What Is My Restaurant Worth?

TLDR: Restaurant valuations typically fall between 1.7x and 4.2x EBITDA, with SDE multiples ranging from 1.3x to 2.8x. With a national median asking price of $350,000 and median SDE of approximately $153,578, most restaurants sell in the low-to-mid six figures—though location, concept, and financial consistency move that number significantly in either direction.

Understanding SDE (Seller Discretionary Earnings)

If you've ever worked with a business broker or looked up what your restaurant might be worth, you've almost certainly encountered SDE—Seller Discretionary Earnings. It's the starting point most sellers use, and for good reason: it reflects what the business actually puts in your pocket as an owner-operator.

SDE is calculated by taking your net income and adding back:

• Your own salary and benefits
• Depreciation and amortization
• Interest expense
• One-time or non-recurring expenses (a new roof, legal fees from a one-time dispute, etc.)
• Any personal expenses run through the business

The result is a single number that captures the total economic benefit you receive from the restaurant. For a working owner who manages the floor, handles scheduling, and writes the prep lists, SDE is an honest representation of what the business produces.

Brokers use SDE because it's practical and intuitive—especially for smaller restaurants where the owner is deeply embedded in daily operations. It's the common language of Main Street deal-making.

That said, SDE is less standardized than EBITDA. Different brokers may add back different items. Buyers and their lenders often want to work from a more uniform metric. That's where EBITDA comes in.

Understanding EBITDA

EBITDA—Earnings Before Interest, Taxes, Depreciation, and Amortization—is the metric serious buyers, private equity groups, and SBA lenders use to evaluate a restaurant's financial performance. It's calculated the same way across industries, which makes it easier to compare deals and underwrite financing.

The key difference from SDE: EBITDA does not add back your salary as owner. Instead, it assumes a market-rate manager is in place to replace you. If you're paying yourself $80,000 a year, that stays in as an expense. The business has to be profitable even without you running the pass.

This matters because buyers are purchasing a business, not just a job. A restaurant that generates $200,000 in SDE with an owner working 60-hour weeks looks different to a buyer than one generating $200,000 with a GM already in place.

Think of it this way: SDE answers "what does this restaurant earn for me, the current owner?" EBITDA answers "what would this restaurant earn for any owner who hires professional management?" Neither is more correct—they answer different questions, for different audiences.

For larger restaurants, multi-location groups, or any deal over roughly $500,000, expect buyers to anchor their offers to EBITDA.

Restaurant EBITDA Valuation Range

According to Regalis Capital's market data, restaurants currently trade at 1.7x to 4.2x EBITDA. The lower end of this range reflects marginal performers, heavily owner-dependent operations, or concepts with short lease terms. The upper end is reserved for high-margin restaurants with strong brand recognition, clean financials, and demonstrated management depth.

Example: A restaurant with $180,000 in annual EBITDA would be valued at approximately $306,000 to $756,000 depending on where it falls in the range above.

These ranges reflect current market data and buyer behavior. See disclaimer below.

Restaurant SDE Valuation Range

For smaller, owner-operated restaurants—which represent the majority of the 1,390+ restaurants currently listed for sale nationally—SDE-based valuation is often the most relevant starting point.

Restaurant SDE multiples currently range from 1.3x to 2.8x, with a median asking price of $350,000 against median SDE of approximately $153,578. That implies a median transaction multiple of roughly 2.3x SDE.

Note on the gap between SDE and EBITDA multiples: It's not that one is "better." Restaurants valued on SDE tend to be smaller and more owner-dependent. As a restaurant grows and professionalizes, EBITDA becomes the relevant metric—and EBITDA multiples reflect the added transferability that professionalization creates.

What Drives Value Up or Down in a Restaurant

Location and lease terms are foundational. A restaurant in a high-traffic corridor with a long, assignable lease is meaningfully more valuable than the same concept in a declining strip mall with two years left on the term. Buyers are acquiring not just the business but the right to operate in that space.

Value accelerators: - Recurring revenue streams: Catering contracts, event bookings, and corporate accounts reduce the unpredictability that makes restaurant buyers nervous. Regular income is priced at a premium. - Diversified customer base: If no single customer or platform (including third-party delivery) accounts for more than 15–20% of revenue, you have a defensible business. - Management depth: A tenured GM and trained kitchen staff who will stay post-sale dramatically increase perceived value. Buyers aren't just buying a concept—they're buying continuity. - Clean, consistent financials: Three years of tax returns that match your P&Ls. No unexplained cash. No intermingling of personal and business expenses. - Strong margins: Food and beverage cost controls matter. Restaurants with EBITDA margins above 15% command higher multiples.

Value detractors: - Owner is the head chef, manager, and sommelier. No redundancy, no transferability. - Lease is short, below-market, or the landlord relationship is rocky. - Revenue is declining or highly seasonal without explanation. - Aging equipment with deferred maintenance—buyers will price this in. - Online reputation problems (sub-4.0 stars with recent negative trends).

How Buyers Evaluate Restaurant Businesses

Restaurant buyers—whether a first-time operator or an experienced multi-unit acquirer—run a consistent due diligence process. Understanding their lens helps you prepare.

Financial review: Buyers will request three years of tax returns, monthly P&Ls, and your POS data. Discrepancies between reported income and actual deposits raise flags immediately. SBA lenders will order a quality of earnings review on deals over $500,000.

Lease assignment: Before an offer goes hard, the buyer's attorney reviews your lease for assignment rights, personal guarantee requirements, and remaining term. A landlord who won't cooperate can kill a deal.

Health and licensing: Current health inspection scores, liquor license status, and any outstanding violations are reviewed early. A transferable liquor license adds value; a suspended one creates liability.

Operational review: Buyers will visit the restaurant—often more than once, sometimes without announcing themselves. They're evaluating whether the quality and systems hold up without you present.

Staff interviews: Key employees may be interviewed late in the process. Buyers want to know who will stay. If critical staff leave at the change of ownership, buyers will adjust their offer accordingly.

Use the Regalis Capital Seller Valuation Calculator to build a preliminary picture before your first buyer conversation.

Disclaimer

These ranges are based on publicly available market data and are not a formal appraisal. Actual valuations depend on financial performance, market conditions, deal structure, and buyer competition. This content is informational only and does not constitute financial or legal advice.

Frequently Asked Questions

How much does a restaurant sell for on average? Based on current national market data, the median asking price for a restaurant is approximately $350,000, with median SDE of $153,578. Most restaurants sell between $150,000 and $750,000, though high-volume or multi-location concepts can exceed $1 million.

Is my restaurant valued on revenue or profit? Buyers value restaurants on earnings—either EBITDA or SDE—not on revenue. A $2 million revenue restaurant with 5% margins is worth far less than a $900,000 revenue restaurant with 18% margins. Profitability and consistency matter more than top-line numbers.

What EBITDA multiple will my restaurant get? That depends on your margins, lease security, management structure, and revenue consistency. Most restaurants fall between 2.0x and 3.5x EBITDA. Well-run concepts with transferable operations and strong financials reach the upper end of the 1.7x–4.2x range.

Does my liquor license affect my restaurant's value? Yes, significantly. A transferable full-service liquor license is a meaningful value-add, particularly in states where licenses are limited or expensive to obtain. Buyers factor this into their offer and financing structure.

What's the fastest way to increase my restaurant's value before selling? Focus on three things: clean up your financials (three years of consistent, documented books), reduce owner dependency (train or promote a GM), and secure your lease. These three factors account for more valuation movement than almost any other variable.

Ready for an Accurate Assessment?

The ranges above give you a market-grounded starting point. But your restaurant's actual value depends on your specific financials, operations, and market. Our team works with restaurant sellers every day—we can tell you where you actually stand.

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