Selling a pizza shop

[jackaloo]

Opened a 2nd shop and things aren’t going well
Called a business broker and he wanted me to sign a contract giving him 9% commission
with a $9k minimum commission
so if it sells for 36k then he gets 25%

this seems real high
what is typical?

thanks,
Paul

 

[bouldercreekpizza]

Talk to 3 other business brokers. I always get 3 to 4 quotes. What could you get by liquidating the equipment versus selling the location? If the shop is losing money and the location is poor, it might be a tough sell. Although, as they say in India, “There is a seeker born every minute”.

 

[bodegahwy]

I am a business broker. I would not take a listing for a new, money losing pizza shop at any commission rate. If this guy does not have a track record selling small unprofitable businesses tell him to pound sand.

On the other hand, 9K is not a lot of money if that wraps everything up. Don’t get hung up on the %. Often as not a broker has to split the commission with another broker and pay expenses and ends up doing the whole thing for a couple of grand… not a lot of money when you consider they have expenses too.