On tonight's Food Network premiere episode of "Buy This Restaurant," expert restaurant broker, Keith Simpson came to Austin, Texas to help a young couple expand their juicing business in this episode titled, “A Juicy New Business.”
Joanie & Cary are the buyers who operate a mobile business that they would like to convert to a brick and mortar shop. Their business produces juices and smoothies and is known as Skinny Limits. As their business has expanded to vegan and vegetarian take-away meals, the space in the truck is limited. They would like to have a place that includes room for outdoor seating and a bigger kitchen.
With a maximum budget of $350,000, they are hoping that Keith can find something that will enable them to continue their dream. With four kids and college educations on the horizon, they must be successful to secure their family future.
The first location is a lovely turnkey operation in the heart of Austin’s restaurant district. They would have to purchase the business, and still pay rent on the property. The business has a front yard that will handle lots of seating. When they arrived, they gave Keith a bottle of their green juice, which he enjoyed, although he never drank anything green before. This business was asking $350,000 for the business; the top of their budget. Keith believes they could negotiate the price. The rent is $4,500 a month. Upon looking inside, it was a bar, and they immediately could not conceive what it would look like as their business. So Keith tried to have them picture what it could be like. Included in the price are all the FF&E (fixtures, fittings and equipment). Although they did not need all the equipment, Keith knows they could make about $20,000 by reselling the equipment. Then Keith took out his tablet and gave them the picture of what their business would eventually be. By stretching their budget by about $125,000, they would likely return their investment in about a year.
Next stop was a music store that needed plenty of tender loving care. It has never been a restaurant, but is in an up-and-coming neighborhood on a busy main road. With no business to purchase, and a corner location, they have rent of $4,600 a month and a monument sign outside to have their name, for all who pass by. With the corner location, they can have signage on two sides for more notoriety. The place is huge, and nothing like they have now. Keith showed them how they could design it for their operation. Existing damage to walls and ceiling would be taken care of by the owner, who will give them about $80,000 for improvements, either by a lump sum, or rent decrease over a period of time. Keith recommended they take the lump sum. Keith estimated $300,000 to renovate, and about the full amount of their budget the first year. The $80,000 from the landlord, will be their working capital, and he projects they will recoup their investment in about eighteen months.
The third place was an abandoned Thai restaurant in a wealthy neighborhood outside of Austin. They are familiar with the area, as they deliver from their trailer here all the time. It is a stand-alone restaurant, with no other tenants. There is plenty of room for a patio, and much of the equipment is already there. The rent is $6,000 a month, but Keith told them it was negotiable. One problem; it is dirty, and the kitchen was left in disarray. On the good side, it has all the permits and plumbing and extraction hoods, known as infrastructure. As he gave them the picture of what it could be, he felt that with renovations and landscaping of $225,000 and rent of $72,000, their first-year investment is just under $300,000 and $50,000 remaining for working capital. He estimated the return in about eighteen months.
Now they will sleep on the decision and let Keith know the following day. When they met with Keith, they decided to go with the corner location.
Keith advises viewers to check here to see how the cafe is doing since he brokered the deal. Subsequent episodes will air starting Wednesday, so if you liked what you read, please Subscribe, and you will never miss another post from this Television Examiner. Thanks!