| TAI PARTNERS

GEN ERA L

I have listed my coffeehouse for sale on some selling/buying platforms, is there any issue with that?

Not at all! It’s your coffeeshop.

I don’t understand most of the jargon in here, any glossary?

We have tried our very best to simplify the legal terms and define each deal as much as we could and provided additional hyperlinks for further reading.

If you still couldn’t fully grasp any aspect of the process, we highly recommend that you surround yourself with a team of trusted partners (CPAs, legal attorneys and business brokers) so the simplify it all even further. If you were serious about selling your coffeehouse for us, DO NOT skip this step. We rely on your openness, broader knowledge and commitment to go thought-out this journey.

I have a coffeehouse that is perfect for you but I don’t want to sell it right now, are there any other forms of partnership?

Yes. We are open to the idea of renting your coffeehouse in the long run especially if you already own the property where it is.

As we are expanding the concept of The Arabic Café through franchising, you might be interested in knowing more about the opportunity.

Drop us an email at [email protected] titled with: Partnerships opportunity so we forward it to the team in charge, the shall take from there.

I have more questions

Feel free to send us a line at: [email protected]. We will get back to you as soon as we can.

I haven’t heard back from you since I submitted my form, why is that?

It’s either that your form was incomplete or we are still have no reached a final decision.

Incomplete application will not be considered, if you think your application was complete and have not received an email that inform you that we need more time, then please reach us on [email protected] and we will investigate.

My coffeehouse was rejected, can I try again?

The answer to this question depends on the feedback that you got from us. Typically, we reject unmatched coffeehouses due to their location, financials or a combination of both.

If your coffee house was rejected for the location, located in a bad neighborhood for example, it is unlikely that we change our mind in the future so it is pointless to try again unless you opened a new branch or move to a better neighborhood while you will most probably retain the name and most of the other characteristics, we will consider it a brand new coffeehouse and hence you can apply again.

Why would I consider selling my coffeehouse to you?

Simply because we are qualified buyers!

The sad reality is that most small businesses don’t get sold. The statistics show 80% of small businesses that are listed online will not be sold.

EPI estimates that some 4.5 million firms representing more than $10 trillion in business value will transition over the next decade or so, but Snider believes only about 20 percent to 30 percent of businesses that go to market end up selling. This estimate is consistent with BizBuySell’s most recent national report, which indicated about one of every five listings on the online marketplace for small business sales and purchases had closed a sales transaction in 2016.
Source: Forbes

On the other hand, 90% of buyers do not buy a business.

This means that if you ever landed 10 buyers to buy you coffeehouse, you most probably will end up with only one of them. This is quite in efficient for everyone involved.

What we offer you is a time efficient framework provide you with the best existing strategy and support throughout the acquisition process and at the same time we get a better exposure to the coffeehouses that share our criteria yet scattered nationwide.

What is SDE?

Is there a limit for the number of Café you study at a give time?

We are ready to acquire up to 3 coffeehouses/chains in each state per year.

How long will it take you to get back to me?

We typically form a decision in 2-3 weeks, if we need more time or more information we will let you know whether we decided to buy your coffeehouse or otherwise.

After you submit your form, we will study it in the light of the details you provided and weighing it with our own position.

I won’t use an accountant to prepare my financials. Can you help me?

No.

If you were serious about selling your coffeehouse whether to us or any other buyer, you will have to prepare and audit your financial statements.

In our case, the financial statements comes second after the location. Without them the framework won’t even take a place

DEA L

How do I or my accountant need to present the required statements?

Step one: Prepare clean and software-generated financials, no manual statements.

The most basic form nowadays is using an accounting software. If you know your way around excel or Google sheet, then you may do it on your own.

Accounting ABC is collecting your daily transactions then allocate them under the appropriate chart of account to be able to produce the financial statements: profit and loss , income statement and cash flow. The tax return is also required.

Moreover, make sure that your FS are accrual based not cash-based. Know the difference.

Step two: Subtract all the transactions that are related to alcohol, spiritual beverages and pork if you sell them.

Since we will stop serving them after the acquisition, we want to have an accurate picture of the opening hours and their contribution to the revenue.

process, we highly recommend that you surround yourself with a team of trusted partners (CPAs, legal attorneys and business brokers) so the simplify it all even further. If you were serious about selling your coffeehouse for us, DO NOT skip this step. We rely on your openness, broader knowledge and commitment to go thought-out this journey.

Is there a technical aspect that I need to pay attention to?

Yes.

We will need that you integre to Stripe or Pipe.

What are your deal structures?

Currently, we will close the deal with the approved coffeehouse using at least one of the deal structures we are explaining and illustrating below.

We will decide which deal structure to offer you based on many variables including but not limited to the valuation of your coffeehouse, location, our ROI, timing... etc.

Deal 1: Minority buyout

Exemplary Criteria:

  • Un financeable with the conventional loans,
  • Enough assets

Deal 2: Seller note / Seller-financing 

Exemplary Criteria:

  • Inconsistent cash flow,
  • Un-financeable with the conventional loans,
  • 3 star Neighborhood or less

Deal 3: Earnout

Exemplary Criteria:

  • Inconsistent cash flow,
  • Large chain,
  • Un financeable with the conventional loans

Deal 4: lease to buy

Exemplary Criteria:

  • Profitable,
  • Strong FS,
  • 3-4 star Neighborhood,
  • Excellent location

Deal 5: All cash

Exemplary Criteria:

  • Profitable,
  • Strong FS,
  • 5 star Neighborhood,
  • Excellent location

You say your deal is efficient, is it cost efficient?

Yes it is. We have a framework in place with standard legal documents and read templates which will spare you some of the legal costs. Moreover, the demand for your coffeehouse already exist. So you don’t need to hire a selling-side broker until you absolutely need them and naturally you won’t need to list it online.

As we advance in the acquisition process and reach the time of closing and if you decided to hire our legal attorneys to represent you, we will be happy to split the legal expenses that are typically associated with the closing.

Now there are some costs associated with the selling that you need to bare, we are not a special case.

Maintaining the financial statements of your coffeehouse is crucial for every managerial decision but they are most needed at the time of selling. If you have been procrastinating this important move there’s no better time to roll up your sleeves and crunch the numbers or hire a CPA to get this step done.

If you were serious about selling your coffeehouse for the best price, you will start by knowing how much it is actually worth, a professional evaluation is what you need to put a realistic price tag and neutralize your expectations.

Can you simplify how we will be going through this?

his sketch should do a better job in answering this question:

VAL UATI ON

What is SDE?

What is EBITDA?

It stands for Earnings Before Interest, Taxes, Depreciation, and Amortization.

Read the related article.

Is this multiplier your standard? Will you multiply all the coffeehouses’ SDEs by 2.5?

Yes.

Why do you use SDE and not EBITDA?

SDE would give us a normalized view of what the business will produce for us next year excluding the owner; hence a fairer multiplier.
For business that runs under the benchmark of $5M in revenue, EBITDA does not give the best picture of a business’s value, particularly a small business where the owner runs the day-to-day operations.

Read the related article.

What is the professional valuation report?

In its most basic forms, it’s a document that states how much your coffeehouses is worth at the time of generating.

Who pays for the valuation?

It is considered to be the best practice that both the buyer and the seller conduct two independent evaluation reports, you pay for your and we pay for ours. In most cases, a subjective evaluation report would guaranty a realistic and eventually satisfying price for your coffeehouse,

As we advance in the acquisition process, it’s important to provide us with a professional valuation/due diligence report.

Kindly note if you didn’t conduct your own evaluation or decided to not disclose it, ours will be the only available reference to put a price tag on your business.

I am sure that my coffeehouse does worth more than 2.5X SDE, will I be able to negotiate a higher multiplier?

No. As we strive to maintain the fairness, practicality time and cost efficiency of each deal, such a move will considerably slow down the acquisition process. Moreover, negotiating the SDE multiplier for each deal would require detailed customization for many aspects of the framework.

If you think your coffeehouse worths more, you might be in a better position selling it elsewhere.

How would you evaluate my coffeehouse?

Due diligence partner will refine our initial price, evaluation report- pork and alcohol.

What about the other income streams or the real estate that I own?

I have other streams of income such as an in-house beau-ring business, other than the main operation, would it be included in the sale? Is the real estate included?

As for the real estate, yes, we are open to acquire it with or without your coffeehouse should be proved to be in excellent location.

For any other tangible and intangible assets and by default, all of the tangible assets are going to be included in the valuation, however, if your other stream of income is completely independent and you have or plan to incorporate it at some point, we can easily exclude it from the valuation and the sales price.
On the hand and if you want to sell it to us separately, we are generally open to the idea but we will have to post point the discussion about it until the team decides when.

What assets do you calculate?

  • All tangible assets excluding cash
  • Only registered patents, trademarks, recipes, copyrights of the intangible assets
  • Goodwill

CRIT ERIA

What are your criteria? What are you looking for in a coffeehouse?

First and foremost, it is important that you, the seller, be open and committed to a long transition period, but it’s also task-oriented and execution stuff.

Then, here is a list of the most important criteria that we have counted so far:

  • The coffeehouse must be an independent business, not a franchise.
  • The owner must be a USA citizen or a green card holder.
  • If the business is owned by more than one owner, all owners need to agree to the selling. Majority agreement won’t be considered.
  • The business must be incorporated and is a legal USA entity.
  • The physical coffeehouse has to be located in one of these states..
  • It has to be located in a walking-distance from an Islamic attraction or in an Arab neighborhood or near halal market or food trucks is a plus.

That’s said, the submission form details the technical requirements we look for, such as the financial statements, the basic information about the business owner... etc. Please note that incomplete forms will not be considered.

Lastly, while this offer is only valid in the USA in the meantime. If you’re from another country, we would love to know where, it’s only a matter of time before we be at your home country! Kindly add your email to our email list by filling in the form in the footer.

Which states or cities are you interested in?

We are targeting the states with the highest populations of Muslims: 

  • New York 
  • New Jersey 
  • California 
  • Virginia
  •  Texas
  • Delaware
  • Florida
  • Illinois

What is your sweet spot?

Your coffeehouse is at least 5 years old, has been hitting the mark of $1M to $5M in revenue for the past three years (Excluding 2020) and you have managed to keep 15% of that amount as a net income (The bottom line of the profit and loss statement).

That’s said, we are open to more and less than that since our most important criteria is the location and we firmly believe that every business is different.

Drop us an email at [email protected] titled with: Partnerships opportunity so we forward it to the team in charge, the shall take from there.

My coffeehouse has some of your criteria but not all of them, will you still consider it?

You can email us at [email protected] with a pinned map that shows the location of your coffeehouse and point out to where it is not a match. We will review your email and get back to you if we needed some more information or to inform you about our openness consider it so you fill the submission form.

 © 2013- 2023 – TAI (The Arabic Institute) an Ali and Company LLC Group Holding property