It’s a declining market, which isn’t very appealing from an investment perspective - but one that’s unlikely to ever fully vanish.
A key question to find out is: why are they selling? If it’s because the current owner is retiring, that’s not an issue. If it’s because they no longer have confidence that it’s viable business in the long run, that’s a big red flag. And you should also be asking why the big chains haven’t swooped in and bought up these two theatres. What do they know that you don’t?
You also need to look very closely at that loan - not just the the terms and obligations, but also the reasons behind it. Was that a big investment in the business that added real value? Was it to keep the business afloat? How much has the previous owner taken out since that loan was made (i.e, have they loaded up the business with debt, taken a load out in dividends, and are now trying to sell the remnants on to you)?
It’s a declining market, which isn’t very appealing from an investment perspective - but one that’s unlikely to ever fully vanish.
A key question to find out is: why are they selling? If it’s because the current owner is retiring, that’s not an issue. If it’s because they no longer have confidence that it’s viable business in the long run, that’s a big red flag. And you should also be asking why the big chains haven’t swooped in and bought up these two theatres. What do they know that you don’t?
You also need to look very closely at that loan - not just the the terms and obligations, but also the reasons behind it. Was that a big investment in the business that added real value? Was it to keep the business afloat? How much has the previous owner taken out since that loan was made (i.e, have they loaded up the business with debt, taken a load out in dividends, and are now trying to sell the remnants on to you)?