Confidentiality is extremely important in marketing a business for sale as it can be a very sensitive time to keep a business running smoothly prior to a transition. In dealing with a confidential sale, before I will give any buyer the name, address and financial information of the restaurant, bar and/or club for sale I do the following:
- Screen the Buyer– In screening a prospective buyer I ask the following questions: Are they in the restaurant business? If so what is their scope of experience – have they owned, managed and/or worked in a restaurant and for how long? What kind of restaurant have they been involved with, i.e. dinner house, cafe, coffee shop, ethnic or fast food restaurant? What size of restaurant have they been involved with, i.e. square footage and number of seats? What kind of restaurant are they looking for? Do they want to buy an ongoing successful operating restaurant or are they just looking for a fully equipped restaurant with a good location? Who are the decision makers? What is their time frame? What is their source of cash – their own savings, family loans, bank loans, etc.? When will the cash be available and where is the cash? How is their credit and what is their financial situation? (All landlords are going to require the buyers current credit history, personal financial situation and most recent tax returns as well as their resume and business plan).
- Have the Buyer Sign a Confidentiality Statement – Once the prospective buyer answers the above questions appropriately and I am convinced that he/she is a sincere buyer I will have him/her sign a confidentiality statement which says the buyer will keep the information (name, address, financial information, etc.) delivered to him/her confidential. Additionally the buyer is instructed to act as a regular customer when he/she goes into the restaurant and not snoop around.