Looking for Restaurants for Sale?

Restaurants for Sale!  It's one of the most popular types of established businesses that people are seeking - and for good reason!  People will always need to eat and restaurants first and foremost are a fundamental business that everyone patronizes.

The restaurant industry is divided into two main segments:  full service restaurants and quick-service restaurants.  Quick service is the word currently used to cover fast food, limited-service restaurants and fast-casual.

The SIC Code for Restaurants is 5812-08 and the NAIC Code is 722110 for full-service restaurants and 722211 for fast food and carryout establishments.

Restaurants cover a seemingly endless variety of eating places from fast food to fine dining to ethnic based dining establishments

There are a couple of varieties that warrant their own methods for valuation and scrutinization, particularly, bars & grills, pizza places and sandwich specialists.  Bars is another section of the food & beverage industry which can be broken down and analyzed in and of itself in many ways.

Rules of Thumb for Pricing and Valuing Restaurants for Sale:
  1. 30 to 40 percent of annuals sales plus inventory.
  2. 2 to 3 times Cash Flow, or Seller's Discretionary Earnings plus Inventory

Other things to keep in mind when buy and selling a restaurant:

Rent - rent is a key factor when determining the value of a restaurant. 6% of annual sales is a commonly agreed upon guildeline for average rent.  If the rent is higher or lower than 6% it could affect the price of the business either way.

Cost of Goods - COG's can be a factor affecting the price of your business.  35 - 40% is the expect range an astute buyer will be looking for here.

Payroll - Payroll and labor is a huge factor of running this service-intense business.  In the neighborhood of 30% is common for a full-service restaurant.

Equipment - the condition of equipment is an important factor.  If the new owner is going to have to start replacing equipment soon after taking over this is going to obviously affect value.

Source:  Business Reference Guide - Business Brokerage Press



Contact me about Restaurants for Sale

Return to the Home Page

Google