Vapulah

The business has been operated by the vendors for two years of a ten years lease agreement: three to rent renegotiation, then two years for each review. Agreement has been reached with the building owners that the present rent will be maintained through five years i.e. FOODAWAY will have the same rent for three years after occupancy.

Equipment for hot food preparation, grills and fryers, is available at the location and is part of the purchase price. The roast chicken ovens must be installed and are noted in the financial investment forecast.

As expected the cost of goods i.e. food and stock including consumables has been and should continue to be no more than 1/3 of the price of the items sold. Example: a regular hamburger priced at $1.50 will have a food purchase cost $0.50 given careful buying and stocking items such as cold drinks are simply re sold and will have a lower profit, but there is no labor involved. A separate direct cost will be the need for a small pick up and delivery van with normal regular operating costs.

The accounts of the present business have been examined by an accountant and are satisfactory. A purchase price of $95,000 for the business includes the equipment ($40,000), goodwill ($45,000) and lease registration for the present three years period ($10,000). The accountant advises that the price is fair considering that there have been only two years of business and the location has good opportunity for development. Unless considerable re-zoning change occurs in the area, the location should be secure for the balance of the 10 year leaser’s agreement.

Payment of the business purchase price is based on $25,000 that has been saved by the Rossi’s and $15,000 from each of the families as non-returnable loan.