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  1. #1
    Senior Member
    Join Date
    Mar 2007
    Location
    Atlantic City, NJ
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    382

    Buying an existing luncheonette...

    In my never ending quest to find just the right spot, I came across a little coffee shop (as in greasy spoon) for sale. Its a popular, local place and I know they are busy and do well. The asking price is reasonable and they also just got approvals for an expansion. The reason they are selling is that the mother is in her late 70's and the one son was just diagnosed with cancer (just after they got the expansion approvals), so they decided not to keep the business. I feel bad for them because they really are good people.

    I know that its a good idea to buy an existing place. But would this kind of place be a good idea for me to "convert" into a coffee roasting/retailing location?

    What about existing customers, those who would want omelettes that I don't have? How do I overcome that?

    PLEASE share ALL of your thoughts.
    AJPratt
    Pratt's Hill of Beans

    "Don't laugh at the coffee. Someday you may be old and weak, too."

  2. #2
    Senior Member
    Join Date
    Aug 2006
    Location
    Columbus, OH
    Posts
    108
    Anne,
    If I were you, I would let this location pass. Greasy spoon customers are NOT your customers. If you are not willing to offer the same fare that was previously offered, the existing customer base will not return. If the current owners would be willing to sell you equipment only, not goodwill, it may be a good deal. If the current owners have a good business going, they would be foolish to lower the selling price to not include goodwill. After reading all your posts, I believe that you want to roast select grade Arabica beans and run a high end coffee house. Look for a good location that will complement your business plan.

  3. #3
    Senior Member
    Join Date
    Jan 2007
    Location
    Salt Lake City
    Posts
    1,044
    I wouldn't "buy the business" if it is a greasy spoon, and, judging from your posts and insightful questions, you are aiming for an above average to very good quality coffee shop. To me, the business is of no value. If they want out, they can sell their equipment on their own, and you can take over/re-negotiate their existing lease. If the purchase is for the actual real estate, then purchase real estate only, not much else is of value.

    Don't do what's easy, do what's right for you concept wise, and business wise. Don't do this particular thing just so you can open your place-- if it's not right, don't do it.

    As an example-- We have been looking for space in our downtown area to do a second project, now there have been 40-50 locations available in the past year we've been looking. Only five met our criteria for size, and only 2 met our criteria for location. Neither deal was right for us, and despite other offers and locations opening up, they are not suited for our needs... and this can be as "simple" as being 1/2 block in the wrong direction. So we have a couple of spaces we have pegged that have existing businesses that are doomed to fail. We are patient. Impatience leads to failure, but so does inability to seize the right opportunity. Be wise, be patient, think with your head, and ignore any emotional attachments to 'space' or (future) 'business'.

    My cent.
    John Piquet
    caffe d'bolla
    Salt Lake City, UT
    caffedbolla.com

  4. #4
    Senior Member
    Join Date
    Mar 2007
    Location
    Atlantic City, NJ
    Posts
    382
    Thanks all. It would actually be the land, building, business, and equipment, but I am also worried about the customer base. Hey, I know a trucker would truly enjoy a good latte as much as the next person, but they aren't a likely customer.

    Another place I just learned about... There is a new shopping center a couple of towns over (about 15 minutes from my home). Part of it is done (the strip behind us)... but there are two pad sites left. The guy was thrilled when I called because he had been talking to Dunkin Donuts but the guy he was talking to was dragging his feet (or something to that affect). One pad site is 2500 sq ft and comes with a drive thru (mine!) and the other would be for Saladworks. In the shopping center strip behind us there is a restuarant, a Subway, nail salon, and some other businesses. Across the one street is a hospital and across the other is a three story building with Doctor's offices. Behind the center is the township municipal building. The property guy said that it would be done by second quarter next year. He thinks it would be done sooner because they are getting their permit approvals now, but said 2nd quarter to be on the safe side. I am very excited about this one, but I don't want to get ahead of myself.
    AJPratt
    Pratt's Hill of Beans

    "Don't laugh at the coffee. Someday you may be old and weak, too."

  5. #5
    Senior Member
    Join Date
    Jan 2007
    Location
    Salt Lake City
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    1,044
    Most successful models are built on ~1200-1500 sq feet. Examine the size of a Starbucks sometime. Occasionally, they've done a lot of work for you, if you just know where to look. 2500 is too big. half that, and you may have a good one.

    Personally, I wouldn't do any coffee in a strip setting (some exceptions),
    and a big giant NO to the drivethru. Good coffee is not a convenience.
    John Piquet
    caffe d'bolla
    Salt Lake City, UT
    caffedbolla.com

  6. #6
    Senior Member
    Join Date
    Mar 2007
    Location
    Atlantic City, NJ
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    382
    I made a typo... Its approx 1000 sq ft. I thought I heard something about Starbucks doing drive thrus-- not that they are the standard for good coffee. LOL


    What do others think about a drive thru?
    AJPratt
    Pratt's Hill of Beans

    "Don't laugh at the coffee. Someday you may be old and weak, too."

  7. #7
    Senior Member
    Join Date
    Aug 2006
    Location
    Columbus, OH
    Posts
    108
    Anne,
    Doing the cafe and drive-thru at the same time is a bit tough! You may be smarter by doing one, the cafe first, learn the business and then tackle the drive-thru later.

    As you have read the different posts from the coffee guru's on this forum, even the equipment is different from cafe to drive-thru. If you can fill a 1000 square foot facility to capacity, 5 days a week, you will be ready to add a drive-thru.
    If you do not fill a 1000 square foot facility, you need to figure out why.

    Anyway, that is my 2 cents!!!

  8. #8
    Senior Member
    Join Date
    Mar 2007
    Location
    Atlantic City, NJ
    Posts
    382
    Jackson, you make a great point. I don't have to do it all right away. I would rather start with one, master it, and then expand when we are ready. When the building is constructed, it will have a drie thru. I can always open that later on.

    Also, since this won't be open until next year, I have plenty of time to carefully weigh what I want to (and will be able) to do.
    AJPratt
    Pratt's Hill of Beans

    "Don't laugh at the coffee. Someday you may be old and weak, too."

  9. #9
    Junior Member
    Join Date
    Mar 2007
    Location
    SC
    Posts
    13
    Glad to hear that advice. I am negotiating a corner space with the intent to open the cafe first, and have the capability to handle drive through business in the future if desired. I felt that trying to operate both sides right from the beginning was too much and planned to just start with cafe. Good to see confirmation.

  10. #10
    Senior Member
    Join Date
    Dec 2006
    Location
    Toronto
    Posts
    121

    drive through

    Just a note of counterpoint from the pro-drive through crowd.
    What is your customer base? Are you a destination cafe with seating service only? Do you offer take-out cups? Are you in a commuter destination, travel route or residential area? Do you ever have inclement weather? Does the driving traffic include a large percentage of mommy-vans?
    I think most operators wish they had spent more effort to design drive-through capability into their site selection, equipment selection, floor plan and start-up budget.
    Perhaps your design includes at least rough-in for expansion to drive through capability? Avoid re-modeling and re-positioning fixtures/equipment when opening drive through later. I think you can effectively open with drive-through, if you plan and design for it effectively. Search older postings - lots of other forum threads refer to drive-through.

 

 
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