Most of the time I link to discussion groups to point out the mistakes in people’s thinking. But this discussion is actually a very informative, fact based exchange.
The “opportunity” to buy a failing business on the cheap is pursued by a lot of first time business buyers. Usually it is a mistake. The discussion linked to here goes into some pretty good detail about how to value a business that is losing money – very informative for those of you inclined to buy a business that is losing money.
The unique thing about this example is the restaurant in question is a corporate-owned location and the buyer is the manager. She would buy this existing unit instead of buying a brand new franchise. The question that I have is this: If the parent company can’t make this location work, what chance does a first time franchise owner have? Let me know what you think.