Hotel Hacks

Clint Jhonson asked:


Toronto is gifted with a historical charm that may stand out in front of every visitor who is interested in visiting this city; this city is a veritable example when it comes to the entire country because it can also provide every visitor with a tasty experience. The Toronto Restaurant is famous for its excellent menu because people can actually find the best menus in Canada here. The Toronto Restaurant is marked with class and elegance and all the restaurants have exquisite interiors; delectable food will also be provided in order to tantalize the customer’s taste buds.

Every individual who is keen on visiting the Restaurants Toronto will also observe the amazing locations that are used in the case of these restaurants. The restaurants are usually located amid some beautiful surroundings and they are likely to offer the best when it comes to enjoying the culinary arts. But the visitor should also be aware that these restaurants are quite pricey and they are not likely to address all types of wallets.

But the positive aspect resides in the fact that you can actually adapt your dining experience to your current budget by visiting the restaurant websites; you can browse the internet in order to take a closer look to all the menus that are provide by each of the Restaurants Toronto. The websites have been designed in order to showcase the culinary delights and specialties but it is also advisable for you to check the availability of the seats in order not to waste your time planning to have a dinner in one of these restaurants.

The seat availability is always to be checked and you will have to make prior reservation is order to enjoy future dinners especially if the chosen restaurant is a famous one. The prior reservations are to be made in order to avoid waiting for available seats in these restaurants; you have to be perfectly aware that the Toronto Restaurant is one of the main attractions when it comes to the foreign visitors and you will have to make sure that you are going to dine in your favorite restaurant.

The restaurants in Toronto are usually classified according to the specialties they provide to their clients; the restaurants can actually be specialized in national food or foreign cuisine and even seafood and fish may be served in these restaurants because they are regarded as a true delicacy when prepared in the proper manner in order to delight your taste buds. You may even enjoy the traditional restaurants that may provide you with home cooked food especially if you are interested in discovering the Canadian national cuisine. Usually, the traditional restaurants are family-run businesses and they are also likely to provide the visitor with traditional dishes besides the exotic meals that belong to a particular cuisine.

Toronto is quite an expensive place but it is worth the effort to come and visit it; still, you have to eat in the Restaurants Toronto because you are going to experience a tasty sensation when choosing one of the famous restaurants that are to be found here. Modern cuisine together with the more traditional one is to be found here and when you are planning your future vacation in Toronto, you should not forget about having a fine dining. Fine dining is actually a major part when it comes to spending your holiday in Toronto and if you do not know which restaurant is likely to satisfy your culinary needs, you may ask the locals in order to find out more information.

The best information can be provided by the locals or by the special websites that have been designed in order to warn you about some aspects such as the fact that you must be pretty careful when choosing a restaurant in Toronto; for instance, some of the locals may be paid in order to advertise some of the restaurants and you will have to make sure you are going to make the right decision. Therefore, you must go and look around whenever you are planning to dine at the restaurant.

Another aspect to be considered when planning to dine in the Restaurants Toronto is that you may actually need a special outfit in order to be allowed to enter some of these restaurants; for instance, if the chosen restaurant is in a tourist area, you have to be aware that casual dress is going to be needed. But if you are in the private clubs, restaurants or business areas, you may think about wearing some formal dress. If you are not totally sure about the dress you should wear at a particular restaurant, you may make a phone call in order to be sure about the conditions that are implied by the chosen restaurant.

Cesare Carbonchi asked:


What a nice restaurant, how much is it worth?

We are all able to judge if a restaurant is “cool” or not, based on its location, its atmosphere, the people, the courtesy of the waiters, the wine list and of course, what we eat and what we pay for it. This article deals with a different type of judgement: what is the value of the restaurant itself? If You believe that Real Estate values depend on bricks and revenues, just pass on. For those interested in valuing intangible properties instead, just have a look. (The location is Rome in Italy but Names and Values have been changed.)

Introduction and approach

EqS Equity Studio was recently challenged to place a value on one of Rome’s most famous restaurant, Marcello’s. It is located in the centre of Rome, exactly where you would expect it to be. Believe me, its one of the best places You may want to spend an evening dining out or, if you can’t afford it, just to have a cappuccino in its Coffee Lounge.

The first aspect when starting the job is defining what the value is. We came to the conclusion that Marcello’s value is the sum of the three different values:

a) There is a value because in order to run its business, Marcello’s holds an administrative license. That is, ***** and with no goodwill, a first bit of value.

b) Then Marcello’s has a value because it developed a Goodwill both as a Coffee Bar and as a Restaurant.

c) Finally Marcello’s has a value because of its well known Trademark which captures people from all over the world.

We will not give Real Estate or Fixed assets appraisals: you do not need to read here to understand how to calculate these.

The Value of the administrative licenses

Marcello’s operates in the centre of Rome, in Italy. To run its activity as Coffee Bar and Restaurant it needs an administrative license issued by the Rome Council. Marcello owns two licenses for the sale of food and beverages, both acquired from the previous tenant and then authorised by the local authorities. The first license permits the sale of food and beverages while the second license permits the sale of alcoholics liqueurs.

The value of licenses varies every year based on the market conditions. We have asked a local firm in Rome specialised in the sale of Coffee bar licenses to sell us a full license for the same district in Rome and we have been asked the price of € 120.000, which is one of the highest price in town. With this amount we can therefore acquire today a full license similar to those of Marcello’ and use it in similar premises: we then value Marcello’s ***** licenses with no label or goodwill a total of € 120.000.

The Value of the Goodwill

When transferring a commercial license the seller and the buyer transfer the goodwill of the restaurant. There are various aspects that determine the value of goodwill: some are related to the location, other are related to the activity, other to the people.

The location. The centre of Rome was celebrated in the movie “La dolce vita” by Federico Fellini in year 1960. The movie introduced the usage of the word “paparazzo” and, although the film talks about the loss of values in a helpless moral atmosphere, it gave a tremendous appeal to all the places of the set. Rome’ centre lost some of its appeal as a commercial district in the years 1990 – 2000 but has returned to be a place full of coffee bars and fashion shops in the last few years. Difficult finding a better location in Rome.

The activity. Marcello’s is a glamour place, sophisticated, all new, high target, nice place to go. The Coffee Bar is full all day long, especially for breakfast, but never too crowded. No doubt that it is one of Rome’s more successful coffee bars. The restaurant is not as well positioned. During our visit at lunch time we counted the people in the outside and inside: a terrible low occupancy rate at lunch time, better in the evening. The restaurant seems clearly not successful as it might be in such a famous district.

The people. Mr Franco Rossi, the current owner and manager, acquired Marcello’s only five years ago and did a great job both in terms of place and revenues. There are 40 people working at Marcello’s and the impression attending the site is that they are quite a lot. The service level according to Rome’s standard is good but the location of this restaurant might require a higher class: it’s a bit noisy and waiters sometimes talk to clients as they were friends and that might not be what we would expect from a 5-stars (and expensive) place.

Valuation methodology, benchmarks and result

We value Marcello’s goodwill with the market method. We have therefore investigated current market prices for coffee Bars and Restaurants in Rome in order to derive a benchmark to apply to Marcello’s taking into account all the peculiarities of the target.

We analysed a wide number of sale offers relating to “Bar” and “Restaurants” in Rome, both issued on newspapers and offered by local agents with whom we discussed, we consulted the official price list issued by trade agents and we also derived some price multiples from transactions recently completed.

The price range varies depending on the location. Taking into account only top tier locations, we derived current market parameters based on: price per available seat, price per square meter, price to annual turnover vat excluded, price to annual turnover vat excluded in top location, price to Sales, Price to Ebitda.

We then applied our sample multiples to Marcello’s data, thus obtaining a valuation of Marcello’s goodwill of € 6,5 million.

In our valuation the ratio Price to available seats and the Price/Ebitda multiple result to be very high, but we consider this as the additional value of being in a place known all over the world.

Our valuation is on a stand alone basis and considers the input data as they were given to us by the client. In a sale auction, including the higher potential value that a buyer might place on this location, the final price could clearly be different.

Nominal Price and PV

When discussing about the Value of a Coffee Bar or Restaurant we must keep in mind that the nominal Price of a transaction differs from the Actual Price because of the long terms of payments. It is common practise in this industry to pay cash a percentage of some 20% of the agreed Price and pay the 80% difference in monthly instalments up to 5 years. At a 7,50% WACC the current value is therefore 86,54% of the nominal price. Applying this rate to Marcello’s we obtain: € 6.500.000 x 86,54% = € 5.625.100

Mr. Rossi and the value of the People

We do not know if Mr. Franco Rossi and his staff would continue running Marcello’s should the place chance owner. Although he is an entrepreneur and a manager and he is not a celebrated chef, we still consider that part of Marcello’s success relies upon the people that is running it today. We would therefore apply a rebate of 20% to our valuation should the people walk away.

The Value of the Marcello’s Trademark

Object of the Appraisal

We now come to the most challenging part of the job: what’s the value, if any, of a celebrated label such as Marcello’s? The object of the valuation is the economic content that a buyer may derive from the usage of the Marcello’s Trademark in the economic environment in which it operates and under the jurisdiction on the Italian patent law.

Testing the Value OUTSIDE the context in which the Marcello’s Trademark is currently used

There are three basic questions for an initial assessment of the value of the Marcello’s trademark:

1) The first question is: does the Marcello’s trademark or brand name differentiate the product or service with which it is associated? Is it unique enough to differentiate the product/service? When applying this question to Marcello’s we might want to discuss whether the Marcello’s trademark has a premium appeal on Rome’s clients compared to other coffee bar and restaurants. We would believe that Marcello’s has indeed a upper class positioning among coffee bar and restaurants in Rome, but we cannot be sure that this is due to the Marcello’s trademark itself and not to its unique location, to its sophisticated look and top class service.

2) The second question is: would others be interested in acquiring and using the Marcello’s trademark in a different context? Would the Marcello’s label allow the success to a second or third Marcello’s coffee shop located elsewhere in Rome or elsewhere outside Rome? We doubt this: we do not envisage the opening of a Marcello’s coffee shops chain simply based on the Marcello’s label. Besides this, there may be coffee bars and restaurants with the same name elsewhere with no links to the Marcello’s restaurant located in Rome.

3) The third question is: would a third party pay Marcello’s in Rome to license or use the Marcello’s name, either to duplicate its product or to extend its trademark into other products? We doubt this: Marcello’s is not a concept, there are no particular values associated to the name and the trademark legal protection is weak: we do not see potential usage of this brand name in other products paying royalties to the Marcello’s company in Rome.

In conclusion there is no evidence of value of the Marcello’s Trademark outside the context in which the Marcello’s Trademark is currently used in Rome. So let’s focus on the business as it is.

Testing the Value INSIDE the context in which the Trademark is currently used

The valuation of a Trademark is most effected by the context in which it is valued and the value placed on a trademark derives from the additional benefit that it may bring to the buyer based on the potential synergies. Marcello’s has filed the trademark “Marcello’s” to Rome’s Chamber of Commerce. This registration protects the company against the improper use of the Trademark relating to the coffee bar and restaurant activity in Rome. The filing allows a safer brand usage by the company but has no value outside Rome and in other product’s usage.

Basic considerations when applying the usual trademark valuation methods to the Marcello’s Trademark are:

1) The cost approach: the Marcello’s Trademark was clearly not created by the company and no apparent costs were incurred in adopting this label. The competitive advantages of the Marcello’s coffee bar are strongly related to its excellent location and we doubt that these would be maintained should Marcello’s move to a less interesting location in Rome. We therefore consider the replacement value of the label not relevant.

2) The income approach: Marcello’s price list is expensive but not more costly than other upper segment coffee bar and restaurant in Rome. Apparently the label is not premium price. We also doubt that the company may earn a significant stream of royalties when selling the usage of the Marcello’s label to other coffee bar or restaurant in Rome.

3) The market approach: we believe that in restaurants the value of the label is strongly dependent on the chef and the people running the restaurant rather than on the Marcello’s label. Should the chef and the people move elsewhere the additional value of the label may disappear leaving the only value of the location. We therefore see no relevant market value in the Marcello’s label without taking into consideration its people and its location.

4) The relationship approach: the issue is if the Marcello’s trademark allows a higher customer retention rate and a higher attraction rate compared to a new label. This aspect would need an in-depth customer analysis. During our visit we derived the impression that Marcello’s customers are attracted by the location rather than by the label itself.

A final key issue related to the valuation of the Marcello’s trademark is the fact that Marcello’s is a pure label and not a brand asset concept. We may explain this aspect with two extreme comparisons: MacDonald and Harry’s Bar.

Mac Donald’s is not a ***** trademark, it is a corporate concept represented by a label. The concept includes precise procedures, consistency of experience in quality and service worldwide, strong Trademark legal protection, location selection, marketing approach. Mac Donald is not a label, it is a concept. On the other end of the market we might mention Harry’s Bar by Arrigo Cipriani. Founded in Venice, Harry’s Bar is not only known because of Hemingway or the Bellini’s cocktail (which may be similar to hundreds of similar coffee shops and restaurants) but because it developed a top class concept. The same customers attend Harry’s Bar in Venice, in New York and elsewhere with an extremely strong customer’s loyalty and retention. It is a club that everybody would love to be part of.

Marcello’s is a great place as a coffee bar and a great location for a restaurant. However when applying best practise methodologies to assess the value of its label we end to the conclusion that the value of the coffee bar and restaurant mainly relies upon its location and its people and no relevant additional value is directly dependent on the ***** Marcello’s trademark.

Conclusions

Marcello’s is a glamour place, sophisticated, all new, high target, very cool. We derived a stand-alone market value based on the value of its ***** administrative license and a Value of the Coffee Bar and Restaurant Goodwill while we doubt that Marcello’s Trademark may have an additional Value in a different context.

As restaurant business is a people business it is crucial to the valuation that the current manager and his staff should continue the activity or not and we have considered that a portion of Marcello’s goodwill will simply walk away together with the manager, but this aspect should be further investigated in a real transaction.

 

Cesare Carbonchi, President EqS Equity Studio in Milan, Italy

 

About the author: Mr. Cesare Carbonchi is an international investment banker with large European and US experience in top tier institutions and with CEO experience in leading corporations. Cesare Carbonchi runs EqS Equity Studio in Milano, Italy.

About EqS Equity Studio: EqS Equity Studio is an independent corporate finance boutique that provides financial advisory and transaction services to corporate clients relating to their business in Milano, Italy. See website at www.eqsstudio.com

David Castro asked:


Owning a restaurant can be a fun and rewarding experience. Unlike many other businesses, as a restaurant owner you get the joy of experiencing customer satisfaction first-hand. As patrons take their seats and partake in lively conversation and good food, you are constantly reminded that your business is a success. But just like any other business, as a restaurant owner, times can arise where finances become tight, or the funds needed to take your restaurant to the next level are just not available.

Fortunately, these vital funds can be attained with an unsecured restaurant loan. Whether you operate a start-up restaurant or a restaurant that has been around for generations, having money available for instant use is extremely important. Bars, casual dining, buffets, upscale, themed, and family-oriented restaurants all have one thing in common; they need easily attainable and readily available funds.

An unsecured restaurant loan can be acquired with no collateral, without excellent credit, and without fixed monthly payments. What makes these loans ideal for restaurant owners is the way in which repayment is made. Your restaurant loan payments are made through your customers’ credit card purchases. Anytime customers pay for their meals using credit cards, a small percentage of that sale goes towards the repayment of your restaurant loan. This allows for your payments to decrease if your sales decrease. Accordingly, if sales at your restaurant are always high, your restaurant loan will be repaid more quickly.

If you own a new restaurant, you may be able to have the money you need within the first week of your restaurant’s opening, making the possibilities for your restaurant seemingly endless.

Restaurant loans can be used for anything your restaurant needs. Use your loan to increase advertising, upgrade your kitchen, or for working capital.

Many restaurant owners may first choose to look towards the bank for business financing, not knowing that an unsecured restaurant loan may benefit them much, much more. With an unsecured restaurant loan you will have fewer requirements for eligibility, the ability to get your money faster, an easier and more convenient repayment plan, and the freedom to use your loan however you choose, without having to present an extensive business plan to a lender.

If you need money for your restaurant, look into getting an unsecured restaurant loan. The money you can receive may be able to help get your restaurant out of a financial bind, or to finance the growth and expansion of your restaurant.

Clint Jhonson asked:


Toronto has plenty to offer to all its visitors; even if you are just passing through this city, you will be able to discover amazing tourist attractions. This city has a Restaurant Toronto for almost every food lover regardless of his/her age. For instance, parents and children may find the perfect opportunity to eat together at one of the restaurants that are to be found in this city and which are quite famous in the whole world. In order for you to choose the best Toronto Restaurant, you may use the restaurant review sites; these sites will contain all the restaurants that are to be found in this city together with the necessary information about each of them.

These sites are to be used in order to help you make your mind because the search is to be narrowed; by using the lists you will save some time and you will also be able to take a closer look to the prices and location of each of the Toronto restaurants. The choices are to be reviewed in order for you to pick the wanted restaurant; by using the sites, you will be able to choose a restaurant that you are going to enjoy but if you experience a hard time when trying to narrow down your choice, you may stick to your initial and more familiar choices that you have experienced before.

There is plenty of time for you to go and search for the perfect Restaurant Toronto but you have to be aware that you are going to stick to a particular budget. This budget is to be determined before going to a particular restaurant but you can also experience great dining times even on a tight budget. You may also decide to choose a new restaurant in Toronto and you may not stick to ordering the same menu over and over when in different restaurants; on the contrary, you may try a new menu and you may even ask for the server’s advice in order to choose the most popular menu without having to worry that you are not going to enjoy it. For instance, if you want some wine when in a Toronto Restaurant, you may ask the server for specific wine recommendations in order for you to ensure and enjoy a great pairing.

The Toronto area is likely to come along with plenty of offers when it comes to visiting different restaurants; actually, the city is well known for its major restaurants that are particularly packed during summertime. The tourist traffic is likely to be combined with different local people who are looking for the constant entertainment. The nightlife of this city is also one of the major interests when it comes to visiting this city because this exciting lifestyle actually makes the front of the entire bustling center of entertainment and activity.

There are several dining experiences that this city may offer to every tourist who is in the area; for instance, one of the most popular restaurants is the family type one because this Toronto Restaurant can come along with various sectors that are reserved for the adult people. Almost every restaurant will come along with a special view and if you are looking for a special menu, you can check the national influences on every menu in order to find something that appeal to you.

You should not stay away from the chain restaurants because these restaurants are also likely to come along with exquisite menus; unique atmosphere is to be found in every Restaurant Toronto; you may even enjoy a live performance that may be scheduled at some of these restaurants. The festive atmosphere is to be found in almost every Toronto Restaurant and you may enjoy this opportunity in order to find out more about the Canadian cuisine; the down home atmosphere can thus be combined in order to reflect the entire national style.

Toronto is actually a great place for you to dine and you may use every occasion you have in order to combine the special scenery with the tasty experiences. Every Toronto Restaurant is likely to enjoy a quite brisk business because it is designed in order to face all the demands coming from its clients.

Toronto is well known for its delicious and hearty food; any description about this city will involve mentioning its amazing restaurants; the city will invariably remind you of exquisite experiences and delectable dishes because every restaurant in this city is likely to be versatile enough in order to attract all the potential clients. Offering delicacies is the main thing when it comes to the Toronto restaurants and these delicacies are used in order to transform your future dining experience into a memorable and pleasant one.

Atlanta Restaurant Exchange asked:


I believe that any business will benefit from having a website.  I have worked with internet marketing for many years, and I have seen that people feel like a business has “validity” when they have a website.   I do not do this commercially, however it is a passion and hobby of mine. I have created many websites.

One main point is that it should not cost a fortune to have a website.  An excellent one page site and maybe a contact page is easy to accomplish.  Microsoft Office Live http://www.officelive.com/ is offering a free domain and hosting for one year, as well as providing an easy way to create your own website without any experience.

Keep it simple is an adage that works well here.  People need to only know the vital information about your business.  IE: Cuisine, address, contact info, reviews, etc.

There are many ways to promote yourself on the internet.  One example is the last restaurant that I owned.  Go to google and type in:  hot dog charlotte   

My place is the first that comes up. City Hot Dogs, or my site www.cityhotdogs.com ..   My site is still active, however it tells my friends in Charlotte that I have relocated to Atlanta! 

I would be glad to assist anyone who wants to increase their presence on the internet if you currently have a site.  Any GRA member is welcome to contact me, and we can meet at my office for 30 minutes and I will provide you with enough information and simple tips to get you started, at no charge!  I will provide this information on a personal basis, but not publish it here, because I support the small business folks who are making their living doing this type of work while supporting the restaurant industry.

If you don’t have the time to make your own site, look at the GRA website buyers guide and you will find great resources to create a website for you, and these people can help you optimize your site to be found on the search engines.  I would highly suggest that you use one of the GRA partners to do you site.  The main thing that you have with these folks is personal contact.   

Every day, every restaurant receives solicitation phone calls (especially during lunch hour, don’t they know they are calling a restaurant!!!) and many big companies try to sell you a site for more than 250.00 per month.  Once your site is up, their job is done.  Spend your money wisely, and preferably with a local designer who knows their stuff (and preferably a supporter of GRA)

So, in summary,   Yes, in my experience, a website is important, however, it does not have to cost an arm and a leg!

Doug Marranci

Atlanta Restaurant Exchange

Restaurant Brokers Atlanta Georgia

We sell restaurants in Atlanta and the Atlanta Metro Area