Running a Restaurant/Buying a Restaurant


Hello Rick: I am thinking of buying a restaurant that has closed because of partnership issues.  Here are some numbers. Wanted to get your advice on what you think about this deal.

Gross - $728,000
COGS - $237,000
50 seats
No labor and food cost numbers available
Rent - $5060 with a 4% increase each year. The lease is for another 3 years and 4 months with an option for a 5 year renewal. The taxes are 50% of any increase. This year that was $2500. The Repairs and Maintenance for 2011 was about $17,000 which includes all service contracts such as refrigeration, pest control, hood cleaning, as well as other inspections that need to be made. (Is this really needed?) The Utilities for 2011 is just about $28,000 which includes gas and electric billed by ConEd and water and oil billed by the landlord.

$11,000 for insurance. Dishwasher, which runs about $200 a month.

To me it seems like the expenses are off the roof. Please advice. Thank you.

Dear Nikki,

The rent numbers are good roughly 8%

the issue here is no numbers for food cost or has to ask......why not!!  Those are the 2 highest costs in any restaurant....

Without that info, i would cease negotiations!

The other numbers are within the normal range.......

Much of this deal would depend on your experience and ability to run the restaurant.


Running a Restaurant

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Rick Dudasik


I can answer questions relating to most areas of the restaurant industry including: starting a restaurant, design, food costing and pricing, site selection, staffing, training, equipment, profit and loss questions, sales training, recipies and many other areas of the industry. I have been in the industry for thirty years and have experience in fast food management, multi unit management, casual dinning management,and ownership. Have helped open over fifteen units throughout the United States.

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