We acquire small restaurants ($500k-$2M in gross revenues) who are sustaining even through the pandemic and further improve their profitability. We will conduct offer/acceptance, due diligence, acquisition, and operations. Funds will be used in combination with seller financing and vendor lending.
We are seeing huge opportunities for acquisition in the restaurant industry right now as restaurants that previously sold for 3x-5x EBITDA (2019) are now selling for 0.5x-2x EBITDA (2020-2021). The restaurants we are targeting are sustaining and profitable even during the pandemic often due to smaller dining room sizes or carry out/takeout positioning leading to lower lease/rent costs. Other restaurants we have noticed are grossing $1MM+, but due to mismanagement are not profiting enough in their bottom line. We know how to free up anywhere from $80k-$200k in profit in those cases by lowering either food or labor costs or through the elimination of credit card processing fees and/or high-cost delivery services (these provide a much larger ROI).
Our goal is to acquire in today's market and further improve profitability. There will of course be opportunities for long-term holdings for the right assets. Silent partners can choose debt or equity, with preferential treatment.
Any Other Industries?
In addition to restaurants, we are open to acquiring small businesses in other sectors that have proven profitable models such as auto repair shops, transportation companies (tow truck, trucking, etc.), and small manufacturing companies. There are synergies in these sectors as all three affect the restaurant industry in some form or fashion.
Our criteria for the companies we are acquiring is simple:
- Gross Revenues between $500K-$2M
- Been in business for at least 5 years
- Have at least 5 employees or management structure in place.
- No franchises or franchise fees, must be independently owned
The restaurants we are acquiring either have stable management-in-place or are operator-led, but easy to transition to becoming manager run. The systems we will employ will improve profitability. We will ultimately position the companies to be sold in 3-5 years. Some will be sold outright, others will be merged and sold for larger multiples down the line.
We are small business consultants with a specialty in restaurants that initially consulted restaurant owners on how to improve their profitability, but as the market has changed, we have decided to acquire them instead. In 2020 during the pandemic, we looked at nearly 250 companies. We have come to the conclusion that now is the time to buy. We have partnered with a larger group with over 40 years of expertise in restaurant management and has successfully exited over 24 companies.
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