Canada’s restaurant industry is fiercely dynamic and competitive. In 2021 alone, over 95,000 food service and drinking establishments existed across the country. If you’re a restaurateur thinking about listing your business in Ottawa, here is a checklist for selling a restaurant which outlines what you need to consider to get the best deal out of your final sale.
Tips for Selling a Restaurant (Overview)
When preparing to list your restaurant for sale in the Ottawa area, it is crucial to understand what you can do to maximize its value and the factors that go into determining the final selling price. You can:
- Improve your restaurant’s curb appeal.
- Understand the factors that determine the value of your business.
- Find the right commercial real estate agent.
Let’s explore these tips for selling a restaurant in more detail.
Improving Your Restaurant’s Curb Appeal
Improving your restaurant’s curb appeal can add significant value to your final sale price. It is beneficial to:
- Renovate all necessary physical aspects of your restaurant: Fix anything broken, improve your decor, consider repainting, and upgrade worn-down facilities. The less work a buyer needs to put in after purchase, the more your restaurant could be worth.
- Get all your accounts and bookkeeping in order: Potential buyers want to review your property records. Providing at least three years of detailed documentation like tax returns, income statements, expense reports, and food and vendor lists can gain a buyer’s confidence which will make for a smoother and more appealing transition.
- Be transparent about your legalities: Make your inspection records, permits, and licenses available to buyers. Resolve any legal issues that may impact your final sale price during negotiations.
Understanding Your Restaurant’s Value
It is often helpful to start by researching similar restaurants for sale by reputable commercial real estate agents, like our team at Zinati Realty, to get an idea of what your restaurant could be worth. Use filters to search for businesses that are close in location, size, and age. While you can do your own market research and calculations, hiring a commercial broker or appraiser is often the best way to ensure accurate valuation.
There are multiple factors that impact your restaurant’s value:
Profits and Losses
Your profits and losses can indicate the success of your restaurant. Therefore, healthy profits can validate a higher price because it shows buyers the possibility of continued cash flow.
Location and Lease Type
Location and lease type can determine your business’s price. For example, a restaurant in a busy neighbourhood may be worth more because it will likely receive high volumes of customers. Longer leases also improve value.
If your restaurant is older with a strong-standing established client base, this may appeal to potential buyers. On the other hand, if your business started recently, this could impact value positively or negatively, depending on buyer desires. Some buyers may see newness as an investment opportunity, while others may think it’s too risky.
Equipment can also determine valuation. If your sale includes appliances, this will increase your price. On the other hand, if these assets are run down and outdated, this can lower your restaurant’s worth.
Finding the Right Commercial Real Estate Agents
A commercial real estate broker with prior experience selling in the restaurant industry can help you understand your business’s market value and ensure you get the best deal for what it is worth. Research is key to finding a suitable real estate agent. Consider their track record, particularly if they have a history of selling similar restaurants in the same area. It may also help to check for reputable reviews.
At Zinati Realty, our full-service commercial real estate team will help you put your restaurant up for sale in Ottawa. We can discuss the value of your business, find leads on serious buyers, and execute a final sale together. Are you ready to get started? Reach out to us so we can explore the right commercial real estate solutions for you.