Emerald Business Systems Blog

How Buying A Restaurant Is Like Coyote Ugly

Posted in Bars and Taverns,Restaurant by ebs4pos on September 11, 2009

Don’t you hate it when you go to the movies, and the advertising for the film is completely different than the film itself? That happened to me with Coyote Ugly, and I still claim my wife tricked me into seeing that with her! In my opinion, the list of these types of movies is long and not-so-distinguished, including Battlefield Earth, Waterworld, and Signs. The problem is that even with a list of movies this short, people will still disagree with me. That’s the point of this article. Some restaurants look like good buys when they are not, and yet, some restaurant acquisitions are good for some people and bad for others.

Why Does This Happen: Missed Expectations

The reason for the phenomenon described above is that many people know how to make something look good to everyone. There are marketing books galore out there for every type of industry and asset. After all, most of us are now conditioned to know that those pictures on the vacation travel sites are ALWAYS better than they are in person. However, when dollar signs are involved (as in, I can make SO MUCH money if I buy this restaurant), people often don’t want to know the downside.

Not All Distressed Assets Are For Everyone

The other side of the coin is that some restaurant acquisitions are better for certain people, and not good for others. After all, some people (like my wife) really liked Coyote Ugly. There was a love story, it was romantic, and she (unlike me) knew what the movie was really about before we went to see it.

With this in mind, it is vitally important that you decide what you want out of a restaurant before you even start investigating it. Do you want to own and run it? Does it fit within other restaurant schemes that already own? These are just examples, but you should decide up front. Then, let experts, like brokers, lawyers, and accountants, actually perform the due diligence, and listen to those experts. Take a step back, once the due diligence is performed, and re-analyze how good the deal really is. Oh, and of course, this applies to movies chosen by your wife as well. . . .

via How Buying A Restaurant Is Like Coyote Ugly.


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