Now, this blog will go against a lot of what I said in the previous blog, because there is no amount of due diligence high enough when it comes to restaurants in locations around the world. It’s harder to consider due diligence when it comes to restaurants in countries where the currency is significantly weaker than your own because it’s hard not only to gauge the profitability factor against competition, but also just as difficult to tell how much of a profit you will make by the end of it.
What may make investing into restaurants even more difficult is when you factor in the tourism aspect of a restaurant, and local laws that surround it. Those who are knowledgeable about international business will know that you cannot purchase property or businesses in Thailand for example without giving up 51% of it. That means you will always need an investor or a trusted partner alongside it who will own the majority. As you can imagine, it’s tricky.
You will need to trust someone on a significant scale to ensure that you will be giving up most of a business, but that is why you only surround yourself with the best and most loyal in investing.
What is more important however is the profitability aspect, and when it comes to restaurants that rely on tourism being consistently good to be profitable, it becomes a minefield to know which you need to invest into. However, I have a little business secret for all investors.
Only invest into restaurants that the locals like going to. When it comes to tourism, restaurants will always be busy during the busier periods. It doesn’t matter about quality. But those restaurants that are busy during the quiet parts of the year are the ones that are consistently profitable and worth your time.