Handling employees, union contracts, and WARN

Build a headcount sheet for every store, pull any collective bargaining agreement out of the file cabinet, and book a confidential intro before you pick a Tuesday to close. Grocery Store Business Broker — the grocery practice of HedgeStone Business Advisors, led by Jason Taken — treats people as a calendar. Silence is not a plan.

Grocery is a labor graph. FMI counted 45,575 U.S. supermarkets in 2024 and published $668,377 average weekly sales per supermarket in 2025. Those figures describe a channel. Your box is a night crew, a closer, and whoever can cut meat without a call. FMI’s 2.1 percent average net profit for food retailers in 2025 is why payroll is the deal. Thin net means a walkout on Monday is not a soft landing.

This page is the seller calendar for employees, UFCW, and the WARN Act. Transition and training is the floor-time page. Selling multiple locations is the recast page when the roster spans boxes. Counsel owns the statute. You own the count.

Build a headcount sheet before you pick a close date

Write every person who worked in the last pay period: store, department, hours, wage, hire date, and whether they are full-time, part-time, or on-call. Grocery headcount is not the office list. It is the closer, the courtesy clerk, the cutter, and the person who only works Sunday. Part-time hours matter when a statute counts employees. Do not let a manager’s memory be the file.

Separate owner hours from hired hours. A supermarket that only works because you are in the meat case seventy hours a week is not the store a buyer can staff. Recast SDE with the labor they will actually hire. State minimum wage is a model input from the WHD consolidated table. Owner “salary” that is unpaid family time reverses on Tuesday. Add-backs that repeat every year are the business. Stop calling them one-time.

Key-person risk is a grocery fact. If you are also the only butcher, the only closer who can lock produce, or the only person the wholesaler will answer, say that. Price it. A buyer who thinks the CIM includes you forever has not bought a store. They have bought a hope. Transition hours belong in the APA. Length is negotiated. This pack does not invent a standard week count.

Federal WARN is a 60-day statute with a 100-employee floor

The federal Worker Adjustment and Retraining Notification Act is 60-day notice for covered mass layoffs or plant closings at employers with 100-plus employees, with defined count rules. Most single-store independents are not WARN-covered. Multi-store or union shops might be. Confirm headcount before you ignore it.

A six-store seller firing the office the week of close should talk to employment counsel, not just the grocery broker. Adding part-time heads across banners can surprise an owner who thought “I have forty people at this box.” WARN counts the employer, not the vestibule. State mini-WARN statutes exist in some places. This pack does not publish those state thresholds. If you are near a federal floor or closing more than one site, stop and let counsel name the statute that actually applies.

Notice is a calendar item. It is not a speech in the break room the night before inventory. If you are covered and you skip the clock, the cost is legal, not rhetorical. If you are not covered, you still have a human calendar: who is offered a job, who is paid out, and who learns from a vendor. Do not treat “we are not WARN” as permission to ghost the crew.

SBA 7(a) can finance a change of ownership up to the published $5 million maximum. Lenders still want a store that opens. A close date that ignores a notice statute is how a loan sits while the floor empties.

UFCW language can outlive the bill of sale

United Food and Commercial Workers is the primary grocery union in many chain stores and some independents. A collective bargaining agreement can dictate successor obligations, wages, and whether a new owner must bargain. None of those dollar scales are invented here. Do not assume an independent is non-union. Read the handbook. Ask. Look at the dues line on the payroll register.

If a CBA is in the building, it is a deal document. Buyers will underwrite the wage scale you actually pay, the benefits, the scheduling rules, and any successor or effects-bargaining language. An asset sale is not a magic wand. Some agreements treat a new operator as a successor. Some do not. Counsel and labor counsel — not a CIM paragraph — read that clause.

Do not invent a wage scale on this page or in a teaser. Point the buyer at the contract and the register. BizBuySell grocery and supermarket businesses sold in 2025 printed a 3.38 average earnings multiple, a 2.66 five-year average for 2021–2025, and a 1.60–3.15 interquartile range. Those figures do not price a union reset. If the recast only works by assuming the buyer can cut the scale, you do not have a recast. You have a fight.

Non-union independents still have customs. Sunday premiums, unofficial department heads, and “everyone knows Maria runs produce” are operating facts. Write them down. A buyer who changes the mix for sport in the first 90 days will also change the schedule for sport. That is how shrink shows up. Read the post-closing 90-day plan after you have a roster the buyer can hire from.

The people who know the cut room are the going concern

Inventory at cost is a separate check. The people who can count it, rotate it, and not kill the meat case are why the check is worth writing. Shrink is a labor story as much as a lock story. A crew that learns they are for sale from a DSD driver will not protect your last month.

Confidential outreach exists so the front end does not learn from a public ad. Read how to sell a grocery store confidentially. Employees, vendors, and shoppers will announce the sale if you let a buyer wander the aisles with a clipboard. An NDA should bar approaching staff without your consent during marketing. Buyers who “just stop by” after signing one are how small-town files die.

Selling to a family member or employee still needs a real price and a real note. Soft language creates hard lawsuits. A manager-buyer who already runs the floor is a gift and a conflict. Write the job offer and the purchase as two documents.

Owned real estate is a second asset. Recast the store on market rent, then price the building. A related-party rent that juiced earnings will reverse when a third-party buyer staffs the same box. Labor and occupancy move together. Revenue multiples hide both. Use the 0.43 BizBuySell 2025 grocery revenue multiple only as a cross-check, then return to SDE.

Accrued pay, benefits, and the labor you will actually hire

List vacation, sick, and PTO balances. List who is on health, who is seasonal, and who is a leased employee from a payroll company. Asset-sale buyers often hire who they want and leave accrued time with the seller — until a state wage law or a CBA says otherwise. Do not guess. Put the balances on a schedule. Decide who pays. Write it.

Payroll tax and workers-comp experience can follow a stock sale in ways an asset sale does not. Tax clearance still belongs in escrow. Successor-liability practice can still exist after UCC Article 6 died. Holdbacks exist because grocery has shrink and successor tax risk. Unpaid wages are a reason for a holdback, not a speech.

Working capital after close includes the first payroll. A buyer who funds inventory and forgets Friday’s checks will bounce the week. Point them at how much money you need. You do not want that bounce on a note you still hold.

If the buyer is using SBA 7(a), expect questions about who stays and what the labor model is after you leave the cut room. DSCR is annual cash flow after an honest recast, divided by annual debt service. Hope is not a ratio. Unpaid owner weeks are not a staffing plan.

Job-offer letters from the buyer are a close document when the going concern depends on named people. Write who will be offered a job, at what department, and whether the offer is at-will or under the CBA. Do not promise the crew that “everyone stays” unless the buyer has signed that. Do not tell the buyer the crew is interchangeable if only one person can close produce. Transition and training periods are floor time in meat and produce, not a phone number.

A first-time buyer without perishable hours is a staffing risk you will feel if you carry a note. Buying as a first-time owner is honest about that gap. Restaurant hours can substitute if the buyer says so on the first call and brings a partner for the cut room. Capital without perishable skill is how lenders stall and how you inherit a dark store.

Tell the crew on a calendar, not in the vestibule

Pick a sequence: NDA and qualified buyer first, then landlord and wholesaler when you need consent, then a planned conversation with department leads, then the floor. The exact day is yours and counsel’s. The rule is that vendors and shoppers should not be the messengers. A lottery field rep or a beer driver will tell the courtesy clerk if you let them.

Write what you will say: the store is being sold as a going concern, jobs will be discussed by the incoming operator, you will stay through a written transition if that is the deal. Do not promise that everyone keeps every hour. Do not promise that no one does. A lie in the break room becomes a lawsuit and a shrink problem.

Comparing offers means cash at close, note terms, inventory treatment, license risk, and whether the buyer can staff the week. A higher headline from a tourist who cannot hire a cutter is not a better offer. It is a darker Monday.

Bring the roster to a confidential intro

Mark the seller playbook and the SDE worksheet. Recast labor. Attach the headcount sheet. Attach the CBA if one exists. Attach a one-page WARN note: covered or not, and who decided. If you are near the federal floor, stop guessing and call employment counsel before you date the APA.

Licenses still run on agency calendars. SNAP does not transfer. Alcohol is a class, a quota, or a control-state product. WIC, lottery, and tobacco are other counterparties. People are the calendar that makes those files worth closing. Working with attorneys and CPAs should include employment counsel when the roster or the union says so.

When the roster is marked, schedule the confidential intro. Bring three years of P&Ls, the headcount sheet, any CBA, and a one-sentence read on who the store cannot open without. If you have not counted part-time heads yet, say that and bring last month’s payroll register instead. A register beats a memory. That is enough to start packaging a close the crew can survive.

How a buyer would price Handling employees, union contracts, and WARN

Price language for Handling employees, union contracts, and WARN is (recast SDE x a defendable multiple) + inventory at cost, plus or minus lease and license risk. The table is one consistent example for this URL.

Input or output	Illustrative figure
Weekly sales (illustrative)	$92,000
Annual sales	$4,784,000
Recast SDE	$248,768 (5.2% of sales)
Inventory at cost	$239,200 (~20 turns)
Occupancy check	$110,032 / year (2.3% of sales)
Low going-concern	$774,051 at 2.15x SDE + inventory
High going-concern	$910,874 at 2.70x SDE + inventory
Sketch DSCR on a note	1.44

Inventory is cash at close, not a multiple. Confusing the two is how sellers over-ask and buyers under-cash the wire.

Bring three years of P&Ls, weekly sales, and the lease abstract to the intro call. Jason will tell you whether this band is even in the conversation.