BreakThru Realty

How Are Restaurants Valued?

Two restaurants with the same sales can sell for very different prices. The earnings, the lease and the licences explain almost all of the difference.

Reviewed by Tyson E. Sam, Founder and Broker of Record, BreakThru Realty, Florida License 3565210

Request a Confidential Business Valuation · (786) 914-1017

Profitable Restaurants: Priced on Earnings

A restaurant that pays its owner well is priced on a multiple of seller's discretionary earnings, usually at the lower end of main-street multiples because restaurants are owner-dependent and location-dependent. Prime cost, food plus beverage plus labour as a share of sales, tells a buyer how well the kitchen is run and whether the earnings will last.

Struggling Restaurants: Priced on Assets

A restaurant that is not profitable is sold as a turnkey or second-generation space. The value is what a new operator would otherwise spend to build it: the hood and fire suppression, the grease trap, walk-ins and kitchen equipment, the permits, the liquor licence and a lease they can take over. That value is real, and it is often underestimated by sellers who assume a losing restaurant is worth nothing.

The Lease Decides the Loan

Buyers need enough remaining term, usually ten years including options, for a lender to finance the purchase, at a rent the sales can carry. A short lease or a rent that has run ahead of sales takes buyers out of the market, and that reduces the price more than any other single factor.

Liquor Licences

A quota full-liquor licence in Florida has its own market value because the number issued is capped by county population, and it can be sold with the restaurant or separately. A beer and wine licence or a special restaurant licence does not carry that value. Confirm your licence type with the Division of Alcoholic Beverages and Tobacco.

Request a Confidential Business Valuation

Tell us the type of business, the city, how long it has operated, annual revenue, owner benefit or seller's discretionary earnings, EBITDA if you track it, monthly rent and lease expiry, number of employees, how involved you are, why you are selling, your timeline and whether you would consider seller financing. A licensed BreakThru business broker prepares a confidential valuation from comparable sales and replies within one business day. Everything you tell us is confidential, the valuation is free, and nothing is listed or announced unless you decide to sell. Prefer to talk now? Call (786) 914-1017.

Questions Owners Ask

How much is my business worth?
Most owner-operated businesses in South Florida sell for a multiple of seller's discretionary earnings: net profit plus the owner's salary, benefits and one-time or personal expenses run through the business. Where the multiple falls depends on the industry, the lease, the staff, the trend in the numbers and how much the business depends on you. A confidential valuation gives you the range for your business and the reasons behind it.
Will my employees, customers or landlord find out?
Not from us. The business is marketed without its name or address, buyers sign a non-disclosure agreement and prove their funds before they learn who you are, and showings happen after hours or are presented as something else. The landlord is approached only once there is an accepted offer, because the lease has to be assigned.
How long does it take to sell a business?
Six to nine months from listing to closing is common for a well-prepared small business, faster when the price is right and the records are clean, longer for businesses that need a licensed buyer or a franchisor's approval. The escrow period after an accepted offer is usually sixty to ninety days.

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