How to Value a Restaurant

We Sell Restaurants and has detailed knowledgeonly applied when someone is acquiring a location
and understanding of restaurant pricing andfirst and foremost for conversion to their own
valuation.  This is the single most importantconcept.
element of selling your restaurant.  Listing yourWe Sell Restaurants has experience and education
business too high means it will just sit on thein the valuation process.  Our Broker spent a
market without activity.  Listing it too low meansdecade as a lender for small businesses and has
you’re giving up potential value.  We canbeen designated an Industry Expert in Business
determine the correct price.Valuation.  Our Director of Marketing holds an
CASH FLOW METHODMBA in Finance and develops all valuation tools.
We Sell Restaurants uses their exclusivelyWhen packaging your listing for sale, we draw
Restaurant Valuation Tool to be sure that we areupon our financial knowledge to set the right
accounting for all opportunities to find cash flow.price.  We know the common ratios – food
This cash flow translates to the sales price forcosts and rent percentages so not only can we
the seller.  We work on a daily basis withset the right price for your business, we also use
Restaurant profit and loss statements.  Weour Business Analysis Tool to show buyers the
understand the appropriate add backs and recastopportunities for improvement.
your financial statements using GenerallyWe know what other restaurants are selling for. 
Accepted Accounting Practices (GAAP).  FromAs one of the nation's largest restaurants
this baseline, we can then apply industrybrokers, We Sell Restaurants has access to
benchmarks and comparative data to reach abusiness valuation comps for every listing in the
valuation.states of Georgia and Florida  though access to
ASSET VALUATION METHODthe BizMLS system.  We can look at similar size,
If your restaurant is not generating cash flow, wevolume, profitability and pricing to gauge days on
rely on the value of the assets to help setmarket and help determine pricing.
pricing.  While this is much less than you mayWe Sell Restaurants has access to industry
have originally invested, in most cases, a buyer willcomparables for sales across the nation.  As one
not pay a premium if you are not generating cashof the identified Business Industry Experts by
flow.  This is not always the case however, as aBusiness Brokerage Press, other brokers rely
restaurant in a prime location with a goodupon our modeling to assist in their pricing.
transferrable lease may be more valuable thanOur professional team has a financial services
assets alone.  We look at all variables in setting abackground that translates into a first class listing
price for assets that will get your restaurant soldand selling presentation package unrivaled by any
including location, value of the lease andother firm. Buying a restaurant is a complex
comparable sales in the marketplace for assets.transaction requiring skilled professionals. We Sell
GROSS SALES VALUATION METHODRestaurants has committed money and resources
There is a last technique by which gross salesto this process to insure the transaction is
may be used as a "rule of thumb" to gaugecompleted as efficiently and quickly as possible.
pricing.  This method is rarely used and often byWe have established market dominance for the
those who don't have the financial skills to conductsoutheast, listing and selling hundreds of
a strong review of the business and prepare arestaurants. Sellers rely on our ability to hit the
valuation.  Most buyers want to see detailedright price to sell their restaurant.  Give one of
profit and loss statements to justify theirour restaurant brokers a call to get a valuation of
purchase.  There are limited instances where thisyour restaurant today.
may be an appropriate method to but generally is