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Restaurant Valuation Calculator

Estimate restaurant business value with revenue, EBITDA, or SDE multiples, or build an asset-based net value from equipment, inventory, and liabilities.

Restaurant valuation formulas

Formula
Revenue Method
Business Value = Annual Revenue x Revenue Multiple

EBITDA Method
Business Value = Annual EBITDA x EBITDA Multiple

SDE Method
Business Value = Annual SDE x SDE Multiple

Asset Method
Gross Asset Value = Equipment + Inventory + Furniture & Fixtures + Leasehold Improvements + Other Assets
Net Asset Value = Gross Asset Value - Liabilities

Typical multiples
  Revenue: 0.3x to 1.2x (median 0.75x)
  EBITDA: 3x to 8x (median 5.5x)
  SDE: 2x to 4x (median 3x)

Benchmark (multiple vs median)
  Excellent: above median
  Good: near median
  Average: slightly below median
  Low: significantly below median
  Critical: negative valuation inputs

What it means

Multiple modes multiply a trailing earnings or revenue base by a market multiple and show the typical band as a planning range. Asset mode subtracts liabilities from tangible assets for a net floor. This page is not the EBITDA Calculator (earnings build), ROI (return percentage), NPV or IRR (discounted project decisions), Startup Cost (opening cash plan), or Operating Cash Flow (period cash from operations).

Good to know

  • Multiples are planning rules of thumb, not a formal appraisal.
  • Asset values are fair-value estimates at the valuation date.
  • Negative EBITDA or SDE marks the result critical.

Ideal range

  • Not the EBITDA Calculator. Build earnings there first.
  • Not ROI, NPV, or IRR. Those score returns or discount projects.
  • Not Startup Cost or Operating Cash Flow.

Variables

RevenueAnnual revenue
Trailing or run-rate sales.
EBITDAAnnual EBITDA
Operating earnings before interest, tax, and non-cash charges.
SDEAnnual SDE
Seller discretionary earnings for owner-operated deals.
NAVNet asset value
Total assets minus liabilities.

Assumptions

  • Typical bands: revenue 0.3x to 1.2x, EBITDA 3x to 8x, SDE 2x to 4x.

Limitations

  • No lease remaining-term, franchise royalty, or working capital peg modeling.

Worked examples

Real numbers through the same formula this tool uses.

  1. 1
    Restaurant scenarioExample 1

    Revenue multiple at 0.8x

    One million revenue at 0.8x values to 800000, above the 0.75x median, excellent status.

  2. 2
    Restaurant scenarioExample 2

    Asset based net value

    Gross assets 260000 minus liabilities 70000 equals net 190000, good equity share.

How to use the restaurant valuation calculator

Pick the method that matches your deal type, enter clean trailing figures, then read value and range.

  1. Choose revenue, EBITDA, SDE, or assets

    Use SDE for small owner-operated sales, EBITDA for larger going concerns, revenue for quick screens, and assets for a hard floor.

  2. Enter the trailing base or asset lines

    Use reconciled annual revenue, EBITDA, or SDE, or list equipment, inventory, and liabilities.

  3. Enter a market multiple

    Stay near typical bands unless you have comps that justify a premium or discount.

  4. Read value, range, and status

    Compare your estimate to the typical low, median, and high before you set an asking price.

  5. Cross-check with EBITDA and DSCR tools

    Confirm earnings quality and buyer debt coverage before you negotiate.

How to read a restaurant valuation

This tool estimates sale value from revenue, EBITDA, or SDE multiples, or from a hard-asset floor. It is not an earnings build, a return score, or a discounted cash flow decision tool.

  • Start with estimated business value

    The headline number is revenue, EBITDA, or SDE times your multiple, or net assets in asset mode.

  • Use the valuation range

    Typical bands (revenue 0.3x to 1.2x, EBITDA 3x to 8x, SDE 2x to 4x) show a planning low and high around your estimate.

  • Compare the multiple to the median

    Excellent sits above the industry median. Low sits well below it. Critical means negative earnings or negative net assets.

  • Treat assets as a floor

    Asset mode shows what hard assets minus liabilities might support. Buyers still price cash flow in most going-concern deals.

  • Not an EBITDA calculator

    Use the Restaurant EBITDA Calculator to build earnings. Use this page to multiply those earnings into a sale estimate.

Best practices for restaurant valuation

A useful asking price comes from clean trailing numbers and more than one method.

  • Use trailing twelve-month figures

    Prefer audited or reconciled revenue, EBITDA, and SDE over a single peak month.

  • Run more than one method

    Compare revenue, EBITDA, and SDE multiples, then use assets as a floor when equipment value is material.

  • Normalize owner add-backs for SDE

    Include only add-backs a buyer will accept. Inflated SDE pushes the multiple down in diligence.

  • Pair with DSCR and loan math

    A buyer still has to service debt. Check coverage before you assume the multiple clears the market.

Common restaurant valuation mistakes

These errors turn a planning estimate into a number that will not survive diligence.

  • Annualizing a peak month

    One strong month is not trailing revenue. Buyers annualize the slow season too.

  • Borrowing a multiple from another concept

    A QSR chain multiple rarely fits an independent full-service site. Stay inside the typical local band.

  • Ignoring assumed liabilities

    Equity value falls when debt stays with the deal. Asset mode makes that subtraction explicit.

  • Treating ROI as a sale price

    ROI scores return on an investment. Valuation estimates what a buyer might pay for the business.

People also ask

Short answers operators and brokers ask when sizing a restaurant sale price.

  • How do you value a restaurant business?

    Common methods multiply revenue, EBITDA, or seller discretionary earnings by a market multiple, then cross-check with net assets.

  • What is a typical restaurant revenue multiple?

    Many independent restaurants plan around roughly 0.3x to 1.2x annual revenue, with the midpoint near 0.75x depending on concept and risk.

  • What EBITDA multiple do restaurants sell for?

    A common planning band is about 3x to 8x EBITDA. Stronger brands and cleaner books sit toward the higher end.

  • What is SDE in a restaurant sale?

    Seller discretionary earnings is owner benefit after normalized add-backs. Small owner-operated deals often price off SDE at about 2x to 4x.

  • Is restaurant valuation the same as NPV?

    No. NPV discounts project cash flows for an accept or reject call. Valuation estimates a sale price from multiples or assets.

  • How is valuation different from startup cost?

    Startup cost totals cash needed to open. Valuation estimates what an operating (or asset) business might sell for.

References and further reading

Use these internal tools after you set a planning value.

  • Restaurant EBITDA Calculator

    Build trailing EBITDA before you apply an EBITDA multiple.

  • Restaurant ROI Calculator

    Score return on capital after you have a purchase price in mind.

  • Restaurant NPV Calculator

    Discount project cash flows when the decision is invest or pass, not set an asking price.

  • Restaurant Startup Cost Calculator

    Estimate opening cash needs when the project is a new build, not a going-concern sale.

Frequently asked questions

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