How much is a restaurant worth?

Short answer: independent restaurants are the cheapest cash flow in small business — realized sales put them at 2.18× SDE — because so much of the value sits in a lease, a license, and a concept that may not survive the founder leaving. Show a buyer those three things transfer, and the multiple moves. Run your numbers in the valuation calculator and see the restaurants page.

The number

Restaurants are one of the clean rows. BizBuySell's industry valuation multiples (trailing five years of closed sales, through Q2 2026) put Restaurants at 2.18× SDE and 0.39× revenue, median sale price $220,000. Size helps a little — IBBA Market Pulse, Q2 2026: 2.0× SDE under a $500K price; 2.8× at $500K–$1M; 3.1× at $1M–$2M; 4.8× EBITDA at $2–5M; 5.8× EBITDA at $5–50M — but restaurants rarely climb the ladder the way services do, because the risks below travel with the business.

Note the gap to public markets. Damodaran Online's Restaurant/Dining bucket — this one is a direct sector row for restaurants, not a proxy (January 2026) — trades at 17.49× EV/EBITDA. That multiple belongs to chains with hundreds of units, franchising income and public liquidity. It tells you where the ceiling is, not what your dining room is worth.

Worked example — shown math, assumptions labeled:

• Revenue (assumption, a solid single-unit restaurant): $800,000
• SDE margin (assumption): 15% → SDE = $800,000 × 0.15 = $120,000
• Multiple (BizBuySell realized, restaurants): 2.18×
• $120,000 × 2.18 = $261,600

How buyers actually value a restaurant

Three documents decide most of the price. The lease: years remaining plus options, rent as a share of sales, and — the deal-breaker — whether it is assignable to a buyer without the landlord re-trading the rent. A great restaurant with 14 months of non-assignable lease is worth its equipment. The liquor license: in quota states and cities a full liquor license can be worth more than the business, and buyers verify it is transferable, unencumbered and not tied to the seller personally. The sales mix: alcohol carries the margin, food carries the traffic; a buyer separates food, beer/wine and spirits sales, then checks prime cost (food + labor) line by line.

Then the transferability question: does the concept run without the founder-chef? Recipes costed and written, a kitchen manager who can hold the line, reservations and reviews attached to the restaurant's name rather than the owner's face. Equipment is valued last and coldly — a working kitchen is worth a fraction of its install cost the day it is bolted down.

What raises the price — and what kills it

Raises it: a long, assignable lease at sane rent; a transferable liquor license in a quota market; catering, private events or a second revenue channel beyond the dining room; prime cost documented monthly, not guessed; a chef and GM who stay; sales that survived the founder taking a real vacation.

Kills it: rent above roughly 10% of sales with a short fuse; health-department history the buyer finds before you disclose it; cash sales that never reached the POS — unverifiable means unpaid-for; a concept that is one person's palate and personality; deferred maintenance on hoods, grease traps and refrigeration, which the buyer's inspector will price to the dollar.

Move your number

Payments: restaurants live on card mix — dine-in, takeout, delivery apps and gift cards all settle differently, and processing cost plus chargebacks on catering deposits quietly eat points of margin. Getting the mix and the rails right is the Finix payments team's work. Recurring revenue: private-event pipelines, catering contracts and loyalty that brings regulars back on Tuesdays are worth more than one more Friday rush — ClaroPro's team uses AI and workflow tools to run reservations follow-up, event inquiries and review requests so they do not die in an inbox. Systems: a buyer pays for costed recipes, inventory counts and schedules that live in software, not in the owner's memory — a Nova engineering team can connect POS, inventory and accounting into one view.

Run your own lease-and-license reality through the math: the calculator for restaurants.

This is an educational framework with shown math, not an appraisal; a real price is set by a real buyer on a specific day, usually right after they read your lease. Treat every caveat as owner protection: they keep you from overpaying for a dining room you cannot keep, and from underselling the license and lease you actually own. Never invent. Show the math. We're on the side of the business owner.