You had the burger, fries on the side, and maybe even a shake for dessert — you’re full and ready to get out. Saying goodbye is never easy, but it’s time to sell your fast food restaurant. You’re probably a franchise owner, but it’s possible you own a small brand of your own making.
Either way, if you’re looking to sell, you’re in luck, because the fast food industry is experiencing a boom unlike ever before. Thanks to emerging production technologies and promising consumer trends, the business landscape is hungry for fast food restaurants.
With a promising present and even better future ahead, why sell your fast food business? Well, maybe you’re ready for a new business opportunity. Maybe the selling price is simply too good. Or, maybe, it’s just time to hang up the spatula and move on. Whatever the reason may be, you’re pretty sure it’s time to sell your fast food restaurant — here’s how.
Selling in a trending market
The fast food industry has consistently trended upward for the past decade. Reaching a record high revenue of $256 billion in 2019, the fast food industry (or known as quick service restaurant industry to insiders) is showing no signs of slowing down.
This is no fluke — the fast food industry tends to show growth during periods of economic expansion and yet is rarely affected by downturns. According to The Motley Fool, fast food rarely takes a hit during recessions, and most consumers cut out full-service restaurants before giving up fast food.
This, paired with whatever customer loyalty your particular brand has cultivated, means selling a fast food business is a pretty safe bet. You know better than most that this industry experiences regular income, and regular income means you will see plenty of suitors to buy your business. Fast food isn’t a buyer’s market or a seller’s market — it’s a rare win/win in which each party stands to make good money.
You’ve put your blood, sweat, and tears into this business, and that’s worth more than just the price of the fryers. Depending on your franchise, you might be required to invite in a franchise-approved evaluator to assess the property and assets. But, if you operate independently, or think it’s wise to establish your own second opinion, consider these top business valuation factors:
Technology : Align your business with emerging technologies, and be sure to highlight the lasting business case for any practical trends you’re currently implementing. This is a way of making your business future-proof — you stand to increase your selling price, and rise above the competition when your fast food restaurant is framed as cutting edge. Industry trends you might want to highlight include meat alternatives, AI, food delivery, and more. No one wants to buy a stagnant business, so be sure to highlight all the ways your business is ahead of the curve.
- Taxes : You knew this was coming, because of course taxes will play a significant role in your business sale. No sale is all profit — not only will you need to potentially share some of the sale with your team, but you can guarantee a good chunk will go to Uncle Sam. Be sure to take these expenses into account when developing your asking price.
- Brand : When it comes to fast food, brand is everything. As customers drive down the road looking for a quick bite to eat, they will rely on brand reputation above all else. So, whether you operate a franchise with iron-clad brad recognition, or your local restaurant is supported by a loyal customer base, brand health may be the most valuable asset you can offer a potential buyer.
As someone accustomed to the business landscape, you’re likely cooking up all kinds of deals already. Put those ideas on simmer for now — the number one mistake aspiring sellers make is being overzealous. Take a beat, follow the tips outlined in this guide, and, above all else, surround yourself with the right people.
You own a fast food restaurant, but that doesn’t mean you’re an expert in tax law. Focus your sales efforts where you can affect the greatest control and where you add the most value to negotiations. Leave marketing, legal, real estate, etc. to the sales experts you can recruit.