Assessing the value of a restaurant business fund is a complex exercise that depends on many factors, but there are established methods.
Percentage of Turnover Method: A coefficient is applied to the annual turnover excluding taxes (average of the last 3 years). For a traditional restaurant: 50% to 85% of turnover. For fast food: 40% to 80%. For a bar/cafe: 80% to 120%.
Profitability Method (EBE): Often preferred by banks and investors. The EBE (EBITDA) is multiplied by a coefficient, generally between 3 and 5. Example: EBE of 50k€ x 4 = 200k€. This method values the restaurant’s ability to generate cash.
The elements that increase the value: Location #1, long commercial lease and moderate rent, recent and up-to-date equipment, autonomous team (the boss is not essential), strong brand, customer files.
Elements that decrease the value: Planned work (renovation, decoration), strong dependence on the manager, precarious lease, new competition nearby, poor online reputation.
The “good” price is the one that allows the buyer to pay for it and repay their 7-year loan with the profits generated.
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