Buy an existing fish and chips business?

Hi everyone,

Is anyone out there looking for a business partnership or know where to look for one so they can get started in buying investment properties? I have just obtained an equity loan from ANZ bank for $100K and am now looking at ways to really start investing. I have an investment property being rented in Quinns rocks at the moment which is barely CF+. I am 38 yrs old, single, lived in Perth all my life, have a good credit history, self employed parttime
and am now keen to buy an apartment to live in and start an outside business. I am considering buying an existing fish and chip shop here in Perth that operates 4pm-8pm (6 days) and turnover is $5K p/w. Asking price is $90K. I havent looked at any of the details yet as i need to find a business partner who can split 50/50. At the end on Nov my dads friend asked if i would like to
check it out. it is run by a couple of elderly Greeks who wish to retire and sell up. I contacted a friend i knew from a few years ago at my last job where i was downsized and he says would be interested as a partner although i found out he has now sold his house, spent the money and has for the past few months worked in kalgoorlie as a water cart truck operator on a flyin-flyout
casual non-permanent basis. He says he has missed several credit card payments due to his being away so much. He tells me he he got caught up in the interest rate rises on his mortgage and due to the stress had to sell his house and then lived overseas for a couple of years until his funds ran out. I am  toldn he would not be able to get financing even an unsecured personal loan due to having a credit impairment, recent employment (<6months) and no other assets. Is this true?
Perhaps he may be able to work in the business part-time as he is very good at kitchen work. My main objective is to buy a business (hopefully one that does well!) work in this for 5 years and
at the same time buy my own apartment and live in it. During this time, i would also like to buy another investment property and rent it out and then buy a larger fish and chip business or other business that does not require my presence. My background is office work due to my accounting/marketing qualifications although i was downsized
and started in self employment which is now part time in an unrelated field. I had intented to become a chef for a while and started a certificate in commercial cooking at TAFE
but i figured it would be best if i started a business and have a rental property to save on taxes. I investigated a courier delivery business with Messenger Post, Fastway and Courier Australia although
ruled it out after realising my road navigation skills are not the best, very long hours and having to register as a company.

Other ideas i have considered are:
1) Lunchbar - Not very profitable?
2) Subway - very expensive
3) Krispy kreme - If it comes to Perth but still very expensive!
4) Jims VIP handyman - Not much experience here except some renovations on the Quinns house
5) Organic food shop
6) Boost Juice Bar

I read on this forum that a franchise is not a good idea as the franchisee seems to benefit the most? Anyone else pursuing a business partnership in Perth so they can also start investing in property and get
ahead in life rather than working for an employer?

Thanks in advance
Robert

Franchising can work well, but it is restrictive for you in many ways; you can't use your own creativity to run the business, a chunk of your turnover and profit goes to the Franchiser. The upside is you have good support and ongoing training etc (hopefully).

You are simply buying a job in many cases, but they give you great knowledge in running a business properly and you can use that for other ventures.

One of my mates now owns 2 Brumby's stores. He worked his arse off for several years in one, doing all the crap shifts etc, then bought the second one and worked harder, but he's laughing now.

Another guy I know started with one small 7-Eleven , and now has a very big one with excellent turnover.

Fish and Chip shops are crap hours and hard work, but usually good profit. If you don't mind the sacrifice then go for it.

Cheers,
Marc.
erardent@hotmail.com

"we get sent lemons; it's up to us to make lemonade"

Thanks L.A Aussie for your comments.

It's great to hear your stories of those people you know who have done well for themselves and in particular the franchise industry.
 
I found out today that the fish and chip shop in manning road, Manning, Perth just got SOLD for $120K and the new owners bought the land to go with it! Boy that was quick.

I thought about the hours for a fish and chip shop and  they do seem crappy hours. Since my potential business partner is in dire straights with his finances, it would not be possible to include him in my business plan.

A cousin of mine is in the real estate business and she does flipping for a living with her husband. They have been on the move from house to house in Perth for the last 15 years and now Melbourne as they buy one property, use it as their PPoR until they sell it, make a profit and move to the next one and repeat this process over and over. What a crazy lifestyle considering they have 2 kids who have to keep changing schools! On the plus side, they have made millions this way. 

I like the idea of making this kind of money but not the lifestyle! One idea i had would be the same as many other novices in property who would find rundown properties to renovate and then sell. Best case scenario: My renovation skills would be the typical renovator type such as paint walls, tiling, replace carpets, update kitchen and bathroom with new fitouts. Worst case scenario: Could not do major fitouts and structural changes. 

It looks like i'm going to have to get more active in figuring out what the next step i am going to take. Find a business partner, in what business line, invest in property. Decisions, decisions...

Going back to a 9-5 job is not too appealing and every time i come back to this forum to seek ideas and advice, i get the investor bug and realise it should be business and investing in property or if employed be a high income earner and buy property.

I will start looking at apartments for sale in Perth and start making some offers on them i reckon before starting a business. Can't afford much over $250K and am taking on board the possibility of interest rates hiking up to the 10% mark over the next couple of years.

Glad to see someone has replied...
Thanks
Robert

Hey mate I came across your post as basically because my story and what I'm looking for is so similar to you. If you want to chat more about it my email is mochambers87@hotmail.co.uk

If you want to move to Qld.  I have a fish and chip bus/  general store that turns over 20k a week for that price.  Mackay.
0429493305

"I Need more power Scotty!!"

I haven't read through all of this thread but for what I skimmed over I admire your enthusiasm but I would be careful with partnerships and the fish & chip shop business is losing customers as people become more health conscious of fatty foods. Of course I believe though that you can make fish & chips healthy with the correct cooking procedure and oil but the public don't understand that. Also it could be a lot of hard work to run this type of business.

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Ok so business turnover is $5k per week meaning an annual turnover of $260,000. Now the real question is what is the net profit (after accounting for a reasonable owner's salary say $40-$50k). If this equates to about $40k per annum (after the owner's salary of $40-$50k) then the pricing is about right as multiples of net profit of between 2 to 2.5 is fairly reasonable. I would be aiming for a multiple of about 2 for this type of business.

Working hours 4-8pm are very good. Need to look at the fixed (rent, rates, etc) and variable costs (staff wages, electricity, etc) to see whether there is a decent net profit.

Errol a million dollar turnover business for sale for $90k ? Can I ask why ? That seems quite cheap (cheap as chips :-p) or are you not making a profit or working horrendous hours and paying for it. With that sort of turnover I would think you could put in a full time manager and still make a decent crust.

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Information is for general purposes only.

Hi I have read your comments about Fish n Chips, what you say about the industry is WRONG. I have been in this industry for 20 yrs and it is very rewarding. You obviously don't have the passion desire to work in this industry.
I work on my business every day, I am always raising the bar to my customers the quality and service.
I have had 2 franchisees and they made a very good living out of fish n chips.

HS Says and I quote " the fish & chip shop business is losing customers as people become more health conscious of fatty foods. Of course I believe though that you can make fish & chips healthy with the correct cooking procedure and oil but the public don't understand that. Also it could be a lot of hard work to run this type of business"
To answer the first part, I use rice bran oil, which is very good for you, the product does not retain the oil like the animal palm oils do. It last longer and it has antioxidants. We filter our oils every night with a special oil pump.
It is hard work BUT what job isn't.
We have our flake cut for us, potato cakes and chips  come in frozen as well, which gives me more time to work on my customers .
I'm into my 3rd yr and we have a 35% growth. We are turning over at present is 1,500,000 and still growing.
Regards
Steve
P.S. Any one need advice to improve there business you can contact me ..... steve_debba69@hotmail.com

Personally, I wouldn't get into the business (because of the long working hours, and I just dont have the passion for it myself)

It may be different for you though. Stevedebba's comments are really interesting, and an innovative fish n chips shop that offers a healthy option may get more customers as people get more healthconscious.

In my view, I'd rather go with Subway, or some other franchise, because the business system already works and they support you (even if you don't have the experience)

I'm passionate about fish'n'chips but only as a consumer.  It's hard to find a good one that does everything right so I hardly ever indulge. That could explain a good part of their decline - not just changes in health values.

Generally though it seems that they don't make batter like they used to.  A lot of places have either virtually nothing or a thick gluggy covering that soaks full of oil.  The fish is often too thin so that it is overcooked and way under proportioned to the batter.  Where have those thick succulent flake fillets gone coated with a light crisp golden cooked batter?  Potato cakes (scallops) are hit and miss and the chips are often overcooked.

I can see a quality fish'n'chip shop doing a good trade and it's great to know there are people out there who are passionate about it.

I found a good one in Lorne earlier this year and the queue to get served substantial, but it's half a day's drive away. There's a couple of average one's around home and plenty of poor ones.  Where's your stores stevedebba, I'd love to check it out?  Anyone else got recommendations in melbourne?

Andrew

I can do it. You can do it. We can do it!!