Economy, Restaurants and yard sales...

Uncertain economic times and Restaurant garage sales.The drought, Gas prices, Immigration and food production = sharp increase in food prices. While prices continue to rise, gas is heading towards 4.00 per gallon, food costs are going through the roof!
Anyone who is in the business, or goes to the grocery store is aware of rapidly increasing prices. Why are restaurants not raising their prices? Simple. There is a “down and dirty” method of pricing a lunch menu called the “Big Mac” Theory. If that sandwich fries and a drink cost 6.00, many individual restaurant owners try to price their lunch menu around that price since the average person expects to spend that amount or less on their lunch.

The problem with any menu pricing is that it is very difficult to increase prices across the board on a menu. Customers WILL notice this, and many will complain, and threaten to not come back. This is mind boggling to the business owner. How do the “big guys’ do it? They do not raise prices, they “introduce new products” (heard about all of the new “smaller portion” menus?) This is not because people want smaller portions, these portions are amounts that we should be eating anyway! This is about re-structuring a menu so an item can be re-introduced with a higher profit margin. This technique works well when you have research and development and a great marketing staff. How many restaurant owners here in Atlanta have these tools available to them? How many restaurant owners have the time to restructure the successful menu that has served them well for so long?

In my restaurant in Charlotte NC, I changed the structure of offering side dishes. I dropped the price of the item 25 cents, with less expensive options (at the time that was a salad, before lettuce went thru the roof!) and you could add the sides for one dollar. Thus an average increase of 75 cents on the item. This is an average. Some people just got the main item with no sides, however they were happy with the “new” value. Others did choose the sides, because fries for 1.00 more was a lot less than other restaurants were charging. There was now a new perception of “value” rather than having to deal with explaining why I increased the price of everything by 75 cents or 1 dollar. Customers are happy, I am happy with a slight increase in the items profit margin, and we can remain in a state of “ business as usual”.

Many restaurant owners who are not able to reorganize their menu pricing are finding themselves at the end of the road. Some are selling their business, others are closing their business and selling their equipment at “restaurant garage sales”. Everyone knows that used equipment is worth pennies on the dollar.

Many people seek our advice, since an operating restaurant has a value. Once you darken the doors of a restaurant, the value is negligible. No matter how difficult, keep the doors open and we find someone with a new concept to bring life to the business the restaurant owner spent so much time and energy to create!

Doug Marranci
404-892-4999
www.atlantarex.com
Atlanta Restaurant Exchange
1708 Peachtree St NW Ste 110
Atlanta GA 30309

Atlanta Restaurant Exchange - Restaurant Brokers

“For Immediate Release”
Marranci and Miller Open New Restaurant Brokerage Operation in Mid Town Atlanta.

Doug Marranci and Fred Miller are pleased to announce the opening of the offices of Atlanta Restaurant Exchange, a restaurant brokerage, at 1708 Peachtree Street, Suite 110, Atlanta, GA 30309 www.atlantarex.com

The company will work with restaurant owners who are transitioning; either expanding to a new location or selling their current location. In addition, Atlanta Restaurant Exchange will assist potential new restaurant owners to find locations in the Atlanta area.

The owners are using their experience in the industry to create a brokerage operation which brings a unique approach to the purchase and sale of restaurants in the Atlanta area. They will help restaurant owners recognize the full value of their businesses as going concerns. Atlanta Restaurant Exchange will seek to serve the middle market of the restaurant and food service industry. This is a market targeting smaller, independent businesses.

Fred Miller, CEO of Atlanta Restaurant Exchange has hands on experience with the Food Service Industry. He came from a family which for a generation was involved in the Industry. He understands the unique needs of the owner / operator. He also grasps the concerns of the purchaser of a restaurant operation. His unique insight comes from having owned two restaurant operations of his own. Most of Fred’s professional life has been involved in the analysis, financing and oversight of all types of small business concerns during his 35 years in the banking industry. He has been involved in the valuation and sale of hundreds of small concerns in the restaurant and other small business areas.

Doug Marranci, General Manager of Atlanta Restaurant Exchange has spent his entire life in the restaurant business. His parents before him were in the business, which is where he gained the huge store of knowledge he has of the industry. Doug has managed restaurants for others, mom and pop operations as well as those of major franchises. In addition he has owned several restaurants of his own. Doug has been involved in the sale of many restaurant properties as a representative of the seller and counselor to the purchaser.

Marranci’s vast experience in the food service industry makes him eminently qualified to advise others in the sale or purchase of any food service operation. He can match the buyer to a suitable property. At the same time he will expose a restaurant operation to a wide range of prequalified and likely prospects. This assures the client that his business will be presented fairly to the broadest number of serious purchasers possible.

It will be the mission of the company to assist the restaurant owner in finding a buyer for his business, with the goal of maximizing value (sales price) determined by a professional approach to analysis.