How do I check whether a crepe, waffle or churro shop is profitable before buying?
Ask the seller for the financial statements and sales by item, then look at how sales move across seasons and weekdays, how much depends on foot traffic, what ingredients and toppings cost against what each item sells for, what the owner’s own labour covers and how heavy the rent is. Your accountant should read the statements with you.
Dessert shops can look busy and still leave little behind. The only way to know is to read the seller’s own records and ask questions the records raise. This page lists what to look for in a crepe, waffle or churro business. It cannot say whether a particular shop is a good one. Your accountant reads the statements and tells you what they mean.
Seasons, weekends and foot traffic
Ask for sales by month, and by day of the week if the seller keeps them. Desserts often swing with weather, school calendars, tourism and mall traffic. Ask what happens when a nearby anchor store closes or construction blocks the entrance. If sales lean on a few busy weekends or events, ask how the owner covers the slow stretches and what the shop does then.
Ingredient and topping costs by item
Batter is cheap, but fruit, chocolate, spreads and ice cream add up. Ask for sales by menu item alongside purchase invoices, then see whether the best sellers are also the ones that leave the most behind. Ask about waste, supplier changes and how the seller handles price rises from suppliers. Compare invoices with the statements to see that they tell the same story.
Owner labour and rent
If the owner works every shift without a wage, the statements may overstate earnings. Take that question to your accountant. Look at the lease too: how rent is set, whether it rises with sales and how long it runs. A related page covers checking a food franchise before you buy.
Related reading
12 pages on the same subject, grouped by topic.
Buying
- Expert answerHow can I check whether a food franchise is profitable before I buy it?
- Expert answerHow does seasonality affect buying an ice cream shop?
- Expert answerWhat should I check before buying a donut shop?
- Expert answerWhat should I check before buying a juice bar?
- Expert answerWhat should I check before buying a board game cafe?
- GuideHow do I buy a cafe in Canada?
- Expert answerHow do I find a crepe or waffle shop for sale?
- Expert answerHow do I find a churro business for sale?
- Expert answerShould I buy an existing crepe or waffle shop or start one?
- Expert answerFranchised or independent crepe or waffle shop: what should a buyer weigh?
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Business Development Bank of CanadaGovernmentWhat are financial statements?
- 03Statistics CanadaResearch dataMonthly survey of food services and drinking places
- 04Restaurants CanadaIndustryRestaurants Canada - The Voice of Foodservice
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