Question about selling.....

As you already know we are selling our 2nd location. All that is included in the sales is the real estate and equipment…NOT the business.

Our agent wants a copy of our business financial statement “to be filed” for serious buyers…

Does this sound ridiculous to you all? She said she has a “serious” buyer who is interested but wants to see the potential the location has. (This “buyer” had not had a walk through unless it was an agent who toured with other agents about a week ago)

I don’t see what my current business has to do with anything. Also it should be noted that we personally own the building and lease it to our business. And if this matters our two locations are one entity and our financials are combined. They would look fantastic to a buyer but do I really want this information in a “file” somewhere?

Your thoughts are appreciated.


If I was purchasing the real estate I would definitely want to know how the business was doing financially. It’s very possible you could have an investor looking to purchase the property and re-lease it to an operator. He or she needs to know their level of risk before making an offer.

Even if I was planning on buying the real estate and operating the business myself I would still want to see how you’re currently doing. That’s an indicator of what I might be able to expect. To be honest, the first thing going through my mind would be “this person must be in trouble to be selling.” Even though we on the TT know that’s not your situation your potential buyer doesn’t.

But, if I was the seller there is no way I would put my financials “on file” with my agent. I wouldn’t even allow my agent to see the financials. If the buyer is serious they should be willing to cough up some refundable earnest money. Once that happens I’d have them sign a confidentiality agreement and they would be the only person allowed to see it (along with their attorney.) There’s no reason your agent needs to see your financials, at least in my opinion.

I’d also take the time (if possible) to split the stores’ income statements.

I would make the earnest money substantial… that will help weed out the “lookie loos” from the players.

I own several commercial properties that I lease out. If I were to sell one I wouldn’t have access to the financials of any of my tenants, and no competent commercial broker would even ask for them. On more than one occasion I have had tenants walk away and leave the equipment behind in lieu of rent . I’ve sold that equipment to the new tenants (who were planning on using the spot for the same type business) without having to provide any financial details on the previous tenants. I can’t see how anyone would expect you to provide them. If I understand correctly you are selling a building and equipment. Therefore any prospective buyer should be paying a fair price for the building and a fair price for the equipment. The business you were doing has nothing to do with the location, or the asking price (up or down), at least not in my opinion.

It is up to you whether or not you share them…If a prospective purchaser wants them and you do not give them up they may move on…If there is a lineup of prospective purchaser you will be okay…If not, you may have change your mind…

I appreciate your input.

I think I will stick with not giving them. I just wasn’t sure if this was some standard procedure I wasn’t aware of but I think like thunderman that if my business was not the tenant…and I had another tenant…I would never ask for their financials.

I also feel like if my financials were terrible…if I was going out of business…would I lower the builidng price…NO. So what difference does it make that I do make money…If that were the case I should tack on more money to the price.

Plus the main issue for me is my other location is only 30 miles away and the buyers are my potential competitor to some degree.

thanks again…


I would never give my financials to a broker. A serious buyer would observe the store traffic over a period of time in conjunction with whatever you provide once a deposit is given by the buyer. We’re all honest but it’s good to verify.

In the sale of a business the seller will nearly ALWAYS provide the financials to the broker. I would not accept a listing to sell a business with out them. I use them to help the seller arrive at an asking price… but…

You are not selling a business. When selling commercial real estate, knowing the productivity of the previous tenant is very useful.

The middle ground here is to provide the gross sales numbers for that location as well as things like utilities and property taxes. I would not provide anything else. I would ask for a non-disclosure from the prospective buyer before providing them.

In the real estate transaction, your food cost, labor cost, marketing, etc not relevant.