Through all of restaurant shut downs, capacity limits, and all the ups and downs that came during the past 2(ish) years, our local restaurants fared well considering the national average. As I’ve said in countless interviews on the subject, a lot of the reason why this was the case is due to Little Rock being mostly a owner/operator, single unit food scene. Quite simply, the restaurant owners here are close to their business and more willing to ride out the storm rather than cut their losses and move on like many multi-unit owners in larger cities. Our local owners, for the most part, worked harder in their own restaurants, tapped into their own savings, cut their own profit, and took any necessary steps to keep the businesses going and as many people employed as possible.
While we saw very few closures locally, it did take a toll on many owners, especially ones closer to retirement. Now that sales numbers are beginning to come back closer to pre-COVID numbers, many owners are thinking about selling their restaurant businesses and taking a much needed rest after the chaos of the last couple of years.
I started working commercial real estate last year and have handled business brokerage (buying and selling of businesses) for much longer than that, the recent uptick of business listings represents the largest surge I’ve seen. There are a lot of great opportunities for anyone wanting to get into restaurants (or grow their existing operation) thanks to a combination of low sales numbers during COVID driving down valuations and current owner’s willingness to move on.
Out of the five listings I am currently representing, 4 of them are active restaurants in the Little Rock market, all looking to sell their business confidentially. Of those, 2 are long standing restaurants opened over 40 years that are owners wanting to retire. Another 2 relatively new restaurants that have each won multiple awards and show huge promise, however in each situation they have owners needing to focus on other business interests.
“I’ve toyed with the idea of retirement for the past 10 years,” one confidential business owner says. “I was ready until we hit the initial COVID shutdown, it put all my plans on hold then. Now that we are back up to pre-COVID numbers I am ready to move on.”
Not all the restaurants we are working to sell lost money during COVID. One business that has been around for 60+ years actually grew 6% each year during COVID and recorded strong profit numbers for the owners. Instead working hard during the pandemic helped them decide to move on to a slower lifestyle.
Many of our newer restaurant owners who are now looking to sell initially opened as a way to diversify their existing business interests, after spending more time during COVID with the restaurants than anticipated are looking to return to their previous business commitments.
“For me, I always wanted to own a restaurant,” another confidential owner says. “It helped me scratch that itch. We did good things, actually won a few awards, but I’ve got to shift my focus back to my other businesses.”
In both cases with the newer restaurants, the owners are looking to simply get the startup cost they put into the restaurant back out, opening up a huge opportunity for an established turnkey operation for an interested buyer.
I fully expect to see this shift continue of restaurants and businesses changing hands post COVID as more and more businesses begin to come back. There is less risk in many of these as well for potential business owners. The operating costs is already determined, they have name recognition and existing customers, and most are already showing a profit day one for a potential owner.
