I'M PARALYZED AND I CAN’T GET UP - I JUST BOUGHT THIS RESTAURANT
The restaurant brokerage business is a bizarre business with unbelievable stories. Deals take more twists and turns than Lombard Street in San Francisco, never knowing how the deals are going to finish, never knowing what direction its going to take because the personalities and characters involved are so dynamic.
I'm starting a series of short stories about our strangest deals in hopes of entertaining you as well as educating you. The names will be changed as well as the cities to protect our clients and the customers who buy and sell these restaurants.
BROKERAGE AXIOM: Whatever can go wrong will go wrong!
I'M PARALYZED AND I CAN’T GET UP
This restaurant sets on the corner of a small college town in a building that has to be 100 years old. Its two-story brick finish gives it a classy look and is a centerpiece of the town.
The restaurant has operated for at least 15 years, very successfully I might add. It makes a consistent $210,000 a year, a perfect SBA loan candidate.
We price is over $500,000 and in a couple months we find a buyer.
So we go through the loan process. The buyer is determined to do it his way and who am I to tell him otherwise. He’s an experienced restaurant owner, he ought to know what to do, right! Well as it turns out, he’s a bit directionally impaired, meaning he doesn’t follow direction very well. SBA loans are all about following directions.
Because of this issue, it took six weeks extra to get the bank to fund the loan, which is when escrow can order the liquor board to transfer the license.
The escrow gets funded by the bank. We’re ready to close! Wait a minute! Hold your horses. The buyer is suddenly paralyzed. WHAT! He’s in the hospital, they don’t know what’s wrong with him. He gets sent to a big city hospital. They do emergency brain surgery, something the merging of blood vessels. And all this three days after the loan was funded.
The banker calls me and asks me what now? I had to laugh and say "What, you think I see these kinds of things happen all the time! I have no idea." The loan was done, there was no turning back, only slowing-down, but the buyer has to make his first payment in 30 days.
More than three weeks later the buyer recovers and we close the deal. All is saved!
Mel Jones is one of the premier restaurant brokers in the nation having published hundreds of articles on buying and selling a restaurant and bar business, selling thousands of restaurants in CA., WA and AZ and building one of the most copied business models in the brokerage industry. Mel started SellingRestaurants in 2004 with the one simple concept, give the buyers the information they need to make intelligent buying decisions without being pestered by a broker or hiding information, prepare the business for market by researching key details that make or break deals and educate the buyer on the buying process to create an intelligent buyer. Prior to SellingRestaurants, Mel was a Chief Financial Officer for Universal Music Group, the largest music company in the world. There he participated in more than $11.5 billion of merger and acquisition transactions. He also work for top companies such as Nestle Foods, USA. He hold a Bachelors in Business Administration Finance as well as attended Law School at Gonzaga University. Give Mel a call at 480.274.7000.