation rate of the lease agreement? 
• What is included in the lease agreement? (i.e parking spaces, storage, etc.) 
• What is the designated zoning in the area? 
• Is there a major change in the local customer base?  
• Is there any property or road construction that may affect business?

Liquor Licensing

Does the restaurant you are looking to purchase have a liquor license? If so, will the liquor license also be included in the sale? If the restaurant currently sells liquor to increase profits, it is important to review the conditions of the liquor license because you will need to secure a license as well. 

Check to see that the seller’s liquor license be transferred to you when you purchase the restaurant. Additionally, we recommend that you confirm with the liquor control board to make sure that the establishment is allowed to sell alcohol.  

Depending on where you are operating, transferring liquor licenses can take some time and involve some paperwork, so this issue should be addressed at the beginning of your business negotiations.

Liabilities & Lawsuits

This can be a deal-breaker. You must inquire to see if there are any existing liabilities? Does the restaurant have any past, pending or potential lawsuits? The last thing you want to do is inherit a lawsuit that you had no idea about.

Are there unpaid overtime, unpaid sales taxes, health code violations or other liabilities that could threaten your ability to successfully operate the business? For protection, get the response in writing in case the owner is concealing any legal matters that could come to light later.

When you are purchasing a restaurant you are also assuming the debts of the company. This includes leases and other bills that are still being paid off. Less common, but maybe more importantly, you also need to look for unpaid taxes as well.

Here are some questions to consider:

• Has there been any tax audits in the past five years?
• Proof of Tax Payments such as sales and corporate taxes?
• Any serious outstanding payroll liabilities?

Training & Operations

Purchasing a restaurant for sale is a great business opportunity. There is lots of income that can be made from dine-in and take-out services. The day-to-day operations of a restaurant can be daunting at first. However, if you have the proper training or experience, the transition to restaurant ownership will be much easier. Depending on how much restaurant experience you have, you may require either a lot of training or very little. 

If you do require training for operating a restaurant business, you should include the previous owner in the sales and purchase agreement. In this case, the conditions of the sale would be that they previous owner helps the transition to the new business owner by providing training on operational and day-to-day management. 

Here are some questions to consider about training and operations:

• Is the current owner willing to stay on to train you?
• How long will they stay? With or without pay?
• What training is available and at what cost?
• How well documented are the procedures of the restaurant?
• Are there manuals on company policies and procedures, HR, etc?

Marketing Assets

With online reviews and social media being such an integral part of growing your customer base, many restaurants have an online presence. The sale of the business should include a website, online ordering, email accounts, Facebook, Instagram, Yelp or other online accounts. Access to these accounts should be transferred to you as part of the sale.

Marketing assets and procedures should be included in the transfer of sale. Some marketing questions to consider when purchasing a restaurant are: 

• Do they conduct online or print advertising? 
• What channels of communication do they use? 
• Are there any special deals, promotions or offers that are effective/in use? 
• How is the website maintained and designed? 
• What are the social media accounts that need to be transferred? 
•  Is there a database of clients/customers and how is that maintained or used? 

Advertise Your Business for Sale – Contact Us Today!

Suppliers & Contracts

If you have ever run a family business or have previous restaurant experience you may already have a relationship with the suppliers. If you do not have contacts you will need
the seller to introduce you to existing suppliers.

Ask the seller to provide you a copy of the contract that they have with the current suppliers. This way you will be able to negotiate similar terms or know the market rates for ingredients and equipment, should you decide to go with another supplier.

You should request the following:

• List of vendors with their contact information
• All contracts in place with the vendors
• Are there balances owing to each vendor?
• Do any vendors have a personal guarantee?
• Does the business depend on a key vendor?
• Will the owner finance the transactions?

Food and Safety Certificates

All restaurants require a food safety certificate in order to open their doors. For instance, you will be able to have the certificate transferred to you, in others you will need to obtain your own and the rules for this will vary based on where you are located. Be sure to not overlook this step. Contact your local food and safety office once you acquire the restaurant business.

Intellectual Property

Intellectual property is a term to describe one having rights to something and may apply for a patent, copyright, trademark, etc. Be sure to include specifically what intellectual property will be included in the sale and gain sole ownership over it. This is extremely important if you plan on using the restaurant’s name, menu and overall brand.

Items that should be included are:

• Trade names
• Trademarks Logos
• Recipes
• Copyrights
• Signage

Non-Compete Clause

Is the current owner willing to sign a non-compete clause? 

A non-compete clause protects you from the current owner opening in close proximity to the location where you are purchasing. Independent restaurants are frequently personality-driven businesses that are built on the owner’s recipes, cuisine, and culinary style.

If the seller isn’t willing to sign a non-compete clause, consider why they are not willing to sign, and ask them what their motivations are for not signing. If they are looking to sell their restaurant, only to open a similar restaurant close by, then perhaps find another location.

Competing with a previous owner for market share can result in many things such as: slower traffic, mixed business relations, competition with securing suppliers and potential poaching of trained staff.

In any sense, it is good practice to include a non-compete clause in the purchase agreement. This ensures that you will be able to start your restaurant business without any disruptions or competition from the previous owner.          

The Final Steps

Finalize The Price
After conducting the necessary steps, make sure you find a restaurant for sale that is suitable for your needs. After assessing paperwork and the restaurant as a whole, it is finally time to put a price on your offer. Your offer should be fair and reasonable based on the conditions of the restaurant. Prepare for negotiation and be aware of terms and conditions.
Draft The Agreement
Contract your lawyer to review/draft the sales agreement for you. The sales agreement is a legal contract that documents you and the previous owner’s legal rights and responsibilities in the sales transaction. Usually, the agreement will contain the price, the closing date, warranties, terms, conditions, etc.
Set the Closing Date
The closing date designates when both parties sign the agreement and complete the sale transaction. Both parties will be required to do their due diligence, prepare for the necessary paperwork and meet on a specfic date to sign papers.
Sign The Contract
Once the contract has been drafted, send it to the seller and have it signed. The contract will only be valid once every party signs it. In addition to the purchase and the sales agreement, you need to ask the seller to sign a non-compete clause dictating that they will not open a restaurant that’s similar to yours close by.
Ownership Transfer
On the closing date after signing the sales agreement, you will transfer the money to the previous owner, and the seller will officially transfer the restaurant to you. Any clauses regarding post-sale involvement such as transition periods or training will still need to be fulfilled.

In conclusion, there are a lot of pertinent questions you must ask before you sign on the dotted line. Even if you found a highly profitable and desirable restaurant for sale, you will need to spend hours researching, planning, talking to the right people, asking the right questions. After all the due diligence and hard work, you will be ready to operate your new restaurant business! 

About The Business Exchange

Established since 1998, The Business Exchange specializes in lead generation for a variety of businesses, franchises and commercial real estate for sale. We generate leads through print and online advertising and marketing. We have hundreds of Restaurants for Sale listings available online at The Business Exchange. Call us today at 1-877-337-1188 to find out more information about business listings or ask us how to list your restaurant for sale online! 

The post A Complete Checklist for Buying a Restaurant appeared first on Business Exchange Blog.

Buying Restaurants for Sale: 10 Benefits

Pro 1: You Get to be Creative

A person who wants to buy an existing restaurant must be someone who loves to cook and appreciates the taste and flavour of food. You get to be creative with your menu and decide what ingredients go into the food preparation process. As a result, you will be able to serve delicious food to the public and feel rewarded when people leave you a 5-star review on Yelp, Google & Facebook!

Pro 2: You Will Never go Hungry!

Probably the best benefit of purchasing a restaurant is having access to a limitless amount of food. You will always have food to feed yourself and your family. You will also spend less money on food as you can eat at your restaurant. On top of that, many restaurant owners acquire liquor licenses so they can also serve alcohol in their restaurant to maximize their earning potential.

Pro 3: You Get to Know your Community

A restaurant can be a haven for your local community and neighbours, especially if your establishment is prime located, with high foot-traffic. It will be an excellent opportunity for people to host social gatherings at your venue or pose as an environment to relax after a long day. Additionally, by providing excellent customer service to patrons, it will encourage them to come back and increase your brand exposure by word of mouth. As a result, customers will be more likely to return as frequent patrons and your customer base will grow.

Pro 4: Add Value to What You Believe in

If you believe in the value of veganism, vegetarianism or gluten-free food, then being a restaurant owner may be the best way to showcase your beliefs. Your establishment is the perfect opportunity to encourage people to choose their food that is consistent with your values.

Pro 5: The Industry is High in Demand

On average, Canadians eat out at least once a week, either by doing takeout or going to a restaurant, so the restaurant industry is definitely booming.

Pro 6: Never have a Dull Day in your Life

You tried the typical 9-5 office life and it’s not for you. The challenges you face by opening a restaurant vary day-to-day, which is exactly what running a restaurant is all about.

Pro 7: Technology Saves the Day

To speed up payment transactions, restaurateurs should employ reliable and efficient POS systems when customers pay the bill. Google also offers free tools to use, such as Google Drive that documents all materials and meeting notes, and the Google calendar for organizing staff events. All these tools are free, as long as you have a Gmail account.

Pro 8: You’re the Boss

This is the best part, you make the call from menu selection to the decor.

Pro 9: CSR Initiatives

Giving back is always easier when you own a restaurant, you can sponsor local sports teams, donate food to food banks, host charity events onsite…etc.

Pro 10: Buying a Restaurant can be Simple

Owning a restaurant can still be affordable and easy if you are working with the right real estate agent and seeking the right help. Take the Business Exchange, for example, we have over 200 listings of restaurants with different investment levels to choose from. Our listings of restaurants are located all over North America. We can definitely help you find the right broker to close the deal and the right restaurant listing for your needs!  

Restaurants for Sale: 4 Cons

Con 1: Competition is High

It’s true that the restaurant industry is high on demand, but that also means you will have a lot of competition around you. This is particularly true in high-traffic neighbourfoods and areas.

Con 2: Ensure You Have Enough Cash Flow

Do your due diligence when you’re researching restaurant business for sale, decide whether you want to buy a small restaurant or large restaurant. Smaller restaurants will need a smaller amount of loans and funding, but you run the risk of not having enough patrons because your restaurant isn’t as well-known as other well-known establishments.

Con 3: Tough to Make a Profit in the First Year

Even a busy restaurant may not be making a profit in the first year because you need to account for the initial expenses that are put into opening the venue in the first place.

Con 4: Talented & Loyal Employees are Hard to Come Across

Finding good employees is one thing and keeping them is another thing. Obviously business owners want to retain good and loyal employees.

About the Business Exchange

Established in 1998, The Business Exchange specializes in lead generation in the franchise and business opportunity industry, in print and online. Call us today at 1-877-337-1188 to learn more about our Restaurant listings for Sale and Request a Quote! 

The post Benefits of Buying Restaurants for Sale appeared first on Business Exchange Blog.

There are a number of factors that contribute to the success of buying and starting a restaurant. Even though many people have dreams of owning their restaurant, in order to be successful it will require a lot of patience and strategy. At the end of the day, owning a restaurant business and being able to operate it successfully may not be for everyone.

Questions to Ask Before Buying a Restaurant

Studies have shown that about 75% of restaurants fail in the restaurant industry, so why would this appeal to anyone who is thinking of buying an existing restaurant? People believe that a restaurant will give them the lifestyle they always dreamed of.

But before you take the leap of faith of becoming a restaurateur, ask yourself the following questions:

• Are you willing to work 7 days a week?
• Can you live for a year without earning a salary?
• Do you have the necessary funds to support yourself and your business for the first year?
• Are you a people person?
• Do you perform well under pressure?
• Are you the sort of person who will roll up your sleeves and wash dishes if need be?
• Is your small business fully equipped to open to the world?

Restaurant for Sale: What to Look for

Location, Location, Location

Like real estate, finding a prime location is extremely important. If your restaurant is located in an accessible and populated area, then the restaurant is likely to survive. The downside is that the competitors will run rampant in high traffic areas that are well-sought after. In contrast, if you buy a restaurant in a quiet neighborhood, it would be harder to survive.

Why do you think food courts do so well? It’s because they are located in malls, office buildings, highly populated areas.

Patience, patience, patience

Unless you are Gordon Ramsey or Jamie Oliver, your newly opened restaurant will likely not be packed and it will be hard to get a reservation for the first couple of months. Now is the time to learn how to persevere and believe in yourself and your business. It will most likely take more than a year for your restaurant to break even.

Detailed Business & Marketing Plans

A business plan will serve as a road map to guide your business and business decisions. Banks will want to see your business plan to obtain financing, and it will help you to govern your business when it comes to staff and inventory management. Remember a good business plan is fluid and can be changed as your business grows.

How to Buy a Restaurant in 5 Easy Steps

The procedures of buying a restaurant can be confusing and complicated, but it does not need to be, we’ve boiled down to 5 essential steps that will assist you with the process.

1. Check the Market for Restaurants for Sale

The first step in buying a restaurant is to see what restaurants are available. Restaurant listings will have a lot of useful information that will give you valuable insights into the choices you have.

Nevertheless, there is still important information you should look into when looking into buying a restaurant that you’re interested in.

1. Competitor Analysis: You conduct a competitor analysis to know what kind of restaurants are nearby. We recommend going in as a customer to scout out their décor, customer service and customer base, and of course the quality of their food. Needless to say, you only want to do a “competitor analysis” when it is a business that is similar to yours.
2. Cash Flow: If you’re buying a restaurant you will want to find financial data about the business and its profitability.
3. Platforms for Restaurant Listings: Another way you can dig more information about a restaurant is by looking at reliable and versatile platforms, that will showcase a list of restaurants for sale. Take the Business Exchange for example; we have 100s of restaurants for sale and restaurant franchises, to choose from.

2. Receive Funding from Banks or Third-party Lenders

Your credit will play a major role in receiving loans from banks. Obviously, if your credit rating is good, banks will be more likely to lend you money. If you fail to receive a loan from a bank because of your credit rating, then seek the help of third-party lenders.

3. Hire a Lawyer and Negotiate a Contract

After establishing your credit and have lined up your funds, you can negotiate with the owner to buy the restaurant. This is where you hire a lawyer that will prepare all the legal documents, help with negotiating a price, and inquire about all the assets and liabilities of the restaurants.

­­4. Create Transition Plans for the Restaurant

After you signed on the dotted line, you have officially acquired the restaurant, you can now brainstorm your transition plans. Usually, there are two types of transition plans a new restaurateur will implement:

Get to Know your Staff

Before your grand opening, now is a good time to get to know your new employees. Our advice is to be as transparent as you can because you want to have a good impression of your new staff. A staff that has been there for a while will be valuable to you because they can provide insights on clientele, foot traffic, and nearby competitors.

Transitioning Your New Restaurant

You will also need to create a transition plan for the business. This can include things like renovations, creating a new menu, or replacing old equipment.

5. The Grand Opening

The best time to promote your new restaurant is on the grand-opening day. This is the day where you will receive the most buzz, foot traffic, and awareness. A lot of experienced restaurant owners will give you the advice of extending special offers, promotions, and free food to patrons.

What other day are you going to do this other than the grand opening of your restaurant? This is also a great opportunity to know your neighbours and for them to know you.

About The Business Exchange

Established in 1998, The Business Exchange specializes in lead generation in the franchise and business opportunity industry, in print and online. Please call 1-877-337-1188 to learn more about our Restaurant listings for Sale in great locations and Request a Quote!

The post Buy Restaurants for Sale: An Overview appeared first on Business Exchange Blog.