Ep #28: Market-Based Valuation: How Much Your Restaurant Will Actually Sell For

Restaurant Deal Making Exposed 28

What determines the true value of your restaurant? You might have a valuation from your CPA, but does that number reflect what your business would actually sell for in today’s market? In this episode, we dive into the difference between accounting-based valuations and market-based valuations, and why understanding the true market value is key when selling a restaurant.

We explore two primary valuation methods: asset sale valuation and going concern. Asset sales focus on the physical space and equipment when a concept is changing, while going concern valuations account for the entire business—including goodwill, brand, and customer base. With our extensive database of restaurant transactions, we provide an accurate, market-driven approach to pricing your restaurant that reflects current trends and buyer expectations.

This episode provides real-world examples, breaking down how market-based valuations take into account more than just financials—they factor in location, equipment quality, lease terms, and residual goodwill. Understanding these methods will help you better position your restaurant for sale and ensure you’re receiving the right price based on current market realities.

What You’ll Learn from this Episode:

• How specialized restaurant brokers determine market-based valuations versus CPA balance sheet valuations.

• The key differences between asset sale and going concern valuation methods.

• Understanding acceptable add-backs for SBA lending and valuation purposes.

• Why location, equipment quality, and lease terms impact final valuations.

• The role of transferable goodwill in both asset sales and going concern transactions.

• How to properly time and prepare your restaurant for sale to maximize value.

  
  

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