Jose and Ana (buyers) purchased a restaurant. Jose and Ana are a young immigrant couple that has worked extremely hard and saved their hard earn money for a down payment to purchase a restaurant. They were inexperienced and had never made a purchase of this magnitude, neither they have ever owned any restaurant business. The couple did not do any research as to the financial status of the business or any appraisal to determine what the actual value of the business was. Jose and Ana went to a Notario, who is not an attorney or have a license to practice law, who drafted a purchase and sale contract that he obtained from the internet. Jose and Ana purchased the restaurant. The total purchase of the business was $150,000. Jose and Ana put a down payment of 75,000 and the rest was secured by note to be paid in 6 months after the purchase. Jose and Ana took over the business and it was barely making to pay the bills even thou they were working over 50 hours each to make the business run. The previous owner of the restaurant misrepresented the finances by making it look like the restaurant was making more money than it was, and it sold the restaurant at a high value. Clearly, Jose and Ana overpaid for this business. Now, Jose and Ana could not afford to pay for the note they have signed the Seller. Jose and Ana received various threats from the Seller about taking over the business if the payment was not made by the due date. Our office helped them with planning a strategy to negotiate with the Seller.
The problem with the case is that Jose and Ana did not perform any due diligence before purchasing a large asset such as a restaurant. The couple also hired someone inexperienced and non-attorney to draft a legal contract which did not protect them. Our office work with a team of marketers, appraisal and industry consultants that can help you prepare when you are purchasing a business. We take care of the negotiation, appraisal, marketing, and business evaluation.
DISCLAIMER: The names, locations, and some of the facts were changed to protect the privacy of individuals. Past approval or successful negotiations of a case is not a guarantee or prediction regarding the outcome of future cases. Case results depend upon a variety of factors unique to each case. The above case studies are based on real clients. The names and locations were changed to protect their identities.