Prix Fixe Accounting’s Post

Thinking of buying or selling a business? Last time, I posted the general differences between asset sales and stock sales when buying or selling a business. Understanding these distinctions is critical for making informed decisions about business acquisitions. In an asset sale, the buyer purchases only select assets like equipment and inventory, forming a new entity without assuming past liabilities. This minimizes risk. A stock sale involves acquiring all assets and liabilities with corporate structure intact. This allows seller tax advantages but buyer assumes all past debts. Asset sales are best for brick-and-mortar businesses like restaurants. Stock sales work for online businesses like Amazon to maintain accounts. Understanding these key differences allows informed decisions when acquiring or selling a business. Watch the full video for an in-depth breakdown! https://lnkd.in/eHWD_hsd #assetvsstock #businesssales #buyingabusiness #sellingabusiness #acquisitions

CHUY Acquisition by Darden: More Information Piper Jaffray, who provided the fairness opinion on the Darden acquisition of Chuy's Restaurants, has updated its earlier opinion with more data, a rare action to answer questions. This reinforces what we could sense earlier: this deal was expensive for Darden. According to Piper, they paid at the very high end of the implied price range based on a chart of comparables. Some new data learned: CHUY free cash flow is projected to be negative $2.1M in the 2H 2024, and then $6.6M in 2025, $9.1M in 2026, $9.8M in 2027 and $24.3M in 2028. 2028 appears to be a "hockey stick" projection, unless that is CAPEX falling off. Today, CHUY EV is $667M, with a $37.41 price. That matters because, looking at Piper's casual dining comps, the under $1 billion EV multiples are lower than the over $1 billion group. The 2024 current stock market EV/EBITDA for the under $1B group is 6.6X. (median) Finally, casual dining acquisition multiples are down in 2023-2024. The earlier peak was 2017-2018 period. This reflects current market conditions. However, everything cycles in the #restaurant business. Even now, there are some monthly improvements. Darden has a stellar management team. It is the number one casual dining operator in the world, and it seems that they have (and must have) big plans for Chuy's going forward. See SEC filing link below. https://lnkd.in/gqJK4DBA

$CAVA the best of breed restaurant plays is breaking to new IPO highs today. It was put on @InvestorsBusinessDaily Leaderboard back in March which is how I learned of it. #IBDPartner Try LeaderBoard under $10 here: https://lnkd.in/e8MP6a9X

Valuing your restaurant is a crucial step in understanding its financial standing, attracting investors, or preparing for a potential sale. While the process may seem daunting, breaking it down into manageable steps can simplify the journey. Following these steps and approaching the valuation process systematically, you can gain a clearer understanding of your restaurant's financial standing and position it effectively in the marketplace. https://lnkd.in/dQGP6Fx9

Perhaps you are starting a restaurant from scratch or you are taking over a restaurant that closed. To raise capital to start your restaurant, your business plan should include a 1 page summary, details on use fo funds, target market, competitive advantage, 3 yrs of financial projections including revenue and expenses + market research that supports your plan. #rockyourrestaurant #startingarestaurant #businessplanbasics

Perhaps you are starting a restaurant from scratch or you are taking over a restaurant that closed. To raise capital to start your restaurant, your business plan should include a 1 page summary, details on use fo funds, target market, competitive advantage, 3 yrs of financial projections including revenue and expenses + market research that supports your plan. #rockyourrestaurant #startingarestaurant #businessplanbasics

Below is the story of how Wendy’s became the center of a modern pricing debate, but buried within is a fantastic quote about the future of revenue management: “…dynamic pricing is a pretty crude way to match supply and demand. What you really want is to know exactly how much each customer is willing to pay, and then charge them that—which is why personalized pricing is the holy grail of modern revenue management.” #PersonalizedPricing #Future #RevenueManagement #Hospitality #Aimbridge

Gabe’s restaurant, was facing a financial crunch, needing $50k to stay afloat. With Simmons Capital’s expertise, Gabe renegotiated supplier contracts and revamped his menu, turning potential setbacks into growth opportunities. THE RESULT? A 30% increase in sales, delighted customers, and a thriving business. 🍽️📈 Struggling with financial hurdles? Let Simmons Capital help you turn challenges into success. #gabesbistro #businesstransformation #financialgrowth #restaurantsuccess #businessfunding #finance #smallbusinessloans #cashflow #invoicefactoring #equipmentfinance #simmonscapital

More Sales? More Merchant Fees? Don't get caught using inefficient manual processes that will slow your close. Join us Tuesday, April 16th, for insights into a smooth financial close for retail and restaurant organizations in this webinar featuring Ruby Slipper Restaurant Group’s CFO, Jen Beougher. Register here: https://ow.ly/Q8it50RbA59

The restaurant industry is in the midst of a significant shift. A recent panel at the Restaurant Finance & Development Conference, including experts in real estate, banking, restructuring, M&A, and corporate strategy, emphasized the need for multi unit restaurant chains to reconsider their business models and strengthen their balance sheets. Among the key challenges, they cited are the lingering effects of the pandemic, tighter financial conditions that hinder capital investment, and a drastically changed landscape due to factors such as demographic changes, the work-from-home model, and surging delivery/takeout orders. One of the recommended strategies for survival in this new environment is restructuring real estate - everything from selling assets to renegotiating leases and closing unprofitable stores. This can bolster franchisees' balance sheets and enhance their adaptive strategies. In these challenging times, third-party advisors can offer crucial support in negotiating with franchisors, landlords, and lenders. They bring credibility, objectivity, and professionalism to the table, which can result in lower interest rates and more favorable terms. It's time for multi unit restaurant chains to reboot their balance sheets and adapt to the "new normal". Remember, a restaurant that might have been successful yesterday may not be successful today. What innovative strategies have you seen restaurants adopt to survive and thrive in this changed landscape? #RestaurantIndustry #BusinessStrategy #FinancialManagement #BusinessAdaptation