Local restaurant & real estate brokerage The Shumacher Group consistently has restaurants for sale in and around Atlanta and the southeast. Much of the time the restaurant's name or exact location are not disclosed, but sometimes they are. Below are four current listings for Atlanta area restaurants actively for sale and my take on each.
521 Kitchen & Que
This 2,500 square foot restaurant opened in late 2014 in place of the former Tin Drum in Wieuca-Roswell shopping center. Off the bat, the restaurant was competing for BBQ sales with The Greater Good BBQ, a Fellini's/La Fonda group restaurant located nearby. I live very close to this restaurant and only went once and left unimpressed. If you are a new concept competing against an established and well capitalized operator, you gotta set yourself apart by either offering a compelling value or superior food. In my opinion 521 offered neither.
The sales listing indicates that the restaurant includes seating for 70 with rent of $8,300 per month (all in). The lease has several years left on primary with 2-five year options to renew. The owners reportedly spent $300,000 to renovate and update the space. The BBQ smoker is not included in sale but could be purchased for an additional $16,000. "Sale does not include name or brand so no books and records other than lease, asset list, fixed costs and expenses will be provided."
Priced at $99,000
An independent franchise of the Tampa-based company, the Buckhead location in Chastain Square opened last summer in place of Chopstix/Scenario to the left of Publix. Even before it opened, I questioned the viability of another "better burger" joint in north Buckhead where Cheeseburger Bobby's and FLIP, among others, already exist. I rarely saw the restaurant busy, and although I live nearby, I only visited once. The food was good, not extraordinary, and did not leave me wanting to return any sooner than I would to any other place. Locally, the chain also has locations in Buford near the Mall of Georgia and in Johns Creek. A location on Scenic Highway in Snellville remains "temporarily closed" following a brief nearly 90 days in business earlier this spring. Another location is "coming soon" to Kennesaw Marketplace, while two others are in the works in Midtown and Sandy Springs.
The sales listing indicates that the roughly 3,100 square foot restaurant has seating for 100 and that restaurant's buildout cost over $750,000. The restaurant is signed to a ten year lease with an option to renew with monthly rent of $10,700 (all in). New owner would be able to either keep as is or convert to nearly any quick serve or casual restaurant not already present in the center.
Priced at $199,000
Momma Goldberg's Deli
Located in the street level retail of SkyHouse Midtown between West Peachtree and Spring Streets, the 2,250 square foot restaurant opened in early 2014. An independent franchise of the Gainesville, Florida-based business, the midtown location is off the beaten path and is the chain’s only location in metro Atlanta. While some might see this as making the location a destination for those who seek out the restaurant's food, I see it as a hindrance, and something that has surely negatively impacted its sales. Interestingly, although the company was founded in Auburn (in 1976), it's today based in Gainesville, Florida. A brief internet search shows that at least three locations of the chain have closed in Florida (Fort Walton Beach, Panama City & Tallahassee) leaving them with zero presence in their current home state.
Locally the restaurant's opening was met with tremendous enthusiasm from Auburn grads like PR maven Tori Allen and countless others eager for a taste of home to open in Atlanta. While having a cult-like following is great, it seems the restaurant failed to grow the following enough to sustain itself.
The sales listing indicates the restaurant has seating for 55 and that the owner is "breaking even" with "zero effort and no advertising." The restaurant was opened at a reported cost of nearly $400,000. The restaurant is currently signed to a "long term lease" at $4,500 per month (all in) with options to renew. New owner would be able to keep existing franchise or convert to any concept.
Priced at $69,000
South American Wood-Fire Grill Fuego Mundo is located in The Prado shopping center on Roswell Road in Sandy Springs. The nearly 2,500 square foot restaurant has seating for 80 (outdoor patio seating adds 20) and was opened in mid-2009. The full service restaurant features kosher South American fare and in accordance with the Atlanta Kosher Commission, is closed Friday night and all of Saturday. While operating fewer days than even Chick-fil-A, the restaurant seemed to do well with a heavy Jewish population nearby and others adopting a "kosher lifestyle" for its health benefits.
The sales listing indicates monthly rent of $9,500 (all in) with several years left on the lease with the option to renew. Opening costs for buildout and asset package came in at $600,000. 2015 gross sales were $1,078,517 with net profit of $216,775 after all expenses, and including $50,000 manager salary. New owner would be able to maintain current concept or convert the restaurant to nearly any other concept not already present in the center.
Priced at $476,000.
All four of these restaurants have their own set of challenges and while Fuego Mundo has one of the worst locations of the four, I think it stands the greatest chance of continuing a going concern. 521 Kitchen, Burger 21 and Momma Goldberg's are likely to be converted into other concepts. But what should they become? Countless concepts are canvassing metro Atlanta for new locations, but is a new concept in a bad location a good idea?
What do you think should replace any of these restaurants, or should they remain the same? Do you think a good concept can overcome a terrible location? What new restaurant with plans to enter/expand in the Atlanta market (i.e. Blaze Pizza, The Halal Guys, Salata, KEBA Sandwiches, Earl of Sandwch, Potbelly Sandwich Shop, Amsterdam Falafelshop, Garbanzo Mediterranean Grill etc.) are you most existed about?
Please share your thoughts below.