Tag Archives: chain restaurants

Restaurant Business Purchase Valuation Trends

Restaurant business purchase trends have improved, but you have to know wheree to look for buyers

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Earnings and Valuation Distortions, Part 3

Earnings and Valuation Distortions, Part 3

Retail businesses and chain restaurants battle minute by minute for customer attention and to make a splash. Too old of a store base means something is wrong—the company is in cash cow mode, or it can’t find sites, or that its new stores aren’t economically viable. In the chain restaurant arena, refranchising is underway in […]

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Restaurant Sector: Survival and Potential Conflicts, Part 4

Restaurant Sector: Survival and Potential Conflicts, Part 4

Traditional Industry Conflicts Due to the fairly difficult nature of the business, some traditional lines of conflict between elements of business and society routinely emerge: Restaurant owners /operator vs. government and regulation: as noted earlier, restaurants are very highly regulated. One visit from the Board of Health can shut a restaurant and result in loss […]

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Restaurant Sector: Survival and Potential Conflicts, Part 5

Restaurant Sector: Survival and Potential Conflicts, Part 5

Restaurant owners/operator vs. lenders: lenders are somewhat suspicious of restaurants and the perceived high failure rate. While there are periods of easy money and credit, single unit operators at best have very constrained credit availability, and the big chains and successful large franchisees have it somewhat better. But even the large chains are not immune […]

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Restaurant Sector: Survival and Potential Conflicts, Part 3

Restaurant Sector: Survival and Potential Conflicts, Part 3

Most of the economic performance of any restaurant can be determined by the restaurant level economic drivers: amount of debt, interest rate, sales, cost of operations, and the cash flow (or outflow) that results from every restaurant. Once a restaurant operator reaches about 5 units or so, they will benefit and grow through economies of […]

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Restaurant Sector: Survival and Potential Conflicts, Part 2

Restaurant Sector: Survival and Potential Conflicts, Part 2

Despite the initial cost markup on food—restaurants have heavy fixed costs and really are truly busy with customers only a few hours a week. For example, the most profitable restaurants—McDonalds and Darden have reported total company profit margins only around 10%. For the independent operator, the economics is all about trying to pay their rent […]

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Restaurant Industry Overview and Analysis

Restaurant Industry Overview and Analysis

Restaurant Sector overview. Big business, big employer, multiple impacts. First of a business analytical focused series.

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