Negotiation Case

Overview of the Negotiation

As a restaurant owner, my goal was to sell the restaurant so that I can go on a sailing trip. I knew that Les Florets is trying to own the restaurants under their license. So they will tend to buy my restaurant as it has been in the business for more than twelve years. Before the negotiation, I set my target price as 200,000 euros, reservation price as 160,000 euros, and BATNA as 150,000 euros. My BATNA is the amount that I need to finish my sailing trip including any repair works for my boat.

After the introduction of both parties, the Vice President of Les Florets (buyer) offered that they will pay 90,000 euros to buy the restaurant. Then I explained the reality of building a new restaurant. According to trade journals and building the restaurant would cost at least 120,000 euros and the land costs at lease 80,000. There will be licensing expenses on top of it. Keeping these in mind, I offered the sale price of restaurant as 250,000 euros. Then the buyer mentioned that the license cannot be transferred without Les Florets so the other party will not pay a huge amount and offered 150,000 euros. As a seller, I countered this offer with 200,000 euros. Then the buyer offered 160,000 euros as a last option. As this is above my BATNA, I wanted to accept but before accepting I raised a point of employment after coming back from the sailing trip. The buyer accepted to ensure employment to me as the restaurant manager and my spouse as assistant manager with a salary of 60,000 euros for me and 40,000 euros for my wife. I see the negotiation was fully under my control throughout the negotiation process.

Findings of my Analysis

The critical factors that I, as a seller, mentioned were real estate price and trade journals' estimated of cost of building a new restaurant is one of the major strengths of seller. The buyer mentioned about nontransferable clause of the license as it cannot be transferred without written permission of Les Florets S.A.

In my previous exercise, I was a little hesitant to counter offer for the first offer made by the other party. One of the reasons is there might be a little bit lack of extensive research and not knowing the facts in detailed. The other reason might be my BATNA was a bit higher as buyer.

With this negotiation experience, I learned that one should do more research and get as much information as possible, understand the facts involved in the situation, and highlight your strengths and other party's weaknesses. This will help the negotiator get better control on the negotiation process.

When I first counter offered with 250,000 euros, the buyer asked me if I seriously want to sell it or not. The buyer thought that my offer was way higher than the market price. At one point, the buyer mentioned "Do you expect that we will transfer the license to