What Are The Pros and Cons Of Buying A Restaurant In An Industrial Park?

Comments & Replies: 2     Views: 9315     Posted By: Joe Ranieri  Joe Ranieri, Business Broker: LA, Orange Counties

Are restaurants (deli's, sandwich shops, food services) in Industrial Parks good investments for business buyers? I get this question many times a year from potential restaurant buyers so I though I would answer this with my thoughts and get feedback from other Advisors & Professionals on BizBen.

Topics: Buying A Business     Tags: buying a business



What Are The Pros and Cons Of Buying A Restaurant In An Industrial Park?

PROS

Hours:

Typically, these businesses are only open Monday thru Friday from 6:30am-3pm, but it's important to remember that the owner will be spending their time doing payroll, going to the restaurant supply store, etc. The shorter hours do allow the business owner to have a life and spend time with family on the weekends.

Catering Opportunities:

Since the business is closed on the weekends, many owners either use or rent out the kitchen on the weekends for catering purposes. This allows the owner to make additional income. I have seen businesses lower their food cost by using food from the restaurant and putting it into the dishes of the catering business.

Easy to Prepare Menu:

Many of the customers who frequent these types of places only have a limited amount of time, because they are on their break or lunch from work, so the menu can't be too complicated. The best menu is deli or casual Mexican food, and always have items near the register for impulse items that can be eaten on the way back to the office.


CONS

Captive Audience:

Usually these types of businesses do not allow themselves to general foot traffic from the public, and so the customers are only those who work in the neighboring area. It s important to remember these customers need to really be appreciated, and so when the business is open, the owner needs to be onsite. I have seen new buyers lose long term customers, because they didn't have any customer service skills. It s important to remember that if the economy tightens and more people in the area start "brown bagging" their lunch, then that will lower monthly gross sales.

Price:

A profitable five day a week business with short hours can fetch a higher price on the market, because it allows the owner to run a business, but also have a life. A high price is obviously good for the seller, not as good for the buyer, but eventually all buyers become sellers, so they can get their investment back.

Lease:

Typically, the landlord for industrial parks are run by large management companies, and so the buyer needs to have good credit/assets to be approved, it's important to note that these companies are less flexible than small individual landlords.

I'd be curious to hear from other BizBen Users, Advisors, And Intermediaries who have had experience selling these types of businesses - thank you.

Contributor: Business Broker: Southern California

All good comments to which I would add the following:

Pros:

In general, industrial park lease rates are less than retail shopping centers. In addition to shorter hours, also most are not open during major holidays.

Cons:

You live and die by the businesses in your area. Investigate the major tenants in the area, make sure they are financially stable and not likely to relocate. And if you are locating in the middle of an industrial with a major corporation, check out what food service options the company provides, their pricing, etc. There is a trend for companies to compete for top tier employees to offer unique food service offerings sometimes at a reduced price or even free. Its not uncommon for a large corporation to try to do everything they can to keep their employees onsite for lunch to enhance productivity.


  Helpful Resources To Assist In Selling And Buying California Businesses
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.

Steve Zimmerman: Restaurant Broker Specialist, California

Steve founded Restaurant Realty in 1996. He has personally sold/leased over 1000 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.

Peter Siegel MBA, BizBen Founder, ProBuy, ProSell, ProIntermediary Programs

Founder Of BizBen.com (since 1994). I am the Lead Advisor for the ProSell, ProBuy, & ProIntermediary Programs. I consult daily with buyers, sellers, and brokers 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.

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.

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.

Joe Ranieri, Business Broker: Orange, LA County Areas

Having owned retail/restaurant businesses for over 20 years, my interest turned to selling businesses rather than owning them. I specialize in LA & Orange County restaurants, fast food independents and chains, bars, & liquor stores. Call 714-292-5448 Cell/Text.

Peter Siegel, MBA: Business Purchase Financing Solutions

Niche business purchase financing advisory and loan placement services with SBA and Non-SBA Financing, Retirement Fund Rollover Solutions, Combo Financing Packages. To get professionally pre-qualified or more information on the ProBuy/ProSell Programs: 925-785-3118.


  Related Articles, Events, Blog Posts, Discussions, Videos, Interviews
Selling Buying Used Restaurant Equipment-Tips For Restaurant Buyers, Sellers

The restaurant business is a tough business to be in, no one can dispute that, and so it's imperative that an owner's equipment is in good working condition. A new owner should make sure that the restaurant's equipment is in good working order before they close escrow. Joe Ranieri gives his tips.

Upgrading Liquor License: An Increase In Price When I Sell My Restaurant?

My restaurant recently upgraded its beer with wine license to a full-service liquor license, and if I sell, how much can that increase my selling price? Joe Ranieri, Southern California restaurant broker specialist initiates this discussion and other advisors, business brokers, agents weigh in.

Buying A Restaurant With Financing: 5 Options For Restaurant Business Buyers

In this Discussion, Peter Siegel MBA (Business Purchase Financing Advisor at 925-785-3118) discusses financing of purchasing a small to mid-sized restaurant business (with or without real estate). When it comes to financing a restaurant, potential restaurant buyers have many options to choose from.

What Are The Pros and Cons Of Buying A Restaurant In An Industrial Park?

Are restaurants (deli's, sandwich shops, snack shops, food services) in Industrial Parks good investments for business buyers? Joe Ranieri (Orange County Restaurant Broker) at 714-292-5448 takes a looks at the Pros and Cons of buying a restaurant in an industrial park on this BizBen Discussion post.

How Long Does It Take For A Small Business Restaurant To Sell In California?

This question is bound to come up from a seller to a business broker at one point in their relationship. The truth may discourage a seller who desperately needs to sell, because in all honestly, many times in can take months. All restaurants are different - Joe Ranieri, Business Broker explains.

Tips For Restaurant Buyers: How To Change A Restaurant Concept Successfully

Joe Ranieri, (Orange County Business Broker) discusses how to convert restaurants: buy an existing inexpensive restaurant and then converting it to another concept. He discusses finding the right location, working with the landlord, notifying existing clients, and observing restaurant trends.

Millennial Buyers: What Are They Seeking When Buying A Small Business?

First, we must define, who are the Millennials? The exact years are up for debate, but Millennials were born during approximately between 1981-1986, which today would be between 22 and 37 years of age. Joe Ranieri looks at what these buyers are looking for and what qualities they seek in businesses.

What Are Some Tips In Ensuring A Smooth Transition When Buying A Business?

Changing hands of ownership can seem both exciting & daunting to all parties involved, but it's important that a smooth transition occurs to maintain or achieve success of the business. Joe Ranieri (Orange And LA County Business Broker - Restaurant Specialist) shares some tips with business buyers.


Joe Ranieri Orange County Business Broker
Veld Group Business Brokerage Los Angeles County
Escrow Town And Country Southern California
Bill Ziprick Legal Advise
Facebook
Twitter
Linkedin
Vlogs and Podcasts
Instant Email Alerts On BizBen
BizBen Blogs And Articles
California Educational Events Buying And Selling Businesses
New Postings Reports On BizBen Sign Up
Business For Sale California Stats


BizBen - Where California Deals Get Done! 888-212-4747
7172 Regional Street #364 · Dublin, CA. 94568
BizBen · Copyright © 1994 - 2020, All Rights Reserved



Clost Login


Please confirm your registration by clicking the link we've sent to .

If you can't see it, please check your junk mail folder.

If you have any problems registering, or need assistance with your new BizBen User Account please phone BizBen Customer Support at 888-212-4747.



First Name:*
Last Name:*
Email Address:*
Confirm Email:*
Create Password:*
Confirm Password:*
Phone:
(   
 


You Are A:
Individual
 
Intermediary
 

Email Address:
Password:
 

500 New & Refreshed Detailed Postings Daily
Over 2500 Resources Available On BizBen
Since 1994. Where California Deals Get Done!
Buying A New Restaurant: 6 Items New Restaurant Business Owners Overspen...
Read More News
Buying A Coffee Cart Kiosk Business: All Items Smart Buyers Should Consi...
Read More News