Posted on: 28 January 2016Share
One of the most lucrative industries you can choose to venture into is the bar and restaurant business. However, not everyone who starts his or her own pub is guaranteed to have success. The decisions you make in the beginning could make or break your hospitality career. Therefore, if you have chosen to acquire a pub for sale, there are a few things that you would need to keep in mind.
Establish whether you will buy the assets or the entire company
When considering a pub for sale, you could opt to either acquire it in the form of an asset sale or buy it as a business entity. Both options come with their own set of pros and cons. If you choose to buy the pub as an asset sale, then you are free from any liabilities that the previous owners may have. This is unless you stipulate in the contract that you are willing to assume these liabilities.
On the other hand, if you purchase the pub as a business entity in which you become the legal owner of the company name, then the seller's liabilities automatically fall onto your shoulders. The benefit of choosing this option though is that you do not have to start from scratch when applying for licenses as the previous licenses will still be valid. Weighing the various pros and cons of the two different options will enable you to better discern what would be the most financially viable step forward for your individual needs.
Establish the different assets that will be included in the sale
Whether buying the business as an asset sale or as a company, you still need to establish what assets will be included in your purchase. A common misconception people make is that all the equipment that is in the pub automatically becomes the property of the buyer during an asset sale. The truth of the matter though is that a majority of pubs will lease large equipment rather than having to bear the brunt of investing in them. Some of the types of equipment that may be on lease include commercial dishwashers, point-of-sale systems, soda dispensers and more.
If you are interested in keeping the leased equipment, you need to establish whether the seller has the ability to transfer the lease to you or if you would have to draw up a new agreement with the service providers. Failure to establish these terms could lead you to lose some assets once you have finalised your purchase.