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A Hard Sell Made Easier

A Hard Sell Made Easier

Written By Joel Emery

On March 1, 2021

282-284 East Ave.
Webster Groves, MO

Hilliker Corporation Commercial Real Estate St. Louis 314-781-0001Retirement is supposed to be a dream come true for men and women who have spent their adult lives building a career or business. But sometimes, pulling yourself completely out of the working world can be nothing short of a nightmare.

After nearly 60 years working for and running the family business, Marshall Scott Enterprises, 72-year-old Allan Scott was eyeing his own retirement. The company owned and operated fast food restaurants, particularly KFCs, since Allan’s father started bought the first franchise in 1963. In recent years, Allan has been gradually divesting himself of the company’s various properties to free up time and energy to spend with his family and travel with his wife. But the process has not been easy. Many of the buildings in question are as old or older than he is. And anytime someone puts up a long-owned structure or piece of land for sale, the seller encounters rules and regulations that simply didn’t exist when they first bought them decades ago.

“When we first bought these places, banks didn’t ask for things like environmental surveys or studies,” says Allan. “You walk through a building you’ve owned for years and look around, all you see are little things that you never noticed before that could end up costing you money or, worse, derail the entire sale.”

This scenario became reality last year with one of the last remaining properties, 282 and 284 East Ave. in Webster Groves. Allan and his dad bought the building in 1976, and since then, the company had used the 50-year-old, 10,000-square-foot space as a warehouse and office. But no sooner had Allan cleaned out four decades of old KFC stuff to prep the space for market, than he started to notice little things that might jeopardize any would-be sale—and his impending retirement.

Fortunately for Allan, he wasn’t facing this challenge alone. He’d enlisted Hilliker to help.

One career, one company

Allan Scott first went to work behind the counters of his father’s KFC stores when he was in 9th Grade. It was his first job—and would be the only employer/company he would ever know.

After graduating from the University of Missouri in 1971, he came back to help run the chain. Five years later, they purchased the property in Webster Groves. This was before KFC had set up a national distribution system for all of its franchisees, and each individual owner did their own warehousing. The Scotts would buy things like shortening and paper goods by the truckload and store them in the Webster Groves warehouse.

In 1988, Allan inherited the company, Marshall Scott Enterprises, when his dad officially retired (if not in actual practice—as Allan says: “First-generation owners don’t just walk away”). Around this same time, KFC Corporate had established a nationwide network of supply, so Allan converted half of the Webster Grove space to office and miscellaneous storage and decided to rent out the other half to various tenants as an additional source of income.

When Allan took the reins, Marshall Scott Enterprises consisted of 17 stores—12 KFCs and five TJ Cinnamon Bakeries—from Washington, Mo., to Sullivan, but mostly in St. Louis County. That number has always been in flux, but in recent years, it has gone down steadily as Allan has begun thinking toward his own retirement. For him, retirement has never been a future date circled months and years ahead on some wall calendar, it’s been more a series of smaller, more immediate decisions. Basically, each of these choices comes down to: “Do I need this headache or not?”

“The fast-food business is not easy,” says Allan. “The conundrum is that when sales are fantastic and economy is humming, we can’t find employees. But when sales are lousy, we don’t need as many employees and we end up laying them off.”

Another continuing challenge specific to KFC is that every 10 years, corporate requires each store to undergo a full update and remodel. In 2017, several of Allan’s remaining outlets were facing the 10-year renewal, which would’ve required the company borrowing money that would essentially take another decade to make back.

“It was a perfect time to ask myself: ‘Do I want to be in this business?’” says Allan. “I didn’t.”

Allan came to a similar crossroads in 2020, when their tenant at 282-284 East Ave. in Webster Groves decided not to renew their lease. Did he want to go to the hassle of finding another tenant? This time, Allan’s wife answered for him.

“She said, ‘You don’t want that headache,’” says Allan. “Like a good husband, I listened to her.”

One last headache and a broker with the salve

And like a smart client, when it came time to sell the Webster Grove property, Allan listened to his broker, Will Aschinger.

A. William AschingerAfter three months of clearing out the remnants of a lifetime in business—tables, chairs, signage, repair parts, and records dating back to 1972—Allan called Aschinger, who was recommended by the broker who had helped him sell many of the KFC locations. And it’s a good thing that Allan did. Almost immediately, unforeseen complications arose in preparing the property for sale.

For instance, there was an old rail-road-tie retaining wall that separated Allan’s land from a neighboring indoor soccer club. The wall was clearly on the verge of collapse, but Allan had always assumed that the entire wall was on the soccer club’s property—until a surveyor found that Allan actually owned and was therefore responsible for almost 25 percent of it. Aschinger helped Allan work through the process of clarifying who was responsible for what, getting estimates, and negotiating a reasonable (and in Allan’s opinion, favorable) amount to be deducted from the sale price.

Another issue arose because neighboring 286 East Avenue had once housed an HVAC company that would have used a degreasing chemical that had been deemed hazardous. Any sale would of 282-284 East Avenue would’ve required an environmental study to ensure that chemical wasn’t present. That study, which certainly wasn’t required when the Scotts bought the building in 1976, was going to cost Allan $6,000—until Aschinger suggested that the current owner of 286 might have had a similar study done when they bought the property just a few years before. They had commissioned a study, and their bank emailed Allan a copy.

“Will is one of the most straight-shooting guys I’ve ever known,” says Allan. “Without his guidance, I’m not sure I would’ve made it through this sale.”

But he did, bringing a price of $590,000, and perhaps more importantly for Allan, getting him one step closer to his dream of complete retirement.

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