Found a pizza shop listed online for sale, advice needed!!

Pizza Shop Talk The Think Tank
1

Hello everyone!

I first want to thank everyone who responded to my 1st thread regarding taking over the pizza shop I work at—I am still there but don’t plan on taking over ownership duties. Usually you can get pretty stoked at the opportunity, but thanks to you guys for bringing me down to base level again

I am not sure if I am allowed to post specifics on this site or not. I will be logged in all day, and if someone has a problem with me giving out specifics, I will immediatley edit my thread to not disclose any details…

Anyways, I am looking to relocate to Virginia, as I have some contacts there. More specifically, Charlottesville.

I went on www.bizbuysell.com and found 1 pizza shop for sale in that very city. Without giving the exact link, this is the information provided:

Italian restaurent pizza subs pasta burgers fries

Asking Price $50,000 Inventory $5000*
Gross Income $364,000 Real Estate
Cash Flow $60,000 Year Established 2005
FF&E $150,000* Employees 3

  • included in the asking price
    ** not included in the asking price
    This is a nicely decorated middel of the town ofcharrlottesville va on main street very close to university of va and hospital this is a three years old restaurent offers dine in carry out and delivery this place use to do $14000 /per/weak owner had heart problem went under surgery now obsenty owner restaurent is doing littell over $7000 p/weak it has the capicity for $20000p/w for a right person all equipment including middellby marshal oven walk in cooler grill fryer pizza prep table sandwitch unit freezers phones system 20 feet hood system are in very good condition

Facilities: 1600 squir feet 47 seat leas $3280 p/m 7 years left easly extandabl lease

Competition: Yes

Growth/Expansion: Thier is a lot of possibilties for a experinced person

Financing: Possible For Right Person

Support/Training: As needed

Reason Selling: Heart Problems And Age

Now obviously the owner has some trouble with his English skills. His name is foreign. I called the actual shop today because there was a telephone number listed, and asked for the owner. He is to be back between 6-7pm. The person whom answered sounded very foreign as well.

My dream would be to go in there and modernize the menu and building and build it a new reputation. i do not know if it is a franchise or a chain. I can give the actual name (or remove some info ladready provided) of the restaurant if this website permits me.

I would like to know what questions to ask, exactly, and make sure I don’t overlook anything. It sure SEEMS to be a sweet deal…

THANKS IN ADVANCE

2

Re: Found a pizza shop listed online for sale, advice needed

PROVE THOSE NUMBERS… until then he’s just telling stories.

3

Re: Found a pizza shop listed online for sale, advice needed

It really does sound to me like a good deal. As posted above, you will want to document the numbers. Getting in sooner rather than later is important if the place is sliding. I wonder if they would let you work there for a month before closing?

Do get a copy of the lease and have an attorney look it over. Specifically, you will want to understand the sections on lease assignment, rent escalation, and options. The rent is on high side for the sales volume right now, but if the business has a history of meaningfully higher sales volume and you think you can get it back to that level, the rent should be OK.

4

Re: Found a pizza shop listed online for sale, advice needed

Hi Edgar:

I can only comment on the equipment as that’s my business.

It appears that a restaurant equipped to function as indicated would have an investment in equipment alone well in excess of the asking price for the entire operation.

The 20 ft hood alone, with make up air could be a $20,000.00 to $25,000.00 item if done properly.

You say this operation is three years old? To me it appears to be the great buy of the century or there is something unusual above and beyond illness that is determining the price.

George Mills

5

Re: Found a pizza shop listed online for sale, advice needed

I appreciate the feedback thus far. Thanks to you!

I was wondering if someone very knowledgeale could take 2 minutes to make a mock list of questions I can throw together when I hopefully talk to this guy. He has yet to email me back so I am assuming I have to call and get a feel for the deal.

The only thing I don’t care for especially is that it is a dine in. I would prefer a take out and delivery only as it is simpler and less headache. Of course I can be wrong…

6

Re: Found a pizza shop listed online for sale, advice needed

You have some good starting info. A couple of things I can offer:

  1. Delivery business is EXPENSIVE. Insurance, worker’s comp premiums, enough drivers to cover shifts. Lots of costs involved, more paper goods to stock.

  2. Do ask very directly if he OWNS the equipment outright or leases it. Could be an unfortunate surprise. Also check to be sure there is no outstanding debt in the business that is collateralized by the equipment. Another unfortunate surprise to head off early.

If we trot out a complete list of questions, then you can get your answers right away. If you research more and use us as a resource, you will learn about the business and be able to make plans for yourself. There is a great resource of links to conversations previously on the Think Tank. You’ll get wisdom from current and former regulars here on the forum.

  1. Prior tax forms, ordering invoices for food, Worker Comp reports and sales tax returns are must-see at the point you are seriously negotiating.

http://www.pmq.com/tt/viewtopic.php?t=3374

I have found that there is value in the struggle. Even if you don’t check that out, do ask for clarifications and additional info. I’m not the genius on that, but some here are.

7

Re: Found a pizza shop listed online for sale, advice needed

Thanks Nick.

I have actually gone thru the first 18 pages of forum threads to polish my knowledge. I just was looking for a succinct list. I am sure I can piece it together though.

If I were to own it I would probably want to get rid of the foreign workers in there with strong middle-eastern accents. Is that wrong of me?

8

Re: Found a pizza shop listed online for sale, advice needed

There should actually be a thread in the FAQ that gives a thorough list of questions and info to gather. Look under the Buying a New Business or Existing Business threads.

I say hire the people you think will best position your business to succeed. I also say that firing people due simply to ethnicity is a way to loose potentially skilled and loyal employees with the bonus of community issues. Keep who you want and hire who you think will do the job. If you do decide to dismiss them, be sure you NEVER say anything in public like the question you asked. The ACLU would come raise cane in your town.

9

Re: Found a pizza shop listed online for sale, advice needed

There has always been a rule of thumb that your employee base should mirror your customer base. People feel more at ease when they are in a similar crowd. If you have a lot of older people as customers, you should have some older employess. The same is true for other races and nationalities. Please don’t start profiling people. You will be surprised at what diamonds are in the rough.
I have always been a huge believer that what is agreed at the interview should be the basis for a strong foundation. Take your time interviewing for the position to be sure that it is a good fit for the you and them.
Bubba

10

Re: Found a pizza shop listed online for sale, advice needed

Well I have emailed the owner about his shop up for sale on bizbuysell, and still have yet to hear back. I also called the pizza shop and asked for the owner but the man who answered said he wasn’t around and he also stated that the owner comes and goes as he pleases and never knows when he will show.

I also called the owners’ cell phone numerous times and left 1 voicemail, never picked up.

You would think if someone was trying to sell their shop, they would be just a tad more on top of their game…

My friend who lives down there scoped out the pizza parlor and he said there was no business going on inside (middle afternoon) and he did say it looked very clean and modern in there. Thats nice at least!

11

Re: Found a pizza shop listed online for sale, advice needed

well, both Paul & I run college pie stores…yours might fit the same mold, if true success is sought…college stores are indeed a different beast…mine had strayed away from a successful formula & has had nothing but hard times since…

college stores thrive on delivery, and delivery can be costly, but Paul’s method of paying drivers seems to work for him & I am modeling my pay scale in a similar fashion…

Volume is the key…

12

Re: Found a pizza shop listed online for sale, advice needed

3 Employees?

13

Re: Found a pizza shop listed online for sale, advice needed

I guess only 3 employees. haha

It is a college town I would presume and has a nice mix of younger couples too.

The owner still has yet to respond back, and the fact I have called the store twice looking for him with someone foreign sounding does no appeal to me at all. Probably more due to the fact he was rushing me because I was asking where he was/when he would be around.

My gut feeling isn’t very good anymore. I will keep this updated though

14

Re: Found a pizza shop listed online for sale, advice needed

darn those foreign people owning businesses or working.