Opportunities
Thriving Upscale Restaurant with Passive Ownership
$5M in Revenue in 2021!
Specifications
With over $5M in revenue and a profit margin far above the industry average this upscale restaurant in Pennsylvania is thriving! An established staff and management system has allowed the current owner to take on a passive role in business. 50 staff members offer a varied menu including elevated and delicious classics like Italian pasta, prime rib, salmon, fried calamari, seared scallops, and mussels that keep clientele coming back again and again. Luckily, the business has plenty of space to host the citizens of Harrisburg and surrounding areas. With 5,000 square feet and the capacity to host 100 customers indoors and additional covered booth seating available outside, there’s plenty of room for everyone. This restaurant also boasts an exclusive liquor license valued at $500K as Cumberland County has limited business allowance. Established staff, high profile and varied menu, and a closed market liquor license are just a few of the factors that set this business apart from competition.
The COVID-19 pandemic forced the restaurant to close from mid-March to mid-April 2020, but they quickly bounced back with the introduction of curbside pickup (that is still readily available and utilized) and were back to full capacity by the middle of summer. The current owner provides general oversight for the day-to-day operations, but this is a preference and could be easily phased out as they have two full time managers. With an established website but minimal online marketing, a significant and cost-efficient growth opportunity exists for new ownership.
Priced at $2,590,000, the restaurant is primed to continue its current growth pattern far beyond 2020 with 2021 annualized gross sales over $5M! A 15% down payment of $388,500 returns $457,123 in the first year after debt payments – a 118% return on investment!
Business Highlights
Year Established: 2010
Location: Mechanicsburg, Pennsylvania
Service Area: Harrisburg, PA, and surrounding suburbs
Menu Items: Classic Italian pasta, prime rib, salmon, fried calamari, seared scallops, mussels
Lease: ~5,000 sq. ft | ~$7,000/month
Reason for Selling: Retirement planning
Personnel: 50; 30 servers (15 FT); 18 kitchen staff (15 FT); 1 FT GM; 1 FT Kitchen Manager
Seller Training Period: As long as needed for buyer
Growth Opportunities: Expand online presence and introduce new menu items
Current Owners’ Responsibilities: General oversight, no labor
Financial Highlights
- List Price: $2,590,000
- 2021 Annualized Cash Flow: $785,573
Cash Flow Analysis
| Description of Financial Statement | P&L Statement Jan-Nov 2021 | Tax Return | Tax Return | Notes |
| 2021 | 2020 | 2019 | ||
| GROSS SALES | $4,594,676 | $3,272,260 | $3,902,876 | |
| Annualized | $5,012,374 | |||
| Net Income Shown on Financial Statement | $-268,147 | $-293,816 | $36,313 | 2021 includes PPP adjustment |
| ADDBACKS | ||||
| Compensation to Owner | $789,000 | $378,000 | $352,000 | |
| 11% Tax on total W2 Salaries | $86,790 | $41,580 | $38,720 | |
| Depreciation | $0 | $46,594 | $53,170 | |
| Interest | $4,439 | $7,173 | $8,574 | |
| Amortization | $10,000 | $20,000 | $20,000 | |
| Meals & Entertainment | $947 | $780 | $332 | |
| Owner Health Insurance | $21,670 | $23,640 | $23,640 | |
| Wage | $25,600 | $40,705 | $39,750 | Son |
| Wage | $39,069 | $29,800 | $31,800 | Wife |
| Personal Vehicle Lease | $5,442 | $5,937 | $0 | Ford Lease $494.79/month |
| Personal Vehicle Lease | $5,235 | $5,711 | $0 | GM Lease |
| Donations | $64 | $0 | $0 | |
| TOTAL ADDBACKS | $988,256 | $599,920 | $567,986 | |
| Seller's Cash Flow = Total Addbacks + Net Income | $720,109 | $306,104 | $604,299 | |
| Annualized | $785,573 | |||
| Profit Margin | 15.67 % | 9.35 % | 15.48 % |
- 2020 figures down due to COVID-19 pandemic (forcing a one-month long closure and a steady four-month long process to get back to 100% capacity)
- 2021 cash flow includes the PPP loan acquired during the pandemic
Valuation
Funding Example
Funding Details
Business:
Offer Price: $
% Buyer Cash Down at Closing: $
% Seller Carry Back via Promissory Note: $
year term at a rate of %
% of Purchase Price secured by Buyer and Seller
Total Bank Loan Need: $
% of Purchase Price
Desired Loan Type:
Desired Bank Terms: year term at a rate of %
Total Business Assets, Inventory, and A/R: $
Total Undercollateralized Loan: $
Loan Payments
| Monthly Payment to Bank: | $ |
| Yearly Payment to Bank: | $ |
| Monthly Payment to Seller: | $ |
| Yearly Payment to Seller: | $ |
| Total Monthly Debt Service: | $ |
| Total Yearly Debt Service: | $ |
Conclusions
Fixed Charge Coverage Ratio
The bank will require a minimum ratio of 1.5 to be lendable.
|
Cash Flow: 2021 Annualized Cash Flow |
$ |
| Annual Debt Service: | $ |
| RATIO: |
Buyer's Net Operating Income (NOI)
The amount of money the Buyer will retain as profit.
|
Cash Flow: 2021 Annualized Cash Flow |
$ |
| Annual Debt Service: | -$ |
| NOI: |
Buyer's Return on Investment (ROI)
The rate of return on the Buyer's down payment.
| Down Payment: | $ |
| NOI: | |
| ROI: | % |
Attachments
| Document Title / Description |
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210 N 78th St. 2nd FloorOmaha, NE 68114
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