The Intrinsic Value Podcast - The Investor’s Podcast Network cover image

MI348: Beauty in Broken Things w/ John Marsh

The Intrinsic Value Podcast - The Investor’s Podcast Network

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Maximizing Restaurant Profits for Investors and Landlords

The approach involves constructing a model for the restaurant to determine what tenants should pay, aiming beyond what they could pay. By starting at the breakeven point and aligning with potential growth, significant profit increases can be achieved. A practical example demonstrated a strategy where a client's restaurant revenue was projected to increase from $1.7 million to $2.5 million. By investing $150,000 in improvements and negotiating a rent agreement for 8% above the previous revenue peak, the landlord's income soared. This model ensures that restaurants can capitalize on higher profit margins beyond the initial break-even point, as profits substantially increase with higher revenues.

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