SELLER IS RESPONSIBLE FOR THE LEASE: Leases usually hold the Seller responsible for making the rent payment should the Buyer default. Look to the language in the lease to see whether this is the case. If so, make sure to do some basic screening of the buyer such as experience and credit history. SellingStores does not check a Buyer's credit.
DEFERRED MAINTENANCE: First impressions are lasting impressions. It is critical the store show well when put on the market. Make sure all pieces of equipment and display units are in good working order. If repairs are needed, either fix it or remove it from the premises. Make sure all the plumbing, electrical and heating, air conditioning and ventilation systems are in good working order. Cleanliness is a key element in a buyer's impression. So make sure the entire store is clean including the dining room, back of the house and restroom areas. Remember, the sales price is based on a fully functional store, meaning every thing is in good working condition. If there is deferred maintenance, you will be required to spend the time and money to repair such equipment before the sale.
MEANING OF "AS IS:" In California, "as is" is defined as a Buyer accepting defects to the business or property which are fully disclosed to the Buyer. In other words, a Seller must disclose all material facts and defects about the business or property to the Buyer in order to be relieved of liability. Even full disclosure may not completely relieve the Seller of liability. SellingStores always recommends making the necessary repairs to the property or business before selling it in order to avoid future litigation. Otherwise the sales price must be adjusted to reflect the defects.
GOVERNMENT AGENCY VIOLATIONS: The Seller is responsible for passing any government agency requirements to transfer the business. If the Seller is unable financially or chooses not to bring his business up to standard regarding maintenance and health department issues the Seller should be prepared to adjust the sale price accordingly.
EQUIPMENT LEASES: The Seller must pay-off all leases. In performing a valuation of the business, the leased equipment costs are added-back to income to determine Seller Discretionary Cash Flow (SDCF). (Don't get equipment leases confused with monthly equipment rentals which may be standard to the industry.) This is done for two reasons: First, equipment leases are not easily transferred to the Buyer and usually are restricted to transfer. And second, adding the cost of the lease equipment to SDCF increases the sales price of the store by 2 to 3 times the amount added-back.
LIQUOR LICENSE TRANSFER: It typically takes 45 days from the application date to transfer a license. This applies to Beer and Wine as well as Spirits. The posting usually goes up after the due diligence period is complete. After the 30 days the Buyer must deposit into escrow all the funds required to close the transaction. This includes cash and note as well as funds from a lending institution. Escrow will notify the ABC the funds are in escrow. Then it takes another 5 to 10 business days for the ABC to transfer the license. At this point, the deal closes and money changes hands. Seller gets paid after all government clearances.
CONFIDENTIAL VISIT BY THE BUYER: SellingStores' business model is simple. We eliminate tire-kickers, allowing our agents to focus on the serious Buyers. The result is simple, SellingStores sells more stores than anyone else - there is not even a close second. Our website allows a buyer to sign an interactive on-line confidential agreement in order to gain immediate access to the name and location of the store. As a result, the Buyer is not burden by today's clumsy brokering process where faxes and phone calls go back and forth resulting in frustrated buyers who don't get the information needed to make a decision. At SellingStores the Buyer signs an on-line confidential agreement without the broker's slowing the process down. The Buyer agrees to visit the store as a customer. The Seller won't know the Buyer even visited the store. SellingStores offers an extremely confidential process if the Seller desires. Please let your agent know if you'd like this option.
QUALIFIED BUYERS: Before writing an offer, in most cases SellingStores requires the Buyer to complete a "Buyer's Profile" containing the Buyers work history, a personal financial statement, and credit check authorization, along with other critical information. Ask your agent for this information before accepting an offer.
SELLINGSTORES.COM'S COMMISSION: SellingStores has a policy of not negotiating our commission. You are paying for experienced professional agents who protect you and get top-dollar for your store. No one is better qualified at selling your store than SellingStores. SellingStores is worth every dollar! Talk to your agent about how SellingStores sold stores for prices much higher than the Seller expected.
NEVER TALK ABOUT PRICE AND TERMS WITH A BUYER: SellingStores' whole business model is about trusting our clients. We think people are honest and have integrity. If the Seller meets the Buyer, do not talk about price or terms. More often than not, when a Seller and Buyer attempt to negotiate a deal without the Broker being involved, it hurts the Seller's negotiating position. If you find a buyer wanting to talk price and term, merely refer him to your agent. Don't make the mistake of getting trapped and losing a potential deal.
SBA LOANS: Having an SBA approved store can dramatically increase the chance of selling it for top dollar. In order to be SBA approved the store must have solid tax returns showing profit for the past three years and the sales price must be over $250,000, in most cases. In addition the Buyer must have store experience, good credit history and collateral (but not necessarily), such as real estate, in order to secure the loan. Ask your agent if your store qualifies for an SBA Loan.
LENDING MONEY TO BUYERS: If you decide to extend credit to a Buyer, check the Buyer's credit worthiness. SellingStores' agents are not credit analysts who interpret credit reports. SellingStores will, however, supply a "Buyer Profile" as mentioned above. Please ask your agent for a copy of the Buyer Profile before accepting an offer. SellingStores takes no responsibility for the Seller's decision to extend credit to a Buyer. It is risky, but in many cases it may be the best way to get top dollar for the store.
