Empowering Hospitality Transitions in a Booming Texas Market
The explosive population growth in Texas draws real estate developers aspiring to build new shopping centers, entertainment districts and commercial centers. And bigInk is the established go-to for helping these clients identify and attract the appropriate mix of hospitality venues. The bigInk team specializes in the strategic launch and rollout of concepts, site selection, lease and contract negotiation, property listing, landlord/developer consultation and representation, and even operations financing.
bigInk is also uniquely qualified to assist owners with decisions to relocate, expand, sell, or liquidate their businesses. “Over our years of being in the hospitality industry, we’ve cultivated a large data base of contacts and buyers who call us looking for deals,” said bigInk CEO Jeffrey Yarbrough.
Yarbrough says the industry is experiencing a “Silver Tsunami.” Indeed, the Small Business Association (SBA) reports that 50.9% of small business owners in America are 50 to 88 years old. And this holds true for owners in the hospitality industry, continuing to drive seller representation for bigInk.
“Many business owners have been operating for 20 to 30 years,” explains Yarbrough. “They worked through COVID, then inflation, and now face labor shortages. One day they suddenly say, ‘What am I doing? It’s time for me to enjoy the fourth quarter of my life.’”
bigInk: How It All Started
As bigInk CEO, Yarbrough’s real-life experience spans over the last 25+ years, running his own business as a restaurateur and marketing leader in Texas.
Along the way, while opening (and sometimes closing) the many restaurants he has been involved with, Yarbrough saw a need. He sought to share his experience and insight to help his fellow peers in the industry. He started bigInk as a public relations and marketing firm specializing in restaurants, bars, food and beverage, entertainment, wine & spirits.
Then in 2007, Yarbrough turned another need into an opportunity that benefits all parties involved. He expanded bigInk to include Real Estate services. It connects growing restaurant companies and real estate developers with restaurateurs and hospitality industry vendors seeking to expand or sell their businesses.
An “A-Team” for the “H-Industry”
Like Yarbrough, Aaron Evans also brings vast experience in the hospitality business. He spent 23 years in various capacities such as vice president of sales and marketing, director of operations, manager and owner. And now as President of Business Brokerage at bigInk, Evans is a licensed Texas real estate executive and active member of the International Business Brokers Association, Mergers and Acquisitions Source (M&A Source), National Association of Realtors, and the Texas Association of Realtors.
Sejal Tailer adds another layer of expertise with her background in real estate development. Tailor is uniquely qualified to guide bigInk clients through design, financing, and construction, thanks to her expertise in project, property, and asset management. And prior to joining bigInk, she delved into the hospitality industry herself, developing her own food hall concept and raising nearly $500,000 to see it through.
Yarbrough, Evans and Tailor are Still Restaurant Owners
Fitting the “Silver Tsunami” client profile to a T, Rick Barton started talking to bigInk a couple of years ago. It was time for him to sell his Hunky’s Hamburgers locations on Cedar Springs Road and in Bishop Arts, along with its catering operation, The Hamburger Man. While there were several people interested, finding “the right buyer” was the most important goal for Barton and the bigInk team.
Hunky’s has always been a place to come and hang out. Barton maintained a consistent presence for nearly 40 years. He had staff members that had been in place for 20 or more years. All the things a buyer looks for were in place: cash flow, brand strength, real estate value, management and employee base, and tidy bookkeeping.
Yarbrough and Evans were sitting at a table discussing the sale with Sejal Tailor, their third partner, when Tailor brought up the idea, “We should buy the damn thing.”
“We really loved their culture, the neighborhoods, the staff and management team,” Yarborough concurred.
Mercado Juarez–Another Sales Success Story
Mercado Juarez was founded by Fort Worth restaurateur Don Bowden in 1982. Bowden was a pioneer in the Tex-Mex restaurant scene who brought innovations like a flour tortilla machine and preserved avocado pulp to the region.
When Bowden retired in 2001, he sold three Mercado Juarez locations to a group of managers. The first location that opened at on Northwest Highway in Dallas was closed in 2018, leaving the two remaining locations in Arlington and Fort Worth. In 2022, there were still seven of the original managers remaining as owners. The youngest was 67 years old and the oldest was 92 when they approached bigInk about wanting to sell. Yarbrough says there is something about waiting too long. “Two of the Mercado Juarez owners died of old age during the five-year exit plan,” he said.
Some were surprised when the new buyer Marcus Paslay was announced. Paslay’s company, Scratch Hospitality, oversees Fort Worth favorites such as Clay Pigeon, Piattello, and Provender Hall. ‘These are fine dining establishments, said the naysayers. Why did he want to get into Tex Mex?’
But Paslay saw it differently. Mercado Juarez had both great cash flow and great real estate. The Fort Worth location is at the primary exit for traffic going to or from the Stockyards. And the Arlington location is on the Interstate 20 service road in the heart of the city’s sports and entertainment district.
But the most promising part of the purchase in a market where labor is so hard to come by was Mercado Juarez’s 150 loyal employees. With key people in both the front and back of the house, Paslay saw an opportunity to groom some of them for roles in his other establishments.
Planning an Exit
Yarbrough said the average sale takes 12+ months. And during that time, an owner should always run their business just like they would if they were not trying to sell. “It’s important for an owner to focus on running the restaurant. If they try to sell it themselves, there are a lot of things that can go wrong. If quality goes down, then sales go down. And then the value goes down,” he emphasizes.
Besides the experience that the bigInk teams brings to the table as Business and Real Estate Brokers, its clients benefit from the firm’s relationships with experienced transaction attorneys and CPAs.
Denney Law Group dons itself a Nose-to-Tail Law Practice®, proud to represent start-up companies in various stages of life. The firm counsels clients from founding, through growth, to exit, providing high-quality legal services. And Denny Law Group is exceptionally proud of its nationally recognized Restaurant, Bar, Alcohol & Hospitality practice.
Since a sale always starts with preparing accurate profit and loss balance sheets, a CPA also plays an essential role. An FF&E (Furniture, Fixtures, and Equipment) List is another important financial document. It encompasses all the movable items that are not permanently attached to the building’s structure. And an EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is yet another valuation tool. It measures a company’s operating profitability by excluding non-operating expenses and accounting practices like interest payments, taxes, and the non-cash charges of depreciation and amortization.
Matthew Mabel of Surrender, Inc. often consults with bigInk clients to help them prepare for a sale by maximizing, harmony, revenue, profits and unit growth. Mabel combines his experience as a former business owner, operator and corporate treasurer with over two decades of consulting.
But the Picture Isn’t Always Perfect
Sometimes the best exit plan is simply an asset sale, says Yarbrough. “The owner is not making money or they’re just breaking even. But this is better than walking away with nothing or continuing to work hard in spite of a downward trajectory.”
Having first-hand experience with the ups and downs of the industry helps him understand and relate to hard decisions that must be made when it’s time to sell a business. “Teddy Wongs was my 32nd restaurant to open,” he explained, speaking of a former 7-Eleven that he bought in partnership with bigInk client Chef Patrick Ru. After they turned Teddy Wongs into Fort Worth’s top Chinese restaurant, Yarbrough sold his interest to Patrick Ru who continues to lead its successs. “It was one of 18 concepts that were successful. That means there were nearly as many failures as successes. Sometimes the only reasonable goal is just to make enough money to pay the final payroll and payroll taxes and move on to what you want to do next.”
In the End, Selling Is As Much About Resilience and Foresight As It Is About Numbers and Negotiation
The journey from opening day to a successful exit is rarely linear, often marked by hard lessons and unexpected turns. Yet, with the right partners, a clear-eyed approach to valuation, and an unwavering commitment to quality, owners can navigate these transitions with confidence. bigInk’s goal is for each closing chapter to lay the groundwork for new beginnings, both for exiting owners and the teams who helped bring their vision to life.
