Statistically they say that most businesses fail before their 5th year. Very few business last 10 years. We must be an anomaly.
In 1980 I built a 600 seat restaurant on Cape Cod. It was such a success that I built two more. After 10 years I had had enough. Time to sell! However, at that time there were no ‘restaurant brokers’. There were ‘commercial real estate brokers’ but this was not just a piece of property…it was a successful, big restaurant/nightclub. The value transcended the property value…the real value was in the goodwill, the cash flow, the throngs of people that went through the door each week.
The value of being a ‘restaurant specialist’ is understanding the ‘numbers’, in appreciating the profitability, and in creating the blue sky for a buyer. Back then, traditional commercial brokers just didn’t understand. Subsequently I sold it myself.
One day while driving, something I remembered hearing in grad school occurred to me, “to be a success, find a need and fill it.” Like a ton of bricks, it hit me. What the industry need was a ‘restaurant specialist’…someone who understood and could explain financial statements to buyers, someone who understood the operation of a restaurant business, someone who had started from scratch and developed a successful chain of restaurants.
That’s when New England Restaurant Brokers (NERB) was born.
Over the years NERB grew into the largest restaurant brokerage company in the country selling every form of food and beverage business from the Hilltop, at the time being the highest grossing independent restaurant in the country, to the local mom & pop pizza shops. Even though the numbers are totally opposite, the mechanics are the same:
-understand what you’re selling
-determine the true value
-evaluate the market value
-create a presentation that will entice a buyer to buy
-structure a deal that is a win-win for both parties.
As any real estate professional knows, we don’t sell anything, we simply help people solve a problem or help them grow. Restaurant businesses tend to be one of the most difficult products to sell if you don’t fully understand what you’re selling. Conversely, to help a buyer expand, you need to understand just how his criteria translates into a site selection.
NERB and the National Restaurant Exchange have the standard for restaurant brokerage.
Dennis Serpone is president of New England Restaurant Brokers and The National Restaurant Exchange, Wakefield, Mass.