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Buying A Pizza Restaurant For Sale Tips: What You Need To Know


Buying A Pizza Restaurant For Sale Tips

Who doesn't love a good pizza right?  It's a low cost food that appeals to all ages and genders. Buying an established pizza restaurant is a great way to avoid startup costs and buying an independent pizza restaurant is a great way to avoid franchise fees.   According to IBISWorld.com, pizza restaurants were projected to generate nearly $43 billion in revenue in 2012 and independent pizzerias control almost 52% of those sales.   So, when you see a pizza restaurant for sale, give it some consideration because there is definitely money to be made.  If you are already considering it here is what you need to know.

As the owner, you most likely be spending a lot of time at the business. I've seen pizzeria owner's put in 60-70 hour work weeks so you may want to find an established pizza restaurant that is for sale close to your own home.  Pizzerias are most successful when the owner is onsite and a part of the day to day operation.  Like many other businesses, there is potential for employee theft given the high volume of cash going in and out of most established pizza restaurants.  Labor costs in this business should be below 20 percent, not including the manager's salary, but be careful not to cut this too short. You want to be adequately staffed and have the right team in place to provide good customer service.

Next, and this may sound ridiculous but make sure the pizza is good at the restaurant you are considering!  If the pizza isn't that great, you may not be buying into a loyal customer base.  If that's the case, you will have to change the pizza recipe, perfect it and re-introduce it to the market.  You would basically be building the business from the ground up like you would a startup.  This will most likely increase your marketing and advertising costs significantly too, so be sure the pizza restaurant is already producing a quality product.

The most common places for an established pizza restaurant are either in a stand-alone building, a strip mall or a shopping center.  Almost 48% are found in standalone buildings so unless you are specifically seeking out a shopping center/strip mall location, you will likely find an established business in its own facility.  Regardless of where it is located, consider the rent or lease agreement.  Rent and utilities should be less than 9% of your total costs.  Also, consider the competition that is within a 10 mile radius.  Obviously the fewer competitors the better, then when your customers need to grab something quick on their way home from work, they will have less options to choose from and hopefully end up at your counter!

Next you want to look their financials.  Dig into their records and get a handle on their expenses, revenue, profit, and debt. Have an accountant take a look, as well, so you have an accurate range of expected revenue. In looking at the company's inventory, check to make sure they are keeping food costs below 30 percent.  Taking benchmarks like this into consideration will help you to be sure that you buying into an efficiently run business.  You may also want to have your professional team, such as your attorney or accountant, take a look at everything you find as they may be able to provide additional insight as to what you would actually be getting should you purchase this pizza restaurant.

So if you have a love for pizza, don't mind long hours and have found an efficiently run established pizza business for sale, you have the potential to generate some good revenue.  Despite our sluggish economy, the pizza industry is expected to grow as new variations of pizza are being introduced into the market regularly, which ultimately expands your potential customer base.

View all: California Pizza Restaurants For Sale

Need Help?: Pizza Restaurant Business Brokers & Agents To Assist You

Categories: BizBen Blog Contributor, Buying A Business, How To Buy A Business

Contributor:

Peter Siegel, MBA
Areas Served: All Of California
Phone:  925-785-3118 Cell, 925-785-3118 Text
Founder & President Of BizBen.com (since 1994) & BizBenNetwork.com. I am the Lead Facilitator for the ProSell & ProBuy Programs on both websites. I consult daily with buyers, sellers, and intermediaries daily about buying and selling businesses. Call 925-785-3118.

Comments Regarding This Blog Post


My advice to new owners is not to skimp on the quality of ingredients. I have had clients who have taken over and in an attempt to lower food costs have started buying less expensive cheeses and meat toppings, and although the customer cannot say exactly why it tastes different, it does, and so they stop and buy somewhere else. Door hangers for marketing work great with pizza shops, some of my clients have had great success by putting them on doors of nearby apartment complexes, and get calls because it is the first thing people see when they get home, and don't feel like cooking, so they order a pizza.






  Helpful Resources To Assist In Selling And Buying California Businesses
Harry Sidhu, CBB, Broker: SF Bay Area, Central Valley, SAC Region

Assisting both sellers and buyers of businesses - dealing mainly with Liquor Stores, Grocery Markets, Gas Stations, Smoke Shops, Restaurant Related, Retail Related, Service Related. Serving SF Bay Area, North Bay, Sacramento area. Call Harry Sidhu, CBB for assistance at 510-366-6130.

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.

Willard Michlin, CPA, Certified Fraud Examiner, Due Diligence

Willard Michlin, CPA #106752, offers buyers step by step training & assistance in doing Due Diligence Services when they are thinking of making an offer, or are in process of investigating a business purchase. He helps to determine the actual net profit even when there is cash. Call 805-428-2063.

Helen Yoo, New Century Escrow - Escrow Services In Southern California

New Century Escrow, Inc. is a fully licensed & bonded independent escrow company. Over 20 years combined experience in handling bulk escrow transactions. Multi-lingual staff that speaks your language, including Korean, Chinese, Vietnamese. Call Helen Yoo direct at 626-890-1151.

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.

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.

Timothy Cunha JD, Business Broker: SF Bay Area

SF Bay Area experienced attorney, & business broker. I & my EvergreenGold team offer owners sound advice & expertise to build business value & achieve profitable sales. Call today for a FREE business evaluation & SWOT analysis for your business. Call me direct at 650-600-3751, 650-866-5393 Text.

Manjit Singh, Business Broker - SF Bay Area, Central Valley

Assistance in the SF Bay Area & Valley. Contact me about buying or selling a restaurant, liquor store, gas stations, markets, and c-store businesses. If you are looking to buy or sell a SF Bay Area, Central Valley liquor store, market, c-store, restaurant, etc phone me direct at 510-417-9429 Cell.


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