Am I asking the right amount for my store?

I am selling my store. It has averaged about $2500/week in sales. It is at break even at that amount. I have started a new marketing campaign and we did about $3500 for 3 of the last 4 weeks. It is a delivery takeout and has a walkin cooler. Make line, dough cooler, Bakers Pride Y-600’s, and has been in the same location for over 10 years.

I am asking $29,900. It is part of a 12 store local franchise that is known for our “Worlds Largest Pizza” a 24" round pie. FC runs about 34% and includes the 4% royalty. Labor is about 21-22%

I work every Friday and Saturday and am on call the other 5 days but I have a maanger running it for me. I am sick with something called Crohns Disease and need to have surgery. What do you guys think? My thought was that you cuoldn’t open a store for that amount and it would be a great deal for someone. I look forward to your responses even if you tell me I am nuts! Thanks!

Take inventory of your equipment and get it appraised. Of course, there are two values: wholesale and retail. If you’re leasing your space the appraisal will give you a ballpark on how much your store is worth because, unfortunately, it doesn’t look like you’re in a positive cash flow status.

Once you’ve determined the worth of the business , set your price in accordance with the retail value(I’m guessing around $20k). I don’t think you’re way off the mark at all asking $29,900. Remember, the business is only worth the price someone is willing to pay. You might find someone out there willing to pay that price, especially if you’re willing to do a little owner financing. Hope this helps. -J_r0kk

I’m told the equipment is worth about $15K as it is used. This was the price from a used equipment dealer. I figured the rest would be for the build out, customer database, goodwill, phone number, and not having to start from scratch.

Is $15k what the used equipment dealer will BUY it for or would TRY TO SELL it for? Big difference.

Honestly, the fact that you’ve been in business for 10 years and are ONLY breaking even doesn’t make it an attractive investment. Either your product is sub-par or your demographics are wrong. $2500 a week is horribly low for a money-making business. 130k in annual sales just doesn’t cut it. People go into business to make money, and knowing the slim margins on restaurants as a whole, there is nothing to entice more than wholesale value of the equipment.

Even if you could show $25k profit from $130 in sales (which would be a good percentage for profit), who wants to pay $29k to earn the same $25k they can earn anywhere else in fast food without the headaches of ownership?

He would buy it from me for $15,000. I have only owned the store for 1 year. I bought it last year, got rooked. I was told it was making a huge profit. Even so, I have increased sales even over the phony numbers I was given last year.

Then you have a solid offer at $15k, but are asking twice that. Do you think you’ve reached the store’s full potential? If so, I just don’t see anyone wanting to buy into that job. If you started at $1000 a week and can show month over month and year over year growth that is steady or rising, you might have something worth buying.

The “value” in your store is the difference between what the equipment will sell for right now vs what the “business” will sell for. As you’ve mentioned, leasehold improvements, name, phone number, existing customers and “goodwill” are all things to be considered. However, to be doing $130k in annual sales, you’re simply going to have to find someone who sees the potential, not just the present.

A lot of good advise here. Like mentioned before, it all depends on what the buyer wants to pay. If you are willing to hold a note, you can sell the shop for more than an all out cash buy out but you are taking a risk of not being paid.

Is your market loaded with pizza shops? How does your product compare to the others? What are your marketing strategies? 2500/wk is low and if you could jump those numbers a little, you could get more.

Where are you located?

I am in the suburbs of Detroit. Blue collar area. All the big players are here as well as several independents. My marketing program that I developed (after wasting a lot of money following the franchise system) has taken off so well that the franchise has adopted it and now has other stores do it. It works well. It is a combination of things I learned in the Black Book and then my own design and wording for a follow up. I even have a special Christmas Card that is getting printed tomorrow and sent to everyone who ordered from July 1 up to today (that we have addresses for)

This marketing has ratcheted up sale almost 40% in the past 2 months. The franchisor said if it keeps improving I won’t want to sell, but I told him that I am done with this. I am too sick and need to have surgery pretty soon.

PM me, I’m in the Detroit burbs as well. Maybe I’ll come take a look.