Fully half of all the businesses that are sold are retail food storefronts. This includes franchise, non-franchise, sandwich shops, bagel shops, coffee shops, as well as good old fashioned sit-down restaurants. Half!
I've done due diligence and investigated countless food-related restaurant businesses for sale for the potential buyers of these businesses. What I have found is a commonality among the ones that are doing poorly they always have very low budgets for advertising.
On the other hand, just because there is a high advertising budget does not automatically mean success but it sure does help.
Here's a true-life example from back when I was a young entrepreneur, starry eyed and fresh faced, looking to make my first million. I was madly in love with a girl who shall remain nameless. I remember this girl very well, even though I haven't seen her in the 36 years since.
I also remember her parents, who I adored. They owned two McDonalds franchises, both located in the south central part of Los Angeles. Not quite Watts, but not Torrance or Manhattan Beach, either. I was told that these two franchises were the most profitable ones in all of Los Angeles County. Back in 1972 a dollar bought you a heck of a lot more, and these two franchises combined were pulling $750,000 net taxable profit. That is equivalent to making 2 million dollars profit in today's world. McDonalds was doing very well for most of its franchises at the time, but why were these two locations doing so remarkably well?
Well, they were a standout because they did everything that a particularly good marketing man suggested, and they did it first class. So, if you are going to own a food place here it is "I am handing you the key to getting very, very rich at it."
First, these parents of hers joined every church in the area, of every denomination. The fact that they were Jewish did not stop them any! Whenever there was a church function, they donated the use of a fountain drink machine. They met with all their customers personally. They went around the locations and talked to each and every customer. They introduced themselves, socialized, and made friends.
Their relationships were so strong that when everyone came to their McDonalds after Sunday church services, the littlest kids would come to the counter and ask for Dave.¯ They felt that Dave¯ was a personal friend of theirs. And so Dave¯ would give them cookies or other goodies.
These savvy business owners donated money, time, drinks (not food), and otherwise gave of themselves to every community activity. They did this for the first location, and then did it again for the second location.
They really knew how to Schmooze.
The secret of a successful fast food restaurant is to keep putting your business name in front of your prospects over and over and over until none of them could even consider going anywhere else.
About The Author: Willard Michlin, CPA offers business buyers Due Diligence Services (Second Opinion, Offer Assistance, Final Due Diligence) when they are thinking of making an offer on a business or in the process of investigating a business purchase. Serving all of Southern California. He can be reached direct at 805-428-2063 for more information and an appointment.
|Helpful Resources To Assist In Selling And Buying California Businesses|
|Peter Siegel, MBA, BizBen Founder, ProBuy, ProSell Programs
Founder & President Of BizBen.com (since 1994). I am the Lead Facilitator for both the ProSell & ProBuy Programs. I consult daily with business buyers, business owner/sellers, brokers/agents daily about buying and selling California small to mid-sized businesses. Call 925-785-3118.
|Rick Carlson, Business Broker - Southern California
You Will Never Feel Lost In The Shuffle. Many Brokers Simply Send Out An NDA And That's The End Of Communication. All Buyers Receive A Personal Meeting With An Ace Acquisition Specialist So They Can Recommend The Perfect Business For You. Phone Rick direct at 800-985-4939.
|Mike Brewer: Liquor License Broker, ABC Consulting Service
Liquor license brokerage and consulting services. We provide: Alcohol License Transfers Application Consulting & Processing, Liquor License Purchases & Sales, City Zoning Permits & Land Use Entitlements, Public Convenience or Necessity Findings and Letters. Phone Mike Brewer direct at 800-437-1100.
|Ryan Clark, Business Broker: Southern California
The Veld Group provides a refreshing approach to Business Brokerage, Mergers & Acquisitions and Business Consulting and Valuations. From Your Street to Wall Street, we cater to Main Street Businesses as well as more complex Strategic Firms and Start-Ups. Phone Ryan, Business Broker at 310-652-8353.
|Steve Zimmerman: Restaurant Broker Specialist, California
Steve founded Restaurant Realty in 1996. He has personally sold/leased over 900 restaurants, bars & clubs, & completed over 3000 valuations. The author of "Restaurant Dealmaker - An Insider's Trade Secrets For Buying a Restaurant, Bar or Club" available on Amazon. Reach Steve direct at 415-945-9701.
|Michael Davidson, Business Broker - Southern California
Los Angeles Business Broker providing M&A quality services for Small Business Owners. We leverage our technology and expertise to Simplify & Expedite the Business Sales Process. Matching the right buyer with the right business is how we define success.
|William Park, Business Broker - Southern California
Highest Volume Broker in California, Simply Check our HUNDREDS of Listings! Over 25 Associates, Speaking Dozen Languages, Helping Buyers and Sellers of Small Business since 1982, Centrally Located between Los Angeles and Orange Counties, while Riverside & San Bernardino Counties are Very Accessible.
|Chris Seaman, Business Broker: Southern California
Founded in 1994, First Choice Business Brokers has accelerated to become one of the most successful Business Sales Organizations in the world. Our team of agents have gone through extensive training to become experts in the field of business brokerage. Call Chris at 858-578-4111 for more info.
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|FREE Sat Seminars: Best Practices When Buying Or Selling A Small Businesses
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