To say there is a lot of paperwork involved in purchasing a restaurant, bar, or club would be an understatement. Jim Pate and his team have reviewed hundreds of these types of contracts, leases and permits, and this kind of experience is invaluable. A good broker will review all these documents, answer questions, and point out anything that could be a disadvantage to the buyer.
To sell your restaurant fast you must have all your ducks in a row
- Navigating Contracts
When you’re buying a business, you will be provided with documents including:
- The purchase contracts
- Premises lease
- Equipment leases (if applicable)
- Equipment rental agreements
- Franchise agreements
- Various other contracts
It is easy to overlook certain details in these contracts even if you are an experienced restaurant, bar, or club buyer. It is always beneficial to have an expert review these documents with you.
It’s important to know that one of the most important aspects of the sale is the premises lease. We will work closely with the buyer and landlord in negotiating either an assignment of the existing lease, a modification of the existing lease, or a new lease.
- Dealing with Licenses and Permits
It is very beneficial to have an experienced restaurant broker review all the licenses and permit needed to operate the business. These permits include:
- Food permit
- Alcohol license
- Entertainment license
- Fictitious business name license (so buyer retains exclusive use)
- Fire department permit
- Business license (required by local government)
- Health license
- Employment development department permit (for payroll)
Not having all these leases in good order can disrupt the purchase process or leave you with an inoperable business.
- Transferring Contracts and Licenses
It is critical step in the buying process that all license and contracts are transferred to the new owner of the business. A good restaurant broker will assure this is done before the close of escrow.
- Assignment of the Premise Lease
There are several instances in the buying process where leases will be involved. With the guidance of a restaurant broker, you can be confident all the appropriate parties have signed correctly, such as sellers and buyers, landlords and equipment lessors.
- Handling Franchise Agreements
Are you interesting in purchasing a franchise? In this situation, there are several agreements that must be reviewed and signed by the buyer, seller, and franchisor. The permit must be registered with the state to pay sales tax and file monthly sales tax returns. Jim Pate and his team have experience in reviewing these types of documents and help you understand the various aspects of being a franchise owner.
- Navigating Alcohol Beverage Control and Entertainment Licenses
Many buyers would not want to close escrow on a new restaurant, bar or club only to discover they cannot sell alcohol because the license to do so was not transferred from the seller. This is also true of any business that wishes to take over an entertainment license. Without the approval of the proper authorities before the close of escrow, you could be stopped from selling alcoholic beverages. Jim Pate and his team can help circumvent these kinds of problems that could have a serious impact on your business.
- Dealing with Conditional-use Permit
The right to use the premises for something not typically allowed for the property per the local zoning laws requires a conditional use permit. If it is determined that this permit is needed, you could run into issues. An experienced restaurant broker will help the buyer navigate this process to ensure there is no disruption in business.
- Keeping Track of Saleable Inventory
Saleable inventory includes food and alcohol products, cleaning supplies, etc. that you will have on hand when escrow closes. We will help you negotiate what inventory you wish to purchase and what a reasonable cost should be. We will oversee the inventory of saleable products which will be paid for at the close of escrow.
When purchasing a restaurant, bar or club the benefits of working with a restaurant broker are immeasurable. The buying process for these types of businesses are often rife with costly pitfalls and setbacks, especially for inexperienced buyers.
While the process of buying a restaurant, bar or club can be lengthy, it does not have to include headaches due to misunderstandings about the documentation, permits and contracts involved. Smart buyers realize the benefits of working with an experienced restaurant broker like Jim Pate, CBB