Questions about a bar in the sosua cabreta area

I’m looking at a bar for sale in the  Cabretta beach area, what  suggestions would you give, it’s existing with a lease, I’ve ask for tax returns, profit and los statements, they have a pos system so I ask for a items sold report, lease information and hotel  occupancy report since the lease is currently in an hotel along with hotel size information, I’m aware of needing to do a LLC or cooperation and the strange employment laws, what am I missing in your opinion also If I purchase the business am I required to keep the existing employees or if I don’t take them am I required to pay separation or is the previous owner liable, any input you can give is appreciated

Pete

I had a friend buy a business that had done a good job of cooking the books.  Find someone (or you) who can spend nights at intervals at the bar watching business conducted and then compare what was reported through nightly POS vs what was actually observed. 

My friend got tricked because he of course was also looking at liquor bought for the business, which was being shoveled off into another business.

Good luck,

JR

How long have you lived here? Buying any business here will be challenging.

Never ever keep the old employees and take on their liquidations.  Have the old owner pay them all out completely. Then you hire them new if you choose to.  Make sure you have proper labor contracts in place.

You want your own corporation and you want to make sure you are not taking on any debt or any tax liabilities of any kind. 

Have a good Lawyer check all leases etc.

Don't trust anyone 100%.

Are you going to be running it? If so you need residency as well. If not you better have someone you know really well running things!

Getting rid of employees if you decide on not keeping them you have to pay to get rid of them.  It’s not that much.   Someone working there for approximately 4 years I think you have to give them approximately 500. US dollars.   If you hire someone if you terminate them it must be before 3 months.  Otherwise you have to give them something.   Also at Christmas time you have to give each one a months salary.   

I am also still thinking of buying a restaurant bar.    But Please do your research, demographics., etc.   How many tourist come to the restaurant.    Don’t believe the previous owner even if they are not Dominican.   If the price of the business is too cheap to be true it probably is.   Go there everyday for at least a week.    And then again for the beginnings of the month.    Don’t let anyone know you are interested.    Speak to the employee.       Patrons.   
If you ever want to talk privately.   Send me an email. 
Kkouture01[at]gmail.com

Thank you, great idea, appreciate the guidance

I have been asking myself from the construction of housing end of the equation but wonder if it might be equally applicable in the hospitality industry as well.

Question:  If hiring legal expertise to accomplish the sale would it also be prudent to consider a mechanism to establish a contractor (ie, a person who would have all of the labor issues) and pay him on a profit sharing/piece of the action basis so that all of our interests are aligned?

I concede in advance that that idea could be unworkable and if so, I'd really appreciate knowing why.
Kind regards,

JR

By all accounts bars open up and close down all the time in the mentioned towns and hearsay was that Cabarete beach was the quietest seen for a long time and a well known drinking hole has gone down as a result. Don't rely on me though and I do hope some long time residents chip in for a factual latest update.

A general observation is that operating bars and the like in DR seem to all end in misery and even the longer term ventures seem to struggle.

Try and find a niche product to tap into the tourist market if that is your aim. Bars are not a Dominican thing. You find them where there are tourists and very few elsewhere and they rely on tourists alone in general plus the local expats. The locals drink in colmados, bodegas, car washes and the aptly named drinks and at weekends primarily. DR doesn't have a bar culture as such throughout the land.

When it comes to labor law there is some bad info already here. I have employees and have managed employees foremost of.my 15 years here. Liquidation IS a big deal and can run thousands of dollars. It is a calculation based on time of employment and most recent monthly wages.  Do not take on any previous companies liquidation or employment issues! 

As to bars, good points, they open and close regularly.   Make sure to do your homework!

I will often suggest a good Lawyer ND depending on the project a good Accountant to verify what you are buying.

For what it's worth, I have been in conversation with a couple bar owners in Sosua, and both have said income is down 30+% this year, and 25+% last year.  Neither one of them turn a profit, they have other income, and the bars are something to socialize, network, and stay busy for them.  I am by no means an expert, still a newbie here, but I agree that the bar scene may not be your best bet.

I say again.   , low overhead & Very  smart common sense, will obviate the so called competition.  Only idiots don't research the demograhics, define their market & agrssively pursue it.  Sitting on their lazy asses, expecting to allure business because of low prices & sexy barmaids only shows their ignorance.  Local or expat have the same lack of the reality of the business.  Ego has no place in this. Take from the success of others, learn from it, twist it to work for you.  I live for the challenge to prove the ones who say it can't be done spend their money in my places.  Doubt it? PM me for documentation.  I'm just an arrogant curmudgeon who has fun farting up wind.

Pete.  What bar is it? It is not like other people are going to rush in and buy it out before you decide.

I have been here for going on 16 years and played music in many of the bars that had entertainment on Cabarete Beach, a number in Sosua and in between the two as well. 

Some bars are still there.  Some have changed hands more than once and some are still around after that period of time

The high airfares with bad connections, a lack of inexpensive hotels, and all of the tourism focus going to Punta Cana are factors that  have caused business to decrease considerably over time. And I mean business is way down.  Do keep that in mind.

Severance pay is a big deal.  Not just when you purchase but when you have to deal with employees that work well for a few months and then don't so you try and let them go and get hit with paying severance. 

Other advice to actually be at the place and see what is really going on is very important.  Keep in mind if you do that right now, it is the high season.  Such as it is.

Wait until May, June & July when the prices will be way down & the losers want out.  The view from behind the bar is vastly different from the customer side.  The best advice comes from many years of behind the bar & over the stoves.  Usually the customer advice pertains to their preferences.  Their opinions matter when many of them concur. For example:  I had daily lunch & dinner specials.  When there were multiple requests for that special, I would add it to the menu & remove the slowest selling item from the product mix.  An open mind learns more than a closed one. Wish you well, go slow & use the three "Ls".  Look.... Listen.... Learn.

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