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Opportunities

Thriving Upscale Restaurant with Passive Ownership

$5M in Revenue in 2021!

CASH FLOW
$785,573

Specifications

  • Cash Flow
    $785,573

  • Revenue
    $5,012,374

  • Price
    $2,590,000

  • Location
    Mechanicsburg, PA

  • Service Area
    Harrisburg Metro Area

  • Employees
    50; 30 servers (15 FT); 18 kitchen staff (15 FT); 1 FT GM; 1 FT Kitchen Manager

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 StatementP&L Statement
Jan-Nov 2021
Tax ReturnTax ReturnNotes
202120202019
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$36,3132021 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$39,750Son
Wage $39,069$29,800$31,800Wife
Personal Vehicle Lease$5,442$5,937$0Ford Lease $494.79/month
Personal Vehicle Lease$5,235$5,711$0GM 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 Margin15.67 %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

Purchase Price:

$2,590,000

$
%
OR
$
%
OR
$
Years
%

Bank Loan Needed: $

Years
%
$
$
$
$
$

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: %

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The Firm makes no warranties or representation in consideration to the information provided above. All communication regarding this business must occur directly with The Firm Advisors, LLC. The Firm is not a real estate brokerage and does not sell real estate. The Firm solely advises on exit strategy.