How to Value a Restaurant for Purchase

The method brokers actually use

Small restaurants are priced on SDE — seller's discretionary earnings: the profit the business throws off for a working owner, before the owner's salary and one-time items. The convention in current broker literature (CT Acquisitions — Business Valuation Multiplier 2026; BizBen — How to Value a Restaurant in California 2026; 7shifts — How to Calculate Restaurant Value, 2026-10) brackets typical independent restaurants at roughly 1.5×–3.0× SDE. SDE multiples are market convention from broker literature, NOT appraisals — verify band via sources. Literature is wider than the 1.5-3.0 band used here: CT Acquisitions 2026 independent restaurants 1.5x-3.5x SDE; BizBen California 2026 1.5x-3.5x (well-located profitable to 2.4x-4.0x, standard under $3M revenue 1.8x-3.0x); 7shifts rule of thumb 2x-3x SDE; Sundance/BizBuySell restaurants typically 1.5x-2.5x. Lease, growth, owner dependence and clean books move a deal within/above the band. NYC worked example used ~1.4x on ~$250,000 SDE.

Where the number gets decorated

"Revenue" quoted from the best year, or from projections, instead of filed returns.
Add-backs with no paper: cash skims claimed as earnings you are asked to pay for — never pay for income the seller hid from the tax authority; you cannot bank it either.
Owner labor valued at zero: if you must hire a manager to replace the seller, that salary comes out of SDE before the multiple.
Deferred maintenance priced as if it were profit: a dying hood is a cost, not an add-back.

Run any listing through the Buy-vs-Build Checker for the bracket — then verify the SDE before you negotiate inside it.

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The paperwork, filled in for you

Included in the $49 Opening Pack: the filled templates, trackers, calendars and worksheets for this door — built from the same dated datasets as the free checker above.

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Sources: The FirstTableCheck cost + liquor datasets; valuation conventions: CT Acquisitions — Business Valuation Multiplier 2026; BizBen — How to Value a Restaurant in California 2026; 7shifts — How to Calculate Restaurant Value, 2026-10. Dataset checked October 23, 2026. Where a fee or rule is set by a county or city, this page says so instead of guessing a number.