Buy – Sell Between Franchisees


Buying or Selling a Restaurant?

Buying or Selling a Restaurant? Buy Sell Between Franchisees
Need help negotiating the deal to buy another franchise?

Jeff Garcia CPA Can Help. From time to time most restaurant owners have the desire to sell their restaurant. All business owners do actually and restaurant owners are no different. For some owners the desire is fleeting, for others the feeling is strong enough to act on. If the feeling gets strong enough, Jeff Garcia, CPA can help restaurant owners navigate the sometimes murky waters of selling a restaurant.

An owner of any type of restaurant will face pitfalls along the pathway to selling their restaurant. The restaurant valuation, the accuracy of the owner’s restaurant accounting, reliability of the potential buyer’s restaurant accounting as well as legal and contractual issues are all areas where mistakes have the potential to cost a restaurant owner considerably. An owner of a franchise restaurant may face even more pitfalls with their franchise contract.

The franchise contract between the restaurant owner and the franchisor is typically fraught with covenants and restrictions covering to whom an owner can and cannot sell their franchise. Before finding a buyer it is very important for an owner of a franchise restaurant to understand the terminology and ramifications of the terms of their franchise contract.

One very typical but often overlooked requirement of most franchise contracts is the requirement that the new owner be approved by the franchisor lest the franchise be revoked automatically. A mistake over this term could cost an owner significantly, depending upon how much value the franchise itself adds to the restaurant valuation. A mistake with this even has the potential to completely kill the deal.

If one franchise owner is selling to another franchise owner it is very important to make certain restrictive covenants such as non-compete clauses or territorial exclusivity clauses do not legally impede the sale. Typically a franchisor will be willing to re-write such clauses if the new owner is in good standing but it is important to be careful to avoid challenges by other franchise owners in the area.

Problems may also arise when one franchise owner wants to sell to another franchise holder with regard to the restaurant valuation. It is very important to agree to use an independent third party valuation firm that both parties agree is fair and unbiased.

The professionals at Jeff Garcia, CPA are all very knowledgeable and experienced in selling restaurants both independent and franchised. They are prepared to provide expert advice, unbiased restaurant valuations, excellent restaurant accounting services and superior customer service.

If you have a restaurant accounting question or would like more information on “Buying and Selling a Restaurant” please Contact Us Online or  Call Us Toll Free at (888) 933-food(3663) or (713) 621-1142.