Full Service Food Establishment – CK901 in Central Kansas

This franchise barbeque restaurant, located in north central Kansas, provides a great “turnkey” opportunity for a potential business owner to take over a well-established restaurant with lots of growth potential. With favorable online ratings and one of the best BBQ sauces in West of Kansas City, this BBQ restaurant and bar has been operating successfully for more than 6 years in the heart of the Kansas town it operates in. It is the only sit down restaurant that offers barbeque within 25+ miles of its location. This is a full service operation, offering not only BBQ/steak options for lunch and dinner, but also including a full service bar and catering options. It is a franchised operation which pays 4% on the sale of all food and soft drinks served. However the restaurant also holds a liquor license to sell beer, spirits, and wine along with merchandise under the company name which it pays no royalty. The current buildings that house this restaurant are capable of hosting up to 200 people. There are two adjacent but separate buildings include in this sale. The main building offers a full service bar, a full service kitchen, and the secondary building offers plenty of room to host large groups and crowded nights. Equipment included with the main building includes a large outside smoker, an inside electric smoker, a Hobart meat slicer, plentiful food storage areas with a walk in freezer , additional assortment of freezers and refrids, two fryers, a multi-purpose grill / flat top and range, conveyor and convection oven, alto-sham, tap beer system, beer coolers and mug freezers, a Pepsi product soft drink dispenser, a commercial grade iced tea brewer, a 20 foot exhaust hood with up-to-date Ansal fire system, various food preparation / storage racks, tables and shelving.. In addition, there is also plentiful seating both indoors (including a private back room) and outdoors on a large patio. The building next door which at one time functioned as a full end-to-end microbrewery has since been transformed into an event space that regularly hosts business groups and various gatherings. The brewery equipment is still intact and working and would be easy to resume operation if the new owner wishes to do so but is not included in this sale and would need to be negotiated separately. This restaurant is a popular location for local college students, recruits, and business people looking to host a large event and they also receive several referrals from hotels in the nearby area. Situated along a major interstate also results in a lot of pass through traffic from travelers frequenting the area. Core consumers are thus both travelers and the local population. The current owner and operator is looking at retiring to pursue other endeavors but is willing to stay on to help with the transfer of a new owner, including a seamless transition of the franchise. The current staff is made up of 20-25 regular employees, 8 working full time, the rest working part time to varying degrees depending on the season and hours worked. The current restaurant owner owns the buildings and land via a separate legal entity which is leased back to the business. Ideally all assets would transfer with the business through a purchase, lease-to-purchase or lease arrangement – buildings and land are to go with the business. The current owner believes that there is large growth potential in an increase in things like catering, lunch sales, to-go sales, and delivery and the microbrewery option may also attract more customers as well as provide an extra revenue stream. Revenue is currently derived from the sale of food (77%), the sale of soft drinks (5%) both of which incur a 4% royalty per the franchise agreement. The remaining gross sales come from beer (11%), wine and other liquor sales (6%), and a small amount from merchandise. Over the past five years, the business has been consistently cash flow positive with gross income hovering around $800K, currently $825K (2014). Operating profit / income is currently about $70K, representing a profit margin of roughly 9% (better than industry averages). Annual discretionary cash flow earnings to new owners, i.e. adjusted EBITDA, is estimated to be more than $150K, sufficient cash flow to a new owner to service any debt financing and receive a decent salary. The estimated value range or asking price of this business is between $215K - $345K (excluding cash, receivables, inventory, liabilities and facilities).

* Adjusted EBITDA = EBIT plus Depreciation and Adjustments (excluding Owners compensation)

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If you are interested in any of these offers or would like more information about the program or process, please contact Denton Zeeman at 785-864-8863, dentonz@ku.edu, or redtire@ku.edu.

 

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