Is the closure of your favorite bar or restaurant imminent?

[Leaver]

 

Another price drop.  

 

When will the price meet the market?  Is there a market?   

 

https://www.bahtsold.com/view/pattaya-s-number-1-farang-restaurant-is-for-sale--387708

 

[scubascuba3]

3 hours ago, Leaver said:

 

Another price drop.  

 

When will the price meet the market?  Is there a market?   

 

https://www.bahtsold.com/view/pattaya-s-number-1-farang-restaurant-is-for-sale--387708

 

thing is it won't be a "gold mine" when a muppet buys it and drives it into the ground

Edited August 26, 2021 by scubascuba3

[Leaver]

On 8/27/2021 at 4:39 AM, scubascuba3 said:

thing is it won't be a "gold mine" when a muppet buys it and drives it into the ground

 

I doubt it's a "gold mine" even when busy.  The sale of the business, pre covid, is where the "gold" was.  

 

The only one driving the business into the ground would be the Thai landlord.  

[scubascuba3]

24 minutes ago, Leaver said:

 

I doubt it's a "gold mine" even when busy.  The sale of the business, pre covid, is where the "gold" was.  

 

The only one driving the business into the ground would be the Thai landlord.  

If you remember pre covid a lot of places couldn't compete, the Retox places were in a tail spin before covid partly because of room rental changing to monthly. HH was the busiest place in town, you had to go upstairs to get a seat, the problem will be the buyer will screw it up

[Leaver]

58 minutes ago, scubascuba3 said:

If you remember pre covid a lot of places couldn't compete, the Retox places were in a tail spin before covid partly because of room rental changing to monthly. HH was the busiest place in town, you had to go upstairs to get a seat, the problem will be the buyer will screw it up

 

No argument from me, it's popular, and was busy.  The cheap eats are the bait for the business sale.  If it's profitable, why's he selling, and it's not due to ill health.  

[Olmate]

10 hours ago, Leaver said:

 

No argument from me, it's popular, and was busy.  The cheap eats are the bait for the business sale.  If it's profitable, why's he selling, and it's not due to ill health.  

If he wants to sell,suggest he stops bleating to customers about how bad things are!

[scubascuba3]

1 hour ago, Olmate said:

If he wants to sell,suggest he stops bleating to customers about how bad things are!

to be fair, everyone does that, lockdowns, lack of vaccines etc etc

[chrisandsu]

16 hours ago, scubascuba3 said:

If you remember pre covid a lot of places couldn't compete, the Retox places were in a tail spin before covid partly because of room rental changing to monthly. HH was the busiest place in town, you had to go upstairs to get a seat, the problem will be the buyer will screw it up

Even in its busiest times it hardly makes money . Low prices mean you need a massive turnover of customers . Restaurants have very low profit margins even at the best of times . 

[Espanol]

2 hours ago, chrisandsu said:

Even in its busiest times it hardly makes money . Low prices mean you need a massive turnover of customers .  

Thais know how to get a profit: you just need to raise the prices.

 

If even that way you don't get a profit, just increase them even more.

 

Easy. ????

 

[scubascuba3]

3 hours ago, chrisandsu said:

Even in its busiest times it hardly makes money . Low prices mean you need a massive turnover of customers . Restaurants have very low profit margins even at the best of times . 

how do you know it hardly makes money in the busiest times? you seen the accounts?

[GStewart70]

As far as i am aware, Retox had a number of partners with businesses in the UK.

I think one had a heavy plant business doing airport runway surfacing etc.

To be honest i just think they took the view, why keep a business a float when nobody knows the visibility of earnings going forward.

Everyone knows Pattaya demographics are changing.

I used to have brunch in Jasmin's on Pattaya Klang every morning. Knew the French boyfriend/ husband pretty well.

He said 6 years ago it would have been 90% farang/10% asian, now it's reversed.

Young, trendy, asian small groups and families.

I think Retox's owners made an astute commercial decision. If they want another hobby, they can buy another bar if/when normality returns.

 

Edited August 29, 2021 by GStewart70
Edit

[Leaver]

1 hour ago, scubascuba3 said:

how do you know it hardly makes money in the busiest times? you seen the accounts?

 

If you take into account the purchase price, and refurbishment costs, how many cheap eat meals would you have to sell a day to make that money back, on top of monthly rent and other operating costs?  

 

If it's profitable, why has the asking price dropped from something like 8 million baht to 4 million baht?  

[scubascuba3]

14 minutes ago, Leaver said:

 

If it's profitable, why has the asking price dropped from something like 8 million baht to 4 million baht?  

We were talking pre covid, now it's covid and no one here so quite obvious why it's dropped, like condos, houses and rent

[Leaver]

8 minutes ago, scubascuba3 said:

We were talking pre covid, now it's covid and no one here so quite obvious why it's dropped, like condos, houses and rent

 

Why even sell pre covid, if it's profitable?  

[scubascuba3]

2 minutes ago, Leaver said:

 

Why even sell pre covid, if it's profitable?  

Make money? plus someone said he had Diabetes type 1, if true maybe some truth in his health being reason for sale. To be fair he is good at setting these places up and that's why he's done at least 3, probably hassle running a busy place

[Leaver]

2 minutes ago, scubascuba3 said:

Make money? plus someone said he had Diabetes type 1, if true maybe some truth in his health being reason for sale. To be fair he is good at setting these places up and that's why he's done at least 3, probably hassle running a busy place

 

Fair play.

 

I don't know him, personally.  It's common knowledge he's flipped a few restaurants.  I simply suggest the profit comes from flipping them, not from selling cheap eats in them. 

 

He'll be stuck with this one.  Why would someone buy it, when they can take over one of the vacant restaurants, dealing directly from the Thai landlord, and then offer cheap eats, if that's their business model? 

[chrisandsu]

7 hours ago, scubascuba3 said:

how do you know it hardly makes money in the busiest times? you seen the accounts?

Read the add . Supposedly it’s still the busiest place in Pattaya and just paying the running costs . What do you think the profit margins are on each plate they sell ? At those prices you need to sell thousands a day . It’s a lot of work for very little return . 

[scubascuba3]

6 hours ago, chrisandsu said:

Read the add . Supposedly it’s still the busiest place in Pattaya and just paying the running costs . What do you think the profit margins are on each plate they sell ? At those prices you need to sell thousands a day . It’s a lot of work for very little return . 

Is the busiest place still. So you're guessing, no idea of costs, margins, you're just plain negative

 

[Leaver]

7 hours ago, scubascuba3 said:

Is the busiest place still. So you're guessing, no idea of costs, margins, you're just plain negative

 

 

We can focus on the costs we do know.

 

80,000 baht a month rent.

 

Purchase price 1 year ago was 7,000,000 baht.

 

Length of lease would now be 7 years.  (8.5 in the advertisement posted 18 months ago)  

 

The owner states key money has been paid.  I gather that is for the entire length of the lease, so that is not an ongoing cost.  

 

From this point, we would have to make assumptions, or guesses, but we can be conservative.

 

The average price of a meal in HH is around 120 baht.  There are cheaper meals, and more expensive meals.  It is unknown if the majority of customers order the cheaper meals, or more expensive meals.  I would suggest more cheaper meals are sold,  but 120 baht wouldn't be too far away from the average.  

 

The owner has stated 400 meals a day were turned over, pre covid.  Unknown if that is true, but we can use that figure anyway.

 

7 million baht / 7 years = 1 million baht a year.

 

1 million baht / 12 months = 83, 300 baht per month to recoup the purchase price on a monthly basis.

 

83,000 baht + 80,000 baht monthly rent = 163,000 baht a month for paying the rent and recouping the purchase price.  

 

More assumptions need to be made in relation to staff, and their salaries, but being conservative, say 10 staff, at average 9,000 baht a month salary.  

 

9,000 baht x 10 = 90,000 baht a month in salaries.

 

163,000 baht + 90,000 baht = 253, 000 baht per month for the larger costs and recouping capital outlay.

 

253,000 baht / 30 days = 8,400 baht a day for rent, salaries, and recouping capital investment.

 

The biggest point of debate will be how much the ingredients cost for each average meal.  Some meals will have more expensive ingredients, and some will have cheaper ingredients.  

 

Working backwards, and just to cover the above costs, with no profits:

 

8,400 baht per day / 400 meals per day = 21 baht must be made per meal, minus the cost of ingredients. 

 

If the average meal is 120 baht, that means the ingredients must cost less than 99 baht, just to cover the above costs.  This is completely possible for many of the meals offered, and when buying in bulk.  However, not 1 baht of profit has been made yet.

 

Also, it must be noted the above figures do not include electricity, water, cleaning products, internet, licenses, "tea money" and repairs and maintenance, stock loss etc.

 

Further to this, the above figures also do not take into account selling under 400 meals a day, which compounds onto every other day in the calendar.   

 

Certainly, at a selling price of 4 million baht the figures change, but then again, the restaurant is not turning over 400 meals a day, due to no tourism, with none on the horizon.

 

I think the above shows the fine margins involved, and question if it's worth the risk, and all the work involved. 

 

This is just a "back of a napkin" scribble, but happy to debate the assumptions / guessing.

 

Edited August 30, 2021 by Leaver

[chrisandsu]

17 hours ago, scubascuba3 said:

Is the busiest place still. So you're guessing, no idea of costs, margins, you're just plain negative

 

Is reading an issue for you ? It said it in the add . 

[scubascuba3]

7 hours ago, chrisandsu said:

Is reading an issue for you ? It said it in the add . 

what the ad said "it hardly makes money in the busiest time"? think you need to read the ad again. How did you work that out?

[chrisandsu]

4 hours ago, scubascuba3 said:

what the ad said "it hardly makes money in the busiest time"? think you need to read the ad again. How did you work that out?

Your hard work . The add  clearly said and you agreed , the add said it’s still the busiest restaurant in Pattaya but is only paying its bills and keeping up with maintenance . That is saying there is NO profit or the add would say it’s PROFITABLE. 

[scubascuba3]

On 8/31/2021 at 9:24 AM, chrisandsu said:

Your hard work . The add  clearly said and you agreed , the add said it’s still the busiest restaurant in Pattaya but is only paying its bills and keeping up with maintenance . That is saying there is NO profit or the add would say it’s PROFITABLE. 

We were talking pre covid , move on, clearly they like everyone struggle during covid

[Leaver]

On 8/31/2021 at 12:00 PM, scubascuba3 said:

We were talking pre covid , move on, clearly they like everyone struggle during covid

 

I agree, but for a business that relies on small margins, but high turn over, how long into "post covid" will it be before profitability will return?  

[Leaver]

Gogo with a hotel in Walking Street.  

 

https://www.bahtsold.com/view/pattaya-walking-street-gogo-bar-and-hotel-199899

 

[Leaver]

 

Called into Bryan Flowers' Youtube channel to see what was happening with Soi 6.

 

He does have a dry sense of humour.  How he manages to keep a straight face while delivering these gags is beyond me.  

 

Anyway, one of his Thai landlords has contacted him to say 1.5 million baht of key money is due.  What planet are they living on?  As he alludes to, they must be living in a cave in Pakistan, totally devoid of current, and ongoing, world events.  

 

I suspect there will be similar demands in the near future to other business owners, as leases and key money fall due.  

 

Does a tenant pay, if they have the capacity to do so, or walk away?

 

 

[peeglen]

6 hours ago, Leaver said:

Does a tenant pay, if they have the capacity to do so, or walk away?

They'll pay. I appreciate the man's sense of humour and his bitterness, but he (and the foreign investors) will pay because of sunk cost fallacy and having nowhere else to go.  They've invested so much in promoting and building up Soi 6 that they won't walk away. If they do, the shops will sit empty for a spell and new tenants will move in when (and if ever) the business climate is right. 

 

The comment about the tenancy "contracts" reflects a bit of optimism, because this man isn't inexperienced.  Go to court with a wealthy, connected Thai land owner and let us know how it goes; not well would be my guess.  Does anyone here remember what happened with The Haven hotel? Wealthy land owner VS upstart Issan girl (her financier didn't make enemies).  Landowner went scorched earth on upstart and The Haven was reduced to rubble, a loss to many of us who loved the place. 

[scubascuba3]

3 hours ago, peeglen said:

They'll pay. I appreciate the man's sense of humour and his bitterness, but he (and the foreign investors) will pay because of sunk cost fallacy and having nowhere else to go.  They've invested so much in promoting and building up Soi 6 that they won't walk away. If they do, the shops will sit empty for a spell and new tenants will move in when (and if ever) the business climate is right. 

 

The comment about the tenancy "contracts" reflects a bit of optimism, because this man isn't inexperienced.  Go to court with a wealthy, connected Thai land owner and let us know how it goes; not well would be my guess.  Does anyone here remember what happened with The Haven hotel? Wealthy land owner VS upstart Issan girl (her financier didn't make enemies).  Landowner went scorched earth on upstart and The Haven was reduced to rubble, a loss to many of us who loved the place. 

When you say upstart Isaan girl, wasn't that Steve that owned that hotel restaurant? moved to Soi Lengkee, now closed for sometime

[scubascuba3]

10 hours ago, Leaver said:

 

Called into Bryan Flowers' Youtube channel to see what was happening with Soi 6.

 

He does have a dry sense of humour.  How he manages to keep a straight face while delivering these gags is beyond me.  

 

Anyway, one of his Thai landlords has contacted him to say 1.5 million baht of key money is due.  What planet are they living on?  As he alludes to, they must be living in a cave in Pakistan, totally devoid of current, and ongoing, world events.  

 

I suspect there will be similar demands in the near future to other business owners, as leases and key money fall due.  

 

Does a tenant pay, if they have the capacity to do so, or walk away?

 

 

He should have stopped paying rent when covid started, that was the big mistake, it was clear to me it had an unknown end date

[kinyara]

^ You'll know things are getting really bad when his bar managers start doing livestreams for free drinks. For a guy who on more than one occasion talks about complaining negative foreigners in Pattaya, he doesn't half do his share of whinging and whining now that the business climate is not favourable for himself. . He could just walk away, it's not like it's his only business but disregarding the ego angle I guess the issue is if it's a Soi 6 bar it goes against his monopolistic strategy to even give up one.