The seller had several restaurants and was ready to sell one of them. Murphy Business was contacted to package and sell the restaurant.
By leveraging our extensive database, we were able to find a commercial real estate agent that had a client looking for a second location for his restaurant concept.
The Offer and Due Diligence
The buyer and seller met and shortly afterwards a full price offer was accepted.
As the buyer did the inspections and met with the landlord, they found a few issues with the property and they also discovered that the rent that was disclosed was NOT the actual rent. The property taxes had drastically increased a year ago and the seller did not update the information with the new rent information. Also, the location where the restaurant was used to have a tax discount that had recently expired.
The buyer calculated that the additional rent and loss of the tax discount would cost him over $35k in the next 5 years. After much negotiations, the seller and buyer agreed to reduce the offer by 33%.
Before deciding to sell your business, review any advantages that a buyer could have. Confirm these benefits are still active.
When the business is listed for sale, make sure to carefully review all the information you provide to the broker to make sure the buyer has not surprises. When a buyer has a surprise, he will inevitably reduce the price. A broker can only provide the information a seller has provided. Make sure it is accurate!