Buying an established brewery.

[TwoFisted]

I have been working on opening a micro brewery for the last year and I'm still a long ways from really doing it. The numbers and the capital needed to make it work is astounding. Out of no where I get info on my favorite little micro and tap house in my area is up for sale. I love that place but I just don't know. They are offering a 20 year contract for the 9000sq foot building and everything in it for less a month (half) of what I was looking to spend on just rent for a smaller building. That does not buy me the "brewery" though. The name, logo and beers will of course cost me more.
I have been in contact with the owner a bit and hope to talk with him tonight more about this.

My questions pertain to how is the process of buying an established and running brewery different then starting one from nothing? How is the paperwork different? Would it still be a 6 to 9 months of not brewing and dealing with all the government paperwork, meetings and inspections?
Would the brewery be able to continue to run under the current owner as we work on changing the ownership over?
Any of you have any experience in this?

[TwoFisted]

So no one knows anything about buying a brewery that is currently producing?

[fa50driver]

I am no expert, but I know of bars that have transferred ownership by adding an individual to their LLC, and then removing the original owner a few months later, thus no interruption of licensing. Not sure how the Fed views this, or how your attorney would view it in regards to change of ownership.

[PanConsulting]

I have attached a Business Acquisition Flow Chart to give you the basic idea of the process. There are several ways to do this, but this will give you an idea.

[Brewtopian]

If understand your post you have an opportunity to buy the brewery on terms for a lot less than you'd planned to spend to start from scratch but it doesn't include the brand. Let me ask this, is the brand worth anything? If its struggling or doesn't have the financial performance that you'd like to see then I would consider jettisoning the brand and creating your own while maintaining the space and equipment that is currently available. Even if you have to relicense the space its still going to be a lot less expensive than starting from scratch and you don't have to carry any baggage from the previous owner.

[TwoFisted]

thanks that helps.

As for the brewery, it's actually doing very well and is well known locally for having great beer. The owner/brewer tells me that he's got a personal family problem and that's why he needs out and quick. I know that he was looking at bigger buildings to expand just a few months ago.
He would not give me any more info then that as to why he's getting out.
I do know that he fought cancer 2 or 3 years ago. My "speculations" is that the cancer is coming back. He's got two small kids and mentioned not wanting to be spending all his time at the brewery and not seeing them. But like I said, that's just my guess.
He's sending me all the business financial information so I will have the info I need to move forward.

[liammckenna]

Sounds too good to be true and very difficult to navigate with kids, sickness, strife etc.

Ownership of the capital assets is key here in terms of long term value (real estate mainly) of the current enterprise.

Although twenty years is a long time.

Time enough (at a sweet price) to develop your own thing within his thing to determine your own future beyond his thing, if you know what I mean.

When you see his financials and know his business is currently viable, I would go all in.

If you don't have one, get a good lawyer you feel comfortable with. Tell him/her your thoughts to help frame your paperwork moving forward.

Whatever happens, you'll owe him a legacy of some sort if only for the sweet opportunity. Don't forget that.

I feel like a vampire.

Pax.

Liam

[Selkirk]

20 year contract for the 9000sq foot building

That's one hell of a commitment. Are they asking for a personal guarantee? God forbid something go wrong, but what if it does?