There are many traps the first comer to the caf? business should understand. I have outlined the top 7 points to check on and consider, when buying a caf?.
Its is a great business to be in and at the moment some great bargains are to be had out there, as not many people are buying, but there are many good cafe’s and restaurants to be had and don’t let the current economic situation deter you from your goals.
I have outlined 10 points you must look at very carefully when buying a caf?. You must do your homework and be 100% sure on all these points.
You never see a franchise operation in a backstreet do you? And so don’t even consider buying in a backstreet, the rent will of course be cheaper but remember the old adage “you only get what you pay for.”
2. The lease:
Make sure you read the lease carefully, don’t just leave it up to your lawyer to do this, you must make and effort here and anything you don’t understand, make a note and when consulting your lawyer bring these points up.
A lease should be a minimum of 12 years long, 15 would be preferred, and then you have something to sell to the next person buying a caf?.
So a 5 x 5 x 5 lease is perfect, this means you have 5 years to run before you can either renew for 5 years or get out, but you can effectively stay for fifteen years.
Some leases have the lessee (you) paying for all the external repairs and maintenance to a building, look these are hard times now so negotiate all points in a lease.
When buying a caf? make sure you have at least 40% to 50% of the money needed as the repayments might cripple you. The best avenue for finance is vendor finance, then bank finance (collateral required here), friends and family, I would advise not doing the friends and family thing if you can avoid it, but if you insist then make sure you have legal documents in place to cover both parties as you don’t want any nasty comeback on this.
4. Checking the Books:
I was told in my early years when buying a caf?, to make sure you get a business mentor or a respected businessman in your area … Read More