Purchasing a pizza place

I have a question, First off this is the only info I know
A Pizza place for sale in my area for 50k the lease is 1600/month with a 5 year option expires 2012 sq ft 1050
Annual revenue is 78k years owned is 1
So I filled out the NDA and the broker gave me the address
I took a peak inside and know the area as your not suppose to talk to anyone I left
I than asked the broker for more info ( pos, ovens, freezer, financials, etc) as I would like to make an offer
He than said to me I have to make an offer first than they will disclose the info I want
Well how can I make an offer if I don’t know what the store has or the business has been doing with out proof?
Is this how it’s done? Should I just make an offer of 15k and see if they give me the info I wanted to know?
Does this sound like and asset sale?
Any input would be greatly appreciated

Thanks,
FrankJR

Unfortunately, that is very common. I would say about 50% of brokers operate like that. It is annoying.

However, in the contract will be a contingency stipulating that you can pull out of the deal if you are not satisfied with the accounting records, asset list, etc. So you are not really out anything to put in an offer, just a bunch of time if they are not what you are looking for.

Annual revenue is SEVENTY-EIGHT THOUSAND? Either we aren’t talking about “revenue” or you’re looking at a complete and utter DOG.

78k would have you working full time and living off welfare.

Even if NET profit is 78k, I am not sure it’s worth buying. If the owner runs it completely absentee, then 78k is certainly a good amount to not step foot in the place. If the net profit is 78k and the owner is working 80 hours a week, I’m not sure the potential is worth the risk. I sure wouldn’t pay lots of money for such an existing business.

It all comes down to where you “are” in life. Are you flipping burgers and making 15k a year or are you gainfully employed making $50k and having benefits and such? You’d be amazed how much a $50k/year job actually costs the company. There’s the employer-side of FICA, benefits, sick time, etc that does add up.

Now, let’s assume that you were talking NET PROFIT instead of REVENUE and you are interested in purchasing the place. Now let’s pretend you’ve got a killer '69 Camaro that is the envy of everyone around. Some guy tells you he wants to “take it for a spin” before he makes an offer, but you aren’t into joy rides. The guy has to make a legitimate offer that you will accept before you let him see what that baby’s got in her, right? At least you need to be close. If he’s offering $5k and you won’t take under $20k, the discussion is over before it even starts.

By the way, if you do have a killer '69 camaro you want to sell for $5k, give me a hollar :).

We’re fighting for that Camaro.

Otherwise, I agree with this assessment totally.

Offer them what you think would be a fair price subject to review of financials. If you dont like what you see offer them less or walk away. Sometimes they also want a deposit put down so be ready for that as well.