Selling Your Restaurant: The Significance of Pricing Strategy

Deciding to sell your restaurant can be stressful under the best of market conditions. Add the layer of complications with COVID 19, and some may feel the task is impossible. We want to assure you that this is not the case. The province designates real estate services as essential, and while the market has cooled, there are still buyers active at this time.

Many factors go into defining an appropriate pricing strategy for the sale of your restaurant. Things like:

• Lease terms
• Profit and Loss of the Restaurant
• Location, patio space
• Leasehold Improvements
• Size and number of seats allowed
• Liquor License
• Cost and depreciation of the equipment

For restaurant owners looking to sell their business in the short to medium term, it is essential to critically reflect on the price your sales professional proposes to you. The market ultimately dictates what a business is worth, and if the list price your agent suggests sounds too good to be true – it probably is. To motivate you to sign a listing agreement, some agents will promise the moon & sun, knowing that as time moves on and your circumstances become more pressing, they will get you down to a more realistic price. If you hear a price that is much higher than you anticipated, we encourage you to ask why and have the agent demonstrate how they intend to justify that price to prospective buyers.

Need Help Valuing a Restaurant? Trust the CHI Team

Are you looking for an estimate of market value for your restaurant? The CHI Real Estate team is known for their expertise in structuring commercial real estate deals for restaurants.

We can help you estimate the market value of a restaurant, determine the value of intangible items like a restaurant’s lease, location, customer base, and much more. In this video, Mark Parmegiani helps to dispel some of the common misconceptions in the sale of a restaurant.