Puzzle pieces that a Specialised Hospitality and Restaurant Broker will have to paste together – Part 3

The Food and Beverage Stock.

Saleable stock is the food products and alcohol products, that the buyer will have on hand when the handover closes. If the buyer is buying a going-concern business, the buyer will most likely want to keep the existing saleable stock at the close of the handover.

Wiki, the definition of a going concern:  “A going concern is a business that is assumed will meet its financial obligations when they fall due. It functions without the threat of liquidation for the foreseeable future, which is usually regarded as at least the next 12 months or the specified accounting period”.

There will be a not-to-exceed amount for the saleable inventory agreed to when the purchase contract is executed. Just before the close of handover, the buyer and seller will take a physical count of the saleable stock. Then the stock value is computed at the seller’s cost, which is paid for at the close of the handover, in addition to the purchase price. In some cases, the saleable stock is negotiated at a maximum/minimum amount and is included in the purchase price. 

If the business is being sold as an assets based transaction, there is a strong possibility that the buyer will not want the saleable stock because he is putting a new menu in place, or perhaps he wants to purchase only a portion of the saleable stock, which will most likely include the alcoholic beverages.

 The broker will oversee this whole process to make sure the buyer and seller are handling the stock transfer and takeover on a reasonable basis.

Consumables.

• Paper and stationery supplies.
• Cleaning supplies.
• Toilet Paper.
• Ink and till rolls.
• Packaging.
• Clothing.
• Health and Safety.
• Personal Protective Equipment.

Deposits.

Chemical containers and oil buckets, some supplier containers or crates carry quite a large deposit value. Milk crates deposits are up to R85.00 depending on your supplier.

Gas Cylinder Deposits and LP gas.

There are:

• LP gas cylinders.
• CO2 cylinders.
• Mixed gas cylinders for beverages.

If missed this could be a costly glitch on the seller’s behalf. The deposit only on one LPG cylinder that is empty can be up to R1300.00 depending on the type and you’re on your supplier.