When a business is advertised for sale as a lease, this means that it is the business only for sale and not the real estate which it occupies. This is how very many businesses are run in today’s commercial environment; however it does cause some confusion in the accommodation industry. The lease document is critically important in the purchase of any business which operates from commercial premises. The terms of the lease are most important in underpinning the value of the business asset being sold (chattels and “goodwill”) but it is not where the value lies.
The value of the business is determined by its profitability, after all outgoings, including rent for the land & buildings. For more details on this aspect, please see Feasibility of Motels or Financial Returns.
