Every restaurant owner wants top dollar. But the asking price does more than set a number. It decides who calls, how fast offers come in and how much leverage you keep. Price it right and buyers compete. Price it wrong and your listing goes stale.
Start with real earnings, not sales
Buyers don't pay for revenue. They pay for the cash the business puts in an owner's pocket. In most small restaurant deals, that's measured as Seller's Discretionary Earnings (SDE): net profit plus the owner's wage, plus legitimate add-backs like one-time repairs or personal expenses run through the business.
If your add-backs can't be backed up with receipts and bank statements, a buyer won't credit them. And neither will their lender.
Apply a realistic multiple
Most independent restaurants in BC sell for a multiple of SDE, typically in the 1.5x to 3.5x range. Where you land depends on:
How long the lease runs and what rent you pay
Consistency of sales over the last two to three years
How dependent the business is on you personally
Condition of the equipment and the space
Concept strength, location and online reputation
A restaurant with flat or declining sales and a short lease sits at the low end. One with growth, a long lease and systems that run without the owner sits higher.
Know your floor: asset value
Some restaurants don't produce much profit. In those cases, the price leans on what it would cost a buyer to build the space from scratch: equipment, leaseholds, permits and the time saved. This is often called a "turnkey" or asset-based sale, and it's priced very differently from a profitable going concern.
Why overpricing backfires
Serious buyers skip it. Experienced buyers run the numbers in minutes. If the price doesn't make sense, they don't call.
It goes stale. Listings that sit for months raise questions about what's wrong.
Financing fails. Lenders value the business independently. If their number is lower, the deal stalls.
You end up lower anyway. Repeated price drops signal weakness and invite low offers.
Leave room to negotiate, but not too much
A small cushion above your target price is normal. A big one isn't. Price within a range you can defend with your financials, and expect buyers to test it.
Consider your deal terms
Price and terms work together. A vendor take-back (VTB), also known as seller financing, can help a buyer reach your price. So can a clear training period or a strong transition plan. Talk to your accountant about how terms affect what you actually net.
The bottom line
The right price is one you can prove. Start with clean earnings, apply a fair multiple and back it up with documents. Book a confidential restaurant valuation with The Business Broker to find out where your restaurant stands.
