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prospective buyers for there business or business brokers that
want to find a buyer for there client. The business broker .org
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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:
30 to 40 percent
of annuals sales plus inventory.
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 |
