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Client asked on 24 Sep 2011 in Restaurant.

What are the standard valuation metrics for a high-end, gourmet restaurant?

Does the market typically value these business based on a multiple of revenues? Cash flow? If so, what is the typical multiple? Also, what would be an appropriate discount rate to apply to cash flow projections to evaluate the business on an NPV basis? If it matters, the business is located in a major East Coast metropolitan market and by high-end, gourmet I am referring to a restaurant that is run by a known (at least in food circles) chef.

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Jerry Nemorin
Jerry Nemorin advised on 15 Jan 2012
Founder & CEO at Lend Street Financial, Inc.
The industry seems to use cash flow multiples as a basis for valuation, typically based on comps and growth potential of the restaurant. Multiples are based on EBITDA, check out what similar restaurants have sold for in your area to get a range on the multiples.
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Jerry Nemorin advised 4 months ago
The industry seems to use cash flow multiples as a basis for...
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