B.C. restaurants for sale: easy to find, but hard to keep

Based on one online listing of restaurants for sale in B.C.'s South Coast region, it seems a cinch to get into the commercial food industry.

Restaurant Business Broker lists 295 food-type businesses for sale, saying on its web site that, "No other business, save for the food manufacturing and processing industry, allows you to bring simple joy in the lives of your customers with mouth-watering fare."

The businesses on offer range from a $1.5 million, 163 seat restaurant in Squamish to a 16-seat coffee shop on Burrard Street in Vancouver selling for just under $30,000.

Restaurants on the list also include ones marketed as "unicorns" like one in East Vancouver priced at $989,000, "an undeniable chance at establishing a secure and lasting operation with the ability to deliver lasting profitability."

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70 per cent failure rate

But chasing that dream is not as easy as it may sound according to Ian Tostenson, the president and CEO of the B.C. Restaurant & Food Services Association.

Tostenson is not surprised by the number of restaurants for sale on the list, as he estimates there are approximately 6,000 restaurants in Metro Vancouver with 12,000 total across the province.

"You know having said that, I don't think that restaurants are that much of an easy sell." he said. "I mean there's a certain amount of expertise that you need to get into the restaurant business."

"A restaurant's casualty rate in its first year is about 70 per cent, and so it's high casualty," he warns.

Part of the challenge is the price to purchase an existing restaurant is often just the beginning.

New owners often have to get development permits to make changes, and renew liquor licenses and other permits that don't necessarily transfer over from the previous owner.

"You pretty much have to start from scratch," he says.

A general rule for running a restaurant is to spend 30 per cent of your budget on food, 30 per cent on labour and 10 per cent on liquor. Tostenson says the average return is less than four per cent after tax.

"It's complex to run a restaurant ... whether a little restaurant or a big restaurant, because it has so many moving parts."

Restaurant Business Broker lists burnout, failing business, and partnership disputes as reasons why owners end up selling.

To help out aspiring restaurateurs, the BCRFA worked with the provincial government for a year to develop a guide for people looking to get into the restaurant business and not become a statistic.