Hoping to get knowledgeable opinion form those better informed than myself. I own a property (land , building. parking lots) . On it resides a restaurant. I do not own the restaurant. Strange situation but a partner in the property also owns the restaurant (long story - I'll spare you). Restaurant was doing about 850k but was mismanaged and just recently closed. Looking to sell the property and the partner who owned the restaurant wants additional equity credit for "Good WIll" of the restaurant. My position is the restaurant has no value because it's closed and therefore is irrelevant. Another restauranter will come in and buy. His take is it will be much easier to sell, sell faster, and sell for a higher price because he can document revenue. I might buy in a bit if the restaurant was still operating, but essentially we have a vacant building.
Other partner is frankly a bit desperate (tons of debt which is why the store closed) and is grasping at ways to get more in his pocket. I'm taking the position of risk and reward. It ultimately failed yet that has nothing to do with us selling the property. Thoughts?
rickle, bummer your thread hasn't had a response yet. Sometimes bots are smarter than humans anyways:
If those topics were completely useless, don't blame me, blame my programmers...
Loved "the restaurant has no value because it's closed and therefore is irrelevant."
Your in a difficult spot with your Business Partner. If your Partner did not have an interest in the defunct restaurant. Would he offer goodwill to another owner of the restaurant?
Really, I think your partner is confusing Goodwill with Salvage Value. The used equipment and build-out has a value to someone and he should try to sell or sublease the space since he feels that it has a lot of value.
Yeah I don't think they fully understand what goodwill actually is? It's more of an accounting function/balance sheet item in which purchaser of company/property pays above and beyond fair market value (less liabilities) that they can use going forward. I'm not sure what your partner would get out of this unless he's trying to use that as a selling point for said purchaser. For example: "Pay me $1m more than it's worth so you can have goodwill on your books going forward."
Interested to hear more thoughts.
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