Ready To Sell? Maybe You Should Be

Are you ready to unlock the real secret to building wealth in the restaurant industry? It’s probably not what you think, and it might even be easier than what you’re doing now.

Every story deserves an unforgettable ending. In 2018, I opened a self-serve tap house and sports bar called Auggie’s Draft Room. Of all the concepts I’ve brought to life, this one stands out as my most successful. But here’s the twist: its success didn’t come from a perfect concept, prime location, or impeccable timing. Quite the opposite. In our first six months, we barely grossed $200,000 in revenue.

Fast forward to December 2024, and Auggie’s grossed over $300,000 in a single month. This transformation wasn’t luck. It was the result of decades of lessons learned, strategies honed, and unwavering determination. Auggie’s became more than just a success story; it became the centerpiece of my book, Drafting a Dream. In its pages, I share every tool an aspiring restaurateur needs to develop, open, and thrive with their own concept. From struggling to soaring, Auggie’s Draft Room is living proof of what’s possible when you commit to turning dreams into reality. The book’s success, becoming an Amazon bestseller, reinforced the power of these lessons.

To everyone who’s read my book, first, let me thank you for joining me on this journey. Second, I have a confession. I didn’t know it at the time, but I left something out. One critical chapter that could hold the key to unlocking true wealth in this industry. Consider this your director’s cut, the final piece of the puzzle that didn’t make it into the original book. It’s not just another chapter; it’s the most important lesson I’ve learned in my career. And now, I’m sharing it with you.

Chapter XIV: Drafting A Dream – Plan Your Exit Before You Begin

In the 90s, I created a concept called Dominic’s of New York. It was so well received that I ended up franchising it. One of my franchisees, Vincent Russo, taught me a lesson that changed the way I look at the restaurant industry. While most Dominic’s operators, including me, were focused on the day-to-day challenges of running and building successful restaurants, Vincent made millions of dollars operating just one location. On top of that, he had enough free time to take vacations most of us could only dream about. Vincent cracked the code.

He recognized something most of us miss; burnout is a real problem in the restaurant business. Sure, we all keep our excitement levels high when we first open, but over time, seasonality, employee issues, and the realization that weekends and evenings will never be yours start to chip away at that excitement. This business is mentally draining. While rewarding at times, it often feels like a never stopping freight train of challenges that only you can overcome. You need to be present, mentally and physically, or your restaurant will suffer.

Success in the restaurant industry isn’t just about serving great food or building a loyal customer base. It’s about having the vision to know when to move forward.

The truth is most operators fall into the trap of thinking they’ll be the exception, that their restaurant will create generational wealth like Antoine’s in New Orleans or Columbia Restaurant in Tampa Bay. Statistically, that’s not the case. According to a study by owner.com, 65.4 percent of restaurants close within the first 10 years. Of those that survive, few original owners are still running these restaurants a decade later. In fact, over my career, I’ve worked with thousands of operators, and I can count on one hand how many of those operators stayed with their businesses for a decade. Vincent Russo saw these facts and used them to enrich his family.

There is no shortage of wide-eyed, aspiring restaurant entrepreneurs, but there is a major shortage of operators who can take a start-up concept and turn it into a long-term success. Vincent Russo recognized this, along with his own limitations. He knew he was a great operator, but he also knew the importance of having an exit strategy.

Vincent’s approach was simple yet brilliant. He would find failing restaurants, buy them at little to no cost, and invest the necessary time and capital to turn them around. This required immense effort and dedication. He implemented systems, processes, and checklists, often living at his new restaurant for six to seven months. By then, he had a well-oiled, cash-flowing operation that he could sell at a premium.

There are always aspiring entrepreneurs eager to buy a successful restaurant, and banks are often willing to fund such ventures. Vincent would sell, take a few months off, and then repeat the process. His ability to execute this strategy came from a deep understanding of the business, relentless hard work, and a clear vision of his exit plan.

The lesson here is simple: Plan your exit before you begin.

Before Auggie’s Draft Room had its grand opening, everything I did including every process, system, and checklist I created was to create a business system that I could easily sell at a future date. Even the menu I created was designed to be simple so that a future, less experienced owner would never have to be under the thumb of a high-end, temperamental chef. In February of 2025, after an amazing six-year run, Auggie’s Draft Room sold to a wonderful, well-qualified family who had dreamed of owning and operating a restaurant most of their lives. And I can say with the utmost confidence that while nothing is guaranteed in this industry, they are walking into a great situation, and I wish them nothing less than years of success. If you are ever in Saint Augustine, Florida, take a moment to visit them.

I hope I’ve convinced a number of you that you need to start planning your exit strategy. If so, you will fall into three categories. You are an aspiring restaurant operator ready to take the plunge, you already have a successful restaurant, or you are at your wit’s end and need to get out. Interestingly enough, the answer is the same for all three of you; it’s just the level of work that you need to put into your business that differs to make this a reality.

10-Step Guide on How to Get Your Business Ready to Sell

Let’s go into a 10-step guide on how to get your business ready to sell. Everything in this list will not only position your business for sale, but it will also improve your restaurant’s sales as a bonus.

Here is the great news, especially for those who own a failing restaurant. Take a page out of Vincent Russo’s playbook and muster the excitement and energy for the next six to eight months. I know it will not be easy. Many of you feel beat up and maybe even lost, but I am here to tell you that it can be done. There is a light at the end of the tunnel if you have six to eight months left in you. It will take effort, but at the end of the day, it is only the equivalent of a baseball season.

Let’s get started.

1. Create a Win for Both Sides: It needs to be a win-win for you and the buyer. Everyone wants to sell when their business is failing. The problem is no one wants to buy your failing business. You need to set the buyer up with the greatest possibility of success. While nothing is guaranteed in this industry, you will get the most interest in your business if you have a successful business system in place. I know that is easier said than done, but again, if you can muster the correct mindset for six to eight months, you can do this.

2. Build Social Media Presence: As soon as you start to advertise your business is up for sale, the first thing a potential buyer will do is Google your restaurant. You need to have a long-standing social media presence. In Chapter XII, we talk about how to create an environment to entice our customers to take to social media and promote our restaurant. I also want you to create three posts a week with pictures for Facebook and Instagram. I don’t care how many followers you have; the goal is to start gaining social media presence. If you are new to social media, just download ChatGPT (the free version) and ask it to create your posts for you.

3. Simplify Your Business: Revisit my Rule #3, "The Simple Foundation", it talks about simplifying your restaurant processes and creating an environment of always serving your food fast, consistent, hot, and all together. By creating a simple foundation, a potential buyer will feel less intimidated by your operations and feel they can actually run this restaurant. Again, this will increase the interest in your restaurant.

4. Document Systems, Processes, and Checklists: I’m pretty sure I’ve mentioned systems, processes, and checklists in every chapter of this book. To say they are important is an understatement. If you want to be attractive to a buyer, you need to be able to hand over a complete business system to the buyer. Everything needs to be documented and turned into a system, process, and checklist.

5. Control Costs: You must get your labor cost under 22 percent and your food cost under 30 percent. I know this may be difficult for many of you. Refer back to Rule #11, "Control Your Controllable Costs." If you have not read my book, there are lots of resources available to help you through this. This is critical.

6. Negotiate a Ten-Year Lease: If you are not sitting on a lease longer than 10 years, go visit your landlord. Tell them you are thinking about selling and want to know if they would offer the incoming buyer a 10-year lease. That will open up SBA financing for the buyer and make your business more attractive to sell.

7. Create a Showpiece: Begin implementing standards at least six months before putting your business up for sale. Focus on areas like uniforms, necessary repairs, and maintaining cleanliness. Starting early ensures these improvements feel natural and established, rather than rushed, which makes a stronger impression on potential buyers.

8. Clean Financial Records: You need to have impeccably clean records. First, if you are skimming some cash off the top, you need to stop now. All the money needs to hit the bank account. For every dollar that hits the account now, you may get back four dollars in return upon the sale. Also, you don’t want to create any type of "claw back" when explaining your financials. A "claw back" is what we refer to as either non-recurring expenses or owner benefit expenses like paying for your family’s cell bill. Your records need to be clean and perfectly align with your bank statements.

9. Estimate Your Restaurant’s Value Realistically: This is always a hard conversation for me to have with clients because your business may not be worth what you think it is. If your business is not profitable, its value will likely be limited to the value of the lease and perhaps 10% of what you spent on the equipment. Build-out costs, time, and goodwill unfortunately hold little to no value if the business is failing.

For profitable businesses, the valuation typically ranges between 4 to 4.5 times your net Income Before Interest, Depreciation, and Amortization (IBIDA), assuming a 10-year lease. Lease length plays a significant role in valuation. For every year less than a 10-year lease, the value decreases by 10%, and for every year beyond 10 years, it increases by 10%. This valuation also assumes you have a single location without the infrastructure to manage or scale multiple units.

10. Reignite Your Spark: This final step is not for those just starting out or already thriving. It’s for the operators who are struggling, who feel the weight of failure, and who have lost the passion that once fueled their dreams. To turn things around, you need to rediscover that initial excitement and channel it into a new purpose-building an exit strategy that can reshape your future.

Over the next six to eight months, commit fully to your restaurant. Immerse yourself in the day-to-day operations with fresh eyes and a renewed sense of purpose. By shifting your mindset to focus on preparing for a successful exit, you’ll unlock a new type of energy. This clarity and drive can not only help you transform your business but also create a brighter path for you and your family.

I had no intention of selling Auggie’s Draft Room when I did. My buddy sold his cigar shop a few stores away, and I was attending his going-away party. His broker approached me and mentioned he’d received inquiries about Auggie’s and would love to sell it. I wasn’t convinced he was being entirely truthful, but I took his card anyway and discussed it with my family. As I’ve mentioned, burnout is real, and we were feeling it. We decided it was time. After entering into a contract with the broker, the ad went live a few days later. By the end of the first day, we had three full price offers.

Success in the restaurant industry isn’t just about serving great food or building a loyal customer base. It’s about having the vision to know when to move forward. Creating and executing an exit strategy takes effort, focus, and determination, but the rewards can be life changing. Take that next step and approach your future with confidence. The road to a successful sale may be challenging, but with the right mindset, it’s absolutely achievable.

You’ve got this. Remember, the end of one chapter isn’t just an ending; it’s the opportunity to start something extraordinary. Your journey continues, and the next step is yours to take.