We do things differently than others…
Many times each week we are asked to value an existing business and many times these are existing Franchise Business’. Sellers always want more money than the business is worth because they have an unrealistic idea of value.
Business opportunities as well as Franchise Opportunities are normally sold on net profits as it relates to a Return on Investment (ROI).
But the concept of value is not always based on profits. We recently sold an under producing restaurant perched on the water in a very popular location in Southern California.
The restaurant was operating for four years and wasn’t making any money despite sales in excess of $2 million dollars.
Is there value in this business opportunity?
Many people would look at just the financial statement and scoff. Many did.
Though this was not a franchise for sale, the buyer activity was ferocious and we had competing offers to buy. Eventually we took an offer above Listing Price.
Why would a buyer purchase such a business?
The reason is the cost to open such a restaurant concept was triple what it sold for. We were able to renegotiate a more favorable lease for the new buyer and we closed escrow within 60 days.
In business transactions, it pays to think outside the box. It pays to have experienced people on your side who can see opportunities and pitfalls long before they arrive.