Who Buys a Restaurant or Bar
- Another operator adding a locationWants a proven concept and a lease already in place.
- Chef or manager turned ownerKnows the work and needs a business that does not depend on the seller behind the line.
- Hospitality groupLooks for steady earnings it can fold into a bigger set of restaurants.
What the Buyer Is Paying For
Buyers value a restaurant on the cash left after one working owner is paid, then apply a multiple. Most Main Street businesses sell for about two to three times that cash flow.
A packed dining room does not prove profit. Food cost, labor and rent decide what is left, and on Oahu all three run high, so buyers read the monthly statements closely.
Cash Counts Only When It Is Recorded
Income that never reached the books is not part of the price. Hiding cash to save twenty percent in taxes can cost two or three times that amount in lost sale value.
Lenders also want sales shown in the tax returns, since a bank cannot finance money it cannot find.
The Lease and the Liquor License
A restaurant sale usually needs two outside approvals. The landlord has to accept the buyer, and a bar needs the Honolulu Liquor Commission to act on the license transfer before the buyer can pour.
The license can take longer than the rest of the deal, so begin early. Our guide on the liquor license transfer explains the steps.
How a Deal Is Built
Most restaurant sales are asset deals. The buyer takes the equipment, name, recipes and lease, and the seller usually keeps cash and pays off debts at closing.
Expect a request for a few weeks of training. Offer less than the buyer asks and trade extra time for price if needed.
Getting Ready
Reconcile your books, update the equipment list and make sure staff can run a shift without you. Read about landlord consent and broker fees, then ask what your business is worth.