Legal Question in Business Law in California

Re: Buying an existing restaurant business

As the other attorney have made clear, this is not the place for this kind of advice.

Feel free to email me, so we can see if we are a good fit for each other.

Here are the real basics:

Make sure you know exactly what you are buying -- and what you are not buying.

Make sure you know exactly what you are paying, and how you are paying it.

Make sure that the seller can actually sell what you are buying, and that you can actually buy it.

Re: Buying an existing restaurant business

Yeah, nice try, but no brass ring. You already know that you need experienced counsel, so why are you seeking anonymous advice here? For starters, you don't get 'legal advice' here, only hints and tips to point you in the right direction. I don't get restaurant meals for free just for asking, anymore than you will get real legal advice for free here or elsewhere. Even if you did, it certainly wouldn't be anything you should use to business make decisions that have serious consequences. To get what you want, you're going to pay experienced counsel to provide, along with his specific help and guidance after he has fully reviewed your situation. It's just a cost of doing business, that legitimate businesses plan for because they know it is necessary. A little money for advice and guidance now, rather than a lot of money later in litigation or mistakes that could have been avoided. Now, if you are serious about getting legal help, and you're in SoCal, feel free to contact me.

Re: Buying an existing restaurant business

You mean summarize all of business law, and real estate law, and all that I have learned through years of law practice including every issue that I have come across in buying or selling a restaurant, and every issue I have come across in litigating restaurant purchase disputes? Nice try. The issues will be specific to your business and restaurant. You may contact me if you want me to take a look at your case. I may have a few words of wisdom.

Best,

Daniel Bakondi, Esq.

IMPORTANT:

No attorney-client nor confidential relationship is created through this communication. You may not rely in any way on this communication, and nothing herein constitutes legal advice nor legal opinion. Your issue may be time sensitive and may result in loss of rights if you do not obtain an attorney immediately.

Re: Buying an existing restaurant business

Since buying a business can become pretty complex, the LawGuru forum does not really itself to giving any sort of reasonable overview of the business-sale process in a short answer.

I have an FAQ on my website at http://grellas.com/faq_small_business_007.html entitled "What are some of the basic legal factors to consider in selling or buying a small business?" You might find this helpful as a general overview of the process.

Costs can go all over the board, depending on the size and complexity of the transaction. The buyer's attorney is the one who needs to be most careful about getting the right kinds of representations and warranties in the deal and about making sure proper conditions are in place so that the deal closes only when you can be assured of getting what you thinking you are getting in the sale.

In my experience, an average range for a small business asset sale without special tax considerations and without creditor problems might be in the 2% to 5% of the sales price range - but this really can all over the board, depending on particulars. This would include attorneys' fees, escrow costs, and CPA fees. The cost would go up even more if you have to pay broker fees.

I would say the thing to be most concerned about in today's distressed environment is that the deal is clean and that the sale is not being done because of a collapsing business (the latter type of sale has endless complications and is usually best avoided in all circumstances). Due diligence is hence particularly important in deals done today.

I hope these general considerations are helpful. Details should be discussed with your lawyer.

Re: Buying an existing restaurant business

The problem in giving you a straightforward answer is that experienced attorneys ask questions and redirect their due diligence in response to subtle clues about possible problems in a deal. There are business-acquisition due-diligence checklists in paperback self-help law books on starting or buying a business that you can resuse in larger bookstores, or buy from Amazon. I have even found and used checklists for business-acquisition due diligence on line. However, ultimately, rooting out problems in a proposed business acquisition depends upon the combined skill of the buyer, his attorney, and his accountant. Last time I was thinking of buying a restaurant, I asked a fairly famous chef what I should know before buying. He laughed and told me I needed to start out as a dishwasher and move up to line cook before I could begin to understand the answers, much less ask the questions.