One Richmond bar scores big and creates a legacy
Posted: November 21, 2011 | Author: AlixBryan | Filed under: B&H News, Buying a Business, City of Richmond, Company News, Hanover County, Henrico County, Restaurants, Selling a Business | Tags: Bandazian & Holden, business brokering, business owners, buying a business, Restaurants, Virginia | 3 Comments »Just two decades ago, sports bars weren’t very common. This is a community story for locals and sports fans, about one of Richmond’s first sports bars, the changing city landscape around VCU and the retirement of one well-respected business owner.
One Richmond bar scores big and creates a legacy
While the city hosts numerous restaurants and acclaimed cuisine, we also have an often overlooked local sports bar–not a big chain–that’s worthy of a boisterous hurrah.
Mulligans Sport’s Grille first swung open its doors in 1990 to reveal about 20 televisions inside–none of them flat screens–all broadcasting sports games and commentary.
Think about that novelty. The playing field for sports bars used to be fairly empty of any competition.
Harken back to the early 90s, if you can. The daily routine was sans internet, cable television was not a household standard–and it certainly did not supply the multiple sports networks available now. There was an audible welcome from sports fans–to the extent that the dream of three men multiplied into six restaurants.
Mulligan’s first opened in Short Pump, before the area was the bustling “suburban downtown” that so many city dwellers love to hate. Now home to Capital Ale House, the space is 12,000 square feet. 
The first store was so successful that by its second year, the bouncers came to work before the waitstaff. They were needed to control the the crowds who would try to push inside when the waitresses arrived, as to stake early claim to the best seats in the house. The Wednesday concert series brought thousands to Innsbrook, and hundreds would just camp out at Mulligans, many taking in the concert from the comfort of the patio.
John Sweeney, along with the Hurley brothers, Mark and Matt, were experimental business owners. They tried off-the-wall things like “cook your own steak” night, where hot grills stood ready for the sports aficionado to meet tong to meet steak.
The investors ran with their game plan, opening a total of six locations. After the Innsbrook location came Mulligans in Mechanicsville, Sixth Street Market Place, Southside, the Fan and then Farmville.
MULLIGAN’S PLAYS THE FIELD, RUNS BUSINESS DOWNTOWN
Sixth Street Market Place being the failed city investment that it was, Mulligans bailed ship and in 1996 docked at its current Fan location, at Harvie and Main Streets. Of the six locations this spot is one of the two Mulligan’s that remain.
Some might remember that the bar Coyotes was formerly housed in that spot. Some might also remember that until 1985, the legal age for consuming libations was but 19, which meant a bar scene could thrive around Virginia Commonwealth University–at that time it was a commuter school.
Those few students who did live on campus were young enough to drink. Many a neighborhood businesses dried up when the drinking age changed, said Sweeney and by 1996 there really weren’t any bars in the area around Mulligans.
In fact, Main Street ran through the VCU area without yielding many options at all. The VCU area pretty much ended a few blocks east of Mulligan’s, the main anchors of the area were 7-11 and Piccola’s Pizzeria, at Harrison Street. One big block west of the bar was the former Border Cafe (now Bellytimber), but the streets were mostly vacant and dim.
PASTELS SATURATE THE NEIGHBORHOOD IN HOPES OF BRIGHTER TIMES
Ed Eck, of Eck Enterprises, had a lot to do with the transformation of the dreary area. 
In the late 80s, extensive remodeling and fresh pastel paint shined up a lot of the properties Eck had purchased along the long, two-block stretch of Main Street buildings.
Eck’s first business, supplying electrical materials, was near the Gold’s Gym off Harvie Street. When city businesses began an exodus over the county lines, Eck chose instead to invest in the Richmond area.
It took awhile though, and the area still doesn’t have the same sort of miniature Shockoe Bottom appeal like the area farther up at Main and Robinson Streets.
Style Weekly and Richmond.com once had headquarters in the strip around Mulligan’s, along with a handful of other businesses. Still, it wasn’t quite the mixed-use space it has slowly become.
Sweeney made the decision to touch down at that location because he thought it had a lot potential, the building was open and the place was already built out for a bar, with a kitchen. “We liked taking places that didn’t make it and turning them around,” he said.
He thinks the Fan area is a lot safer now. “Individual businesses and people added lights and safety, but the city really could step it up,” said Sweeney.
Eck also helped convert much of the dilapidated, boarded-up homes along Cary, starting at Meadow and heading east. The area was replaced with new buildings, businesses and renovated apartments. Lights came up and in moved people.
Also fueling the progress machine was the VCU transition over the the past decade, from commuter school to college university.
To understand how pivotal Eck has been in transforming this downtown stretch, take a quick glance at the business community he enabled: Little Mexico, Gold’s Gym, Uptown Color, PharrOut, Rev It Up!, City Dogs, Capitalmac, and Uptown Gallery–and that is not the entire list.
“The city’s vision was good but citizens had the vision and resources–and the desire to keep the architecture,” said Sweeney. “It was smart urban planning with the mixed-use retail.”
Video: Changes along Main Street brings foot traffic, residents and business.
EASY TO OPEN A SPORTS BAR NOW, HARDER TO STAY OPEN
Another thing that has changed over the years: television.
Mulligan’s in the fan now boasts around 70 of those boxes, about 50 more televisions than the flagship store had when it opened. People have more access to games, through cable and streaming internet at home.
“It’s easier to become a sports bar now,” said Sweeney. “Now you have to do more than just show a game.”
It might be easier to open a sports bar, but it takes a certain finesse to handle all the obstacles. Sports are obviously the bread and butter of the business, and with sports comes fair-weathered fans.
“You will notice that once you get to the midweeks in NFL,” Tray Vanneman, who has been with Mulligans 14 years, said. “A lot of people’s team start dropping off and they stop coming in because they only want to come out when their team is winning.”
But Mulligan’s hasn’t fumbled. Instead, inside the cavernous 8,000 square feet space you will find all the necessities to bring out the crowds.
There are video games, darts, billiards, ping pong, a outside deck, a covered outdoor patio, and a main smoking room. Patrons have lots of things to do besides just catch the games: poker, karaoke, trivia and keeping up with the elaborate, daily rotating happy hour menu.
SWEENEY AS COACH, STEADY DRIVE FOR THE WIN
Sweeney moved to Richmond from Buffalo, NY in 1978 and started teaching at Freeman High School, in the Industrial Tech department. In the late 80s, he switched careers and went to work as a bartender at the Red River Rib company.
He thought he would get his MBA, but that never happened. In fact, he laughs at the thought now. “An MBA was unnecessary, you have to get out and work for someone else to learn the business.”
Perhaps Sweeney inherited a penchant for the restaurant business from his large Irish family. It’s clear he’s an extrovert and great conversationalist, as he sits comfortably chatting and answering questions for two hours. Topics delve in all directions; from city politics to best live concerts to current books and back to Richmond’s future.
As people tell it, that’s the same charisma he brought to the bar. Sweeney loved the daily interaction. “Of course it’s important to enjoy what you do, but you’ve definitely got to really enjoy the restaurant business.”
He attributes the success of Mulligan’s to “surrounding himself with good people.” He definitely built a team. Three employees have more than 12 years at the bar. Sweeney said the top manager has been there from the beginning and that the head bartender started as a bar back.
No one can say enough nice things about him as a person, or as his qualities as a dedicated, hands-on restaurant owner
“John will bend over backwards to take care of his people,” Vanneman said, and commented that Sweeney has seen more of his adult life then Vanneman’s own father. “You need help in your personal life, there’s John.”
“John is hands down the best boss I’ve ever had, period,” he added.
So one could imagine that the recent sale of Mulligans had the employees worried. Would the new owner employ Sweeney’s philosophies? Would their 10 plus year careers at Mulligan’s come to an end?
NEW COACH TAKES OVER THE PLAYBOOK
Like Sweeney, a fork in the career path steered Edward Dudley into the restaurant business.
Formerly employed with Verizon, until an unexpected layoff in 2009, Dudley bounced back from unemployment by investing in the franchise sports bar Wings, Pizza and Things, situated at Regency Square Mall.
He signed right before the Michigan-based Taubman stopped making its mortgage payments on the property and many big name stores withdrew from the once bustling mall.
One night Dudley, needing a business with more foot traffic, came across the online sale listing for Mulligan’s. Four months later he was the new owner.
NCAA March Madness saw Mulligan’s scoring major points. Sweeney and the bar appeared on ESPN when national attention turned to VCU’s shocking Final Four success. Lines were out the door seven hours before game time.
No one had seen anything like it, and “what it did for business was unbelievable,” said Sweeney. “It covered a lot of past sins.”
It was a good time to sell, and Sweeney was ready for a vacation, one of the first in 20 years. “The interest on the market was unbelievable,” Sweeney said.
Bandazian and Holden, a Richmond firm specializing in property management, commercial investment and business brokerage, negotiated the sale. In July, Dudley took over the court.
Vanneman said the crew’s initial fears and hesitations have disappeared. The transition has been smooth, and mostly unnoticeable by customers. The menu has been upgraded, and much-needed building repairs are underway. Otherwise, Dudley is hands-off and busy managing his other restaurant.
“I have taken a lot of things I learned here and implemented it there, and visa versa,” Dudley said.
Sweeney, already looking on the horizon for the next opportunity, said he really has no regrets. “In hind sight there are always some things you would do differently.”
It’s true, RVA, Mint is coming to the Fan!
Posted: September 25, 2011 | Author: Nathan Hughes | Filed under: B&H News, Buying a Business, City of Richmond, Restaurants | Tags: Bandazian & Holden, business owners, commercial real estate, downtown Richmond, Restaurants, Richmond, Virginia | 1 Comment »There was a rumor floating around for the past few weeks that Amy Cabaniss, the owner of Julep’s in Shockoe Bottom, was purchasing the building where Davis & Main operated a long-standing restaurant for decades. There was good reason for the rumor, because it was true!
Amy closed on the deal to purchase the real estate and the equipment at 2501 West Main Street this past Friday afternoon. Richard Holden, Principal Broker at Bandazian & Holden, represented Amy in the purchase.
It has been on the market for some time. Fan of the Fan reported back in June that the restaurant had closed, and I know that it had been for sale for some time before that. We are proud that Bandazian & Holden was part of making this sale happen, and even more proud that such a fine restaurateur will be the one taking over.
The new restaurant will be Mint New Casual Cuisine. From all of the great ideas that I’ve heard from Amy and from the reactions I’ve heard so far from the neighbors, the Fan District will be very happy to have her there!
Congratulations on the purchase, Amy! I can’t wait to try out the new place!
New insights on the sale of Cafe Gutenberg
Posted: June 14, 2011 | Author: Nathan Hughes | Filed under: Buying a Business, Restaurants, Selling a Business, Weblogs | Tags: Bandazian & Holden, business brokering, business environment, business owners, buying a business, downtown Richmond, Restaurants, Richmond, selling a business | Leave a comment »As you may have noticed, we have Cafe Gutenberg for sale (see the big “Cafe Gutenberg – FOR SALE” in the menu above, or just click here). It’s a little bit of a different situation than normal, since usually these matters are highly confidential and even to find out the name and address of one of our business listings you would have to go through a screening process and commit to a Non-Disclosure Agreement.
In this case, the owners had decided to be upfront with their staff and even agreed to do an interview with Style Weekly about their decision to sell. Unfortunately, the article published didn’t accurately portray how the owners of Cafe Gutenberg feel about Shockoe Bottom or what they said about their reasons for selling the business.
Jason Guard, aka @rvafoodie, has given Chef Jen Mindell a chance to tell her side of the story as to why she and her partner are selling the business and to provide some background on how the past few years have been in Shockoe Bottom. Check out her guest post on Jason’s blog, Caramelized Opinions.
What’s a business broker, and what do they do?
Posted: December 14, 2010 | Author: Nathan Hughes | Filed under: B&H News, Buying a Business | Tags: Bandazian & Holden, business brokering, business environment, business owners, buying a business, selling a business | 1 Comment »Business owners often wear many hats: Manager, Worker, Bookkeeper, Janitor, etc. Many owners can do well at all these tasks because they all pertain to their business. In many small businesses, the owner has a lot of proprietary equity; the business is truly the owner’s “baby” and they understand it from every angle. So often, when the decision to sell their business has been made, they are not sure how to proceed or have unrealistic expectations; they may talk to their CPA or other advisors and some may elect to attempt to sell it themselves. Sometimes this is because they are not aware there are any other options. Sometimes it is because they feel that they can do a better job than anyone else since they know their business so intimately.
However, the decision by an owner to sell their own business may be one of the largest missteps of their career. Why? Selling a business is much more complicated, involved and typically much more important than selling a house. Yet, imagine that you wanted to sell your home yourself without using a Realtor. You may know your house better than anyone, so it may seem a logical decision. But do you know what it’s really worth in today’s market? Do you know how to market it to as many qualified potential buyers as possible? Should you get an offer, do you have the experience to negotiate on your own behalf to get the most amount of money possible? Once agreed on a price, can you assist the buyer to assure proper financing is attained and keep the deal moving forward? Finally, even if you answered yes to any of these questions, can you afford the time it would take to complete this process? How much would this time really cost in terms of your productivity? Well, just like a house, you can ask each of these questions about your business and whether taking the sale into your own hands would really be to your benefit.
Fortunately for you, there is a better and easier way to sell a business that will typically result in a higher sale price, a faster close and require much less stress and time on your part. Chances are, there is a qualified business intermediary or ‘business broker’ in your town who, like a real estate agent, can properly price, list, market and sell your business. Selling a company confidentially is a complex and intricate process. A professional business intermediary will be able to handle every aspect of the sale cycle and keep the transaction moving forward through each step.
Services that a business intermediary will perform on your behalf will start with an evaluation of the business and an appropriate, professionally determined sale price for the company. A business intermediary will base the price on several pieces of information including the financial health of the business, demand in the marketplace for businesses like yours, condition of the assets, depth & strength of management, customer diversity, growth potential, and current industry sales trends. You may have heard that it’s as simple as a multiple of profits/EBITDA, but it’s really far more complex than a simple multiple to get the most appropriate (and often most lucrative) price and best terms (contrary to what you may hear in Wall Street, very few businesses sell for all cash).
Once an acceptable sale price or range is determined, the business intermediary will create a Confidential Business Summary about your business. Depending on your industry, this may include an Executive Summary of the business, management organization chart/personnel descriptions, facility specifications, sample marketing pieces and a summarized financial statement along with tax returns and/or other financial documents to verify the numbers. When completed, this will be the primary document to introduce the business to prospective buyers after they have signed a Non-Disclosure or Confidentiality Agreement.
This brings us to another great aspect of a business intermediary: Confidentiality. This is extremely important. Every time your business intermediary locates a potential qualified buyer, before disclosing any specifics about your business (including its name), they will have the prospective buyer sign a Non-Disclosure or Confidentiality Agreement. The document will cover many points including restricting the buyer from discussing with anyone that your business is for sale, and not allowing them to speak to or solicit your employees. This document protects you and your business.
Now that the business has been evaluated, a sale price determined and a Confidential Business Review Package created, your business intermediary will begin marketing the business. Finding prospective buyers, especially qualified ones, is one of the largest challenges to selling any company. Business Intermediaries will use a variety of methods to find qualified buyers. Methods that they will use depend largely on the industry your company is in, the size of the business and the geographic area that the business is located in. Some marketing channels may include working with buyers that the intermediary already has a relationship with who are looking for a business like yours; utilizing online resources made specifically for intermediaries to advertise the company to buyers looking for a business in your industry and price range; and using direct marketing methods to target synergistic or strategic buyers or other existing businesses that your company may fit in with. These are just a few broad avenues for marketing and successful intermediaries have their own proprietary ways of successfully finding qualified buyers, all of which are conducted discreetly and confidentially.
Once a serious, qualified buyer is found, your business intermediary will be there to work with you on negotiating the final purchase price and terms. These are often put into a Letter of Intent that will serve as an outline to the final Purchase Agreement. Ideally, the intermediary can generate multiple potential buyers and create real or perceived competition for the business. This tactic can often result in improved price and terms. Business intermediaries will often assist the buyer in finding financing sources and may have your business pre-qualified with an SBA lender if appropriate. An entire article could be written on financing alone, but suffice to say that an intermediary’s relationships and ability to work with various financing sources (banks, equity firms, private lenders/investors, etc.) is among their greatest assets to you and will open many doors to buyers in need of funding to complete the transaction. Finally, the intermediary will be with you through closing and will have helped to put together a plan between you and the buyer to ensure a smooth, successful transition and continuation of the business.
So for all the expertise, time saved and top sale price and terms attained, what does it cost to sell your business through an intermediary? Typically, business intermediaries are paid a fee which is typically a percentage of the sale price. Many intermediaries will also ask for a small fee upfront. This helps partially offset their costs in business valuation, marketing and advertising while also showing your seriousness and commitment to move forward with a transaction. The upfront fee may or may not be credited to the final fee upon the sale. In most cases, the sale price that a business intermediary can negotiate for your business will be higher than what a sale-by-owner transaction would bring, even after taking their fee into account; this is due to their knowledge, expertise and by maximizing leverage in the negotiation process. [By the way, as of 12/14/10 (and the foreseeable future), we have never charged an upfront fee here at Bandazian & Holden! - NVH]
For many small business owners, the sale of their business is one of their most critical life events; that may only happen once in their lifetime. Having the assistance of a focused professional to manage and lead you through the process all the way to the closing table can make a huge difference in insuring the outcome is consistent with your goals. We hope that you will consider meeting with a business intermediary to discuss your specific company and goals. A good and reputable intermediary will never charge you to discuss your options. We hope that you have found this article helpful and informative. The Carolinas-Virginia Business Brokers Association and its members are dedicated to serving our industry with the utmost integrity, loyalty and customer service.
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This article was prepared by the CVBBA for the purpose of assisting clients and their advisors in understanding the appropriate role and benefits of utilizing a business intermediary to facilitate the successful ownership transition of a small business. The reader has permission to copy and distribute as desired. For further information please go to www.cvbba.com.
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What if the last owner lost their ABC license?
Posted: June 22, 2010 | Author: Nathan Hughes | Filed under: Buying a Business, Legal, Restaurants | Tags: business environment, Restaurants, Richmond, Virginia | 3 Comments »Every once in a while a potential restaurant buyer will ask me about how any past ABC violations may affect the ABC licensing of a new establishment. Here’s a fairly extreme case, but an important lesson to learn (from a RTD article last week, “Former Velvet strip club site can’t sell alcohol“):
Under state law, the ABC Board may refuse to allow a hearing on a license request if a license for that location has been refused or revoked within 12 months.
….
“It is enforcement’s position that without a significant period of time separating the Velvet reputation and clientele from that location, the reopening of a similar establishment will contribute to the reoccurrence of the same issues dealt with in the Velvet hearing,” said Francis J. Monahan, director of the law-enforcement bureau.
Oh…what’s the lesson you say? Don’t mess with the Virginia ABC board! You may not agree with them and it may suck sometimes, but you have no choice but to play by their rules if you want to remain in business.
(I wrote about Sam Moore’s ongoing ABC issues a couple of years ago, too: “Poor, poor, strip club owner…“)
How do you keep a restaurant going?
Posted: March 14, 2010 | Author: Nathan Hughes | Filed under: Buying a Business, Restaurants | Tags: business owners, Restaurants | Leave a comment »The short answer is: “hard work”!
Long hours and a passion for the business are all key to the success of a restaurant. I always tell prospective buyers that are new to the business that it is not just a career, it’s a lifestyle. If you can’t throw yourself entirely into the job, you might want to consider another job.
Take a look at this recent article in the Richmond Times-Dispatch about a day in the life of a restaurant owner, “Hard work keeps fledgling pizzeria going in Henrico“.
Bandazian is in Style this week!
Posted: January 19, 2007 | Author: Nathan Hughes | Filed under: Buying a Business, Company News, Restaurants | Leave a comment »The current issue (1/17/07) of Style Weekly has an article in the Food & Drink section called "Fire in the Belly" that I suggest everyone should read. Go ahead, read it and then come back here. (come on, it’s not THAT long)
Every time there is an article about a business changing hands, usually restaurants, the business broker isn’t mentioned. This isn’t an issue of vainity in wanting to get press coverage, but merely a business matter. I have said for the past couple of months that every time a high-profile restaurant is reported as being sold and we are not mentioned, it just perpetuates the myth that most business sales are made without broker involvement.
The article is right on track about how this activity tends to happen
very quietly — discretion and confidentiality is almost always a
concern with businesses that are currently in operation.
I will be doing periodic press releases for completed business sales going forward, and will put these press releases up as posts here, as well. This article is a great start!
There will be a follow-up posting here to go into some of the other details mentioned in the article, so keep an eye out for it!
Rules for “One-shot Sales”
Posted: December 19, 2006 | Author: Nathan Hughes | Filed under: Buying a Business, General, Marketing, Weblogs | Leave a comment »Or "Embracing the naive prospect" by Seth Godin, the marketing guru.
Seth points out some valuable insights for anyone that sells to a target market of consumers that are making a "once in a lifetime" purchase. (i.e., a DJ for a wedding, or a Realtor that deals primarily with first-time home buyers)
At first, I thought I would be pointing to this mainly for the benefit of other Realtors, obviously with the first thought coming to mind of how I deal with first-time buyers and sellers of businesses and real estate every day. Then I realized that beyond my bubble there are industries that deal with this "naive" type of customer every day, too.
Now "naive" in this sense is not meant to put down anyone, it’s just to acknowledge the experience level of your target market.
Wedding vendors are a great example of this — the wedding process is not something that most people end up going through enough to be experts at it (let’s hope not, at least). It is a crazy time trying to plan it, and even if you have a wedding planner, you still had to pick that person.
Visit Seth’s site and see what he has to say about how to deal with these "naive" consumers. I think his insight was right on track.
I would love to hear how anyone else is dealing with this issue in their own businesses. I submit that this blog is one of the ways that I am addressing it in my business.
Secure the Lease Terms Quickly!
Posted: July 9, 2006 | Author: Nathan Hughes | Filed under: Buying a Business, Weblogs | Leave a comment »I have recently come across an excellent blog written by Peter Siegel, a consultant
in California that deals with a range of small businesses being bought
or sold. When I come across something especially helpful for buyers or
sellers, I will be sure to highlight it here (even if it may be an old
blog on his site).
Of course, I won’t post his entire blog entry here. That would kind of
be cheating on my part, wouldn’t it? I will be sure to give you the
link to the specific blog entry so you can read it in full.
This particular entry has to do with a client of his that moved forward on the due diligence on a deal that was eventually shot down due to the landlord not being willing to renegotiate the lease terms.
I have seen it plenty in the time I have been doing this, as well. Landlords are oftentimes the bottleneck when it comes to the due diligence period. Even if they are willing to work with you (the buyer, seller, or business broker), that doesn’t mean that they will move quickly.
Basically, there is no reason for them to — they already have the space leased. What is the incentive for a landlord to go out of their way to help an owner that is trying to sell their business?
There are some landlords that will move quickly, and some that are more inclined to work with their tenants than others (and conversely, there are some that feel they have no reason to cooperate at all).
When you are buying a business, you need to establish a rapport with the landlord as quickly as possible. If the landlord will not assign the lease, then there is no reason to pursue the deal. The other pieces are equally important, but I would suggest that you start the process with the landlord as soon as you have a signed contract.
***Please, if you are signing a commercial lease, make sure that the lease is assignable. If the landlord wants the authority to approve the assignee (which I would advise landlords to insist), then use the magic words "which consent shall not be unreasonably withheld".
Link: Landlord & Lack Of Follow Up By Business Buyer Kills A Deal.
My client is now out over $6,000 in CPA fees for due-diligence and attorney fees for contract reviews, over 120 hours over a three month period, when he should have pressed harder in the begining (one key item on my checklist for financing clients) to check with the landlord about future lease terms!




