Southwest Franchise Café Sold for $210K, All Cash

About the Business

• Industry: Food & Beverage – Franchise Coffee Café

• Location: Southwest

• Size: $500K–$750K in annual revenue, $50K–$75K in cash flow

• Sale price: $210,000 (asking price: $205,000)

• Listing to signed LOI: 163 days

• Signed LOI to close: 105 days

The Challenge: Selling a Franchise Before a Move

The owner was relocating out of state and needed a buyer the franchisor would approve. Many buyers passed on the franchise royalties and lease terms.

163 Days to a Signed LOI: Holding Out for an All-Cash Buyer

What happened at every stage

1. Valuation: Baton priced the café on its cash flow, and the final price came to about 3 times cash flow.

2. Buyer Outreach: 90 buyers viewed the listing, 39 opened the data room and 14 requested introductions. When interest slowed, the Baton advisor followed up with every interested buyer and pushed for written offers.

3. Offer Selection and Negotiation Support: Four buyers made early offers, including two at $140,000 that were non-starters. A local buyer then signed an LOI at $210,000, all cash.

4. Diligence and Closing Support: The deal needed the franchisor to approve the buyer and the landlord to consent to the lease assignment. Baton ran weekly diligence calls around those approvals, and the deal closed 105 days after the LOI.

The Results

The buyer is a local coffee enthusiast who completed the franchisor's training before closing. Through Baton's process, the business:

• Sold for $210,000, about 3 times cash flow

• Drew 4 early offers before the winning LOI

• Closed all cash, with no lender and no seller note

What's next for the owner?

After a one-week hands-on transition, the owner is free to relocate out of state.

Advice and Lessons for Future Sellers

1. Don't settle for lowball offers. Passing on the $140,000 offers left room for a $210,000 all-cash offer.

2. Plan for the franchisor. A franchise sale needs the franchisor's approval of the buyer, so build that time into the closing timeline.

3. Give the buyer skin in the game. The owner asked for a refundable 10% deposit tied to franchisor and landlord approval, which protected both sides.