Originally posted by Baah Ben
Moral of the story..Never finance the sale of your restaurant or too many times you most likely will be taking it back.
That is wise advice, unless the buyer is a Korean.
Flush with cash from my vertically integrated printing, design, and advertising businesses in 1992 I tried a semi-absentee (first mistake) venture in the food biz - a little-known fast food franchise. I was in it for $120K cash and a corporate signature for another $170K, primarily equipment and additional build-out.
I did $27K/week for the first year, $22K for the second, and was hovering near $20K when I unloaded that nightmare. Even at $20K/week the pro-formas
told me I should be dragging $2-3k/week, but neither the franchisor "experts" nor I could ever overcome the fact that actual food cost was 41% when it should have been 28%. (Restaurant professionals are crying with laughter by now).
Koreans to the rescue!
They assumed the remaining debt (somehow they saw 30 of 60 lease payments having been made on 2 1/2 year restaurant equipment as having "equity"), paid $200K cash (which would have been more than enough for me
proffered a 10 year/10% note for $300K. I sold. And each payment on that note was received timely and in full by me.
After I sold I noticed that the workforce remained "indiginous personnel", but only Koreans handled cash, went to the freezer, received deliveries, or took out the trash.
Over the years I realized what a wise "investment" it was for the church of my youth in Washington, PA: Second Presbyterian (which became Church of the Covenant circa
1960) to have alone sponsored three Missionary Families in Korea back in the 1950's.