Restaurant Valuations

How Restaurants Are Valued

Most profitable independent restaurants sell for a multiple of seller’s discretionary earnings (SDE), the cash flow available to a single owner-operator after normalizing for owner salary, perks, and one-time costs. The multiple depends on lease strength, trends, concept, and risk. Restaurants without meaningful profit are often valued on their equipment, build-out, license, and the value of the lease to a new operator.

What Our Restaurant Valuation Covers

• Recast earnings: calculating SDE with add-backs buyers and lenders will accept
• Lease analysis: remaining term, options, occupancy cost, and assignability
• Sales & margin trends: year-over-year growth and prime-cost performance
• Comparable sales: recent restaurant transactions for similar concepts and markets
• Assets & licenses: furniture, fixtures, equipment, and liquor license value
• Franchise considerations: transfer fees, remodel requirements, and remaining term

When to Get a Restaurant Valuation

Before you list, before you respond to an offer, before a partner buyout, before your lease renewal, or simply to understand where you stand. Valuations are confidential and carry no obligation to sell.