Buying A pizza place, Need advise...

[punjabi_guy]

Hello Friends,
A friend of mine thinks I am too smart(poor guy). He is trying to buy this pizza place in his neighbourhood. wants my help in decision. Few questions I like to ask to my friends here,
Sales average 40k mo. with moderate pricing. large 1top. 10.99 loaded 18.99, just added 25 seats & beer wine.
Non franchise. Good food. fair management. not aggresive on marketing.
6 year lease 2200 mo. 2100 sf building.
85% delivery. 155 take out(seats just added)

Do you guys think it is a good buy for 150k.
He’s asking me"how much I will make per month."
Hard working guy. 60hrs week. I will help him advertise more.
Any input will be apprciated.
Thanks.

 

[Patriot_sPizza]

where 'bouts in CA?

Shop seems to have decent gross…what has he been reporting to Uncle Sam?

There is room for sales growth and that may be where his big /true profit lies…

What are the terms of the sale…the current owner s/take back some paper if the gross is as good as it seems…

Oh, btw, I was an auditor once upon a time…

 

[punjabi_guy]

We are taking his word for now. Once we bring the offer, will go thru the tax returns. I do think it has some growing potential. It is located in the central Stockton,California.

BTW: Seller says the sales are 38k not 40.

 

[Patriot_sPizza]

also consider the PMQ report, pizza power, to give you an idea of the sales volume…

look at the assets…is it a fully equipped store? Age of the equipment…

Is the lease assumable and @ what rate…

how much will you have to dump into to keep it open? Cash Flow is King! Negative cash flow sux!

You are buying the site, the gross sales, the ibuild-out/mprovements…assets/equip are worth $ .10 value on the dollar…

 

[snowman]

Is the 38k sustainable? I’d say with dine-in and adding beer, the sales could have spiked for a month or two. You don’t want to buy based on a couple months, but averaged over a longer term. For instance, the guy could go on a doorhanging blitz and temporarily raise sales without being able to sustain that growth.