October 27, 2023 | Business Resources

My Lease Is Coming To An End, Should I Sell?

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Are you a restaurant owner with a lease that’s about to expire? As you near the end of your lease term, you might be wondering about your options. Should you renew the lease, or is it time to explore other opportunities? In today’s competitive commercial real estate market, restaurant conversions are always in high demand, and now, more than ever, selling your restaurant could be a lucrative decision.

Searching for more helpful insights pertaining to the sale of your business? Explore these other pages from our site. 

The Shift in the Restaurant Industry

In recent times, the restaurant industry has witnessed significant changes. With fewer opportunities for lease, many business owners are now considering alternative options. One of these options, which often goes overlooked, is the Sale of Business through the assignment of your lease.

Understanding the Sale Of Business

The Sale of Business is a pathway that allows you to transfer your lease to a qualified purchaser. It’s important to note that in this process, you’re not selling the restaurant’s name or brand. Instead, you’re selling the assets associated with the business. These assets can include the entire kitchen equipment, furniture, liquor license (if applicable), and the remaining lease term.

This approach might sound confusing to some, but with the right guidance, particularly from a seasoned business broker, it can turn out to be a more financially rewarding option compared to starting from scratch with a new buildout.

What our partners have to say about their experience with Northern Hospitality: Seller Success Stories

Factors Influencing the Sale Price

Several factors can influence the sale price of your restaurant when you decide to go through the Sale of Business process. It’s essential to understand these factors as they will help you determine the value of your business:

  1. Condition of Equipment: The state and maintenance of your kitchen equipment and other assets play a crucial role in determining the selling price.
  2. Contents: The inventory and contents of your restaurant, including tables, chairs, cookware, and other chattels, can significantly impact the final price.
  3. Layout and Configuration: The layout and configuration of your restaurant can affect its appeal to potential buyers. A well-thought-out design may command a higher price.
  4. Seating Capacity: The number of seats in your restaurant can influence the attractiveness of the business to buyers, affecting the sale price.
  5. Lease Terms and Rates: The remaining lease term, as well as the rates and conditions within your lease agreement, will be key considerations for prospective purchasers.
  6. Location: As always, location plays a significant role in determining the value of your business. A prime location can fetch a premium price.

Selling your restaurant through the Sale of Business can offer numerous advantages. You can transition smoothly, minimize downtime, and benefit from the demand for established restaurant businesses. However, it’s essential to approach this process with a clear understanding of the factors that can impact the sale price.

To make the most of this opportunity, consider enlisting the help of a business broker who specializes in the restaurant industry. They can guide you through the intricacies of the Sale of Business process, helping you secure the best deal possible.

As your lease comes to an end, don’t automatically renew it without exploring all your options. Selling your restaurant through the Sale of Business could be the right move for your business’s future. Take advantage of the high demand for restaurant conversions and make an informed decision that will benefit both you and potential purchasers.

Ready to find a first-rate buyer for your business? As Ontario commercial real estate experts, Northern Hospitality can help you find success. Send us an email or call 647-280-4404 to get started.