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Good Management Beats A Good Location When Buying A Restaurant

Contributed by Jeff Back

People who know me know my opinion about what it takes to be successful in the restaurant business- and it’s not just a good location. What makes a difference time and time again is the difference in management. Good management is the key to success. Every time you hear its Location Location Location, I say it’s Execution Execution Execution! Look over my list of “done deals” over the past 23 years and you will notice that many are no longer in business. Some have been sold as many as four times. But eventually, with good management, the same location that was once a loser has been turned into a winner by good management.

Nowhere is this truer than with the Charley Brown’s chain. These restaurants flourished for many years but are now all gone in the Bay area. There are many reasons for their demise, but location is not one of them. Their locations were always terrific and are still terrific even though Charley Brown’s is no longer in business in the Bay area.

The best location is the right location. You have to take into account the characteristics of the concept and match them up to the characteristics of the location. Different concepts have different location needs and different affordability. When I’m trying to help someone find a site, buy a restaurant for sale, or sell their restaurant, I try to use all of my experience in the restaurant business so that the right decisions are made. The same location can be absolutely perfect for one concept and absolutely wrong for another concept.

I have had many of my clients for 10 to 15 years or more. These long term relationships mean a lot to me and I am rewarded with a good deal of inside information that I can use to help them and others make the right real estate decisions.

The restaurant business is difficult to say the least. But it is an exciting business, and an ever changing business. And, it can be a very profitable business.

About The Author: Jeff Back is the founder of J. Back & Associates Restaurant Real Estate. - specializing exclusively in buying , selling and developing restaurants, bars and nightclubs. View more information about Jeff Back at J. Back & Associates & his listings or phone him direct at 925-736-8200 about selling or buying a restaurant in Northern California.

Posted on April 27, 2011 | Email This Blog Post | Print This Blog Post | All Contributions From Jeff Back

Categories: BizBen Blog Contributor, Business Broker Issues, Buying A Business

Comments:

Management and location go hand in hand. But when it comes to chef-driven restaurants, then management is a great deal because the chef sells itself...people follow the chef. Management's job is to keep customers coming back for more!

Posted by: A Cecille, Small Business Loans

Thanks for reading the article I wrote. I think Laurence is right, If the seller says "a monkey could run it", don't believe it! A great location is a wonderful thing. It will make your life easier and it is what everyone looks for. But it will not guarantee success. You have a car and a driver. The car is the location and the driver is the management. A Ferrari in the hands of a monkey will get you a smashed Ferrari. As for what is good management- it's everything Lyla mentioned. But in the end it is really HARD WORK, a LOVE OF PEOPLE, AND A PASSION FOR THE BUSINESS. The rest is common sense. Read my article on Restaurants have karma.

Jeff Back at J. Back & Associates Restaurant Real Estate

Posted by: Jeff Back, J. Back & Associates Restaurant Real Estate

Good location more important for fast food than sit down restaurant. But even a fast food business in a good location might not make it if the owner or manager doesn't know how to run the business to keep customers coming back.

Posted by: Mr. Shin

I think it's all those things. There are some little details I know from having worked in restaurants. Whether the place looks clean. If the menu boards are fun to look at. There are many, many things that go into getting people to come in a place to eat and to get them to come back. Good food and fair prices are critical. But not everything. Friendly wait staff is important.

Posted by: Tesse McBride

Not really true. A bad manager can take a place in a good location and ruin it if he doesn't know how to appeal to customers. If they're turned off, they'll go down the street or to the next block. That seller is wrong if he says a monkey could be successful.

Posted by: Lawrence Ing

This is a great way to think about buying a restaurant instead of just looking at the numbers or other items buyers may just consider.

Posted by: John Mason, Restaurant Consulting Co.

I'd like to know specifics about what you mean by "good management." Is it important to know how to cook in restaurants? How to hire good people? How to watch costs? Is a good manager a person who is good at advertising the business? I looked at some restaurants to buy. I'm not sure. I don't know what's really important to succeed because everyone tells something different. One was near the U.C. campus. The owner said the location is so good that a Monkey could be successful there. Are you saying that isn't true?

Posted by: Lyla L.