What is a fair SDE multiple for a small restaurant sale?

Question

Seller in Phoenix is asking 2.8 times seller discretionary earnings on a 90 seat independent. No real estate included. What range are you seeing on restaurant businesses for sale in that size?

UrbanRegular888 · Answer

For an independent without a transferable lease option or a rare license, I have been seeing closer to 1.8 to 2.4 times SDE if the books are clean. 2.8 assumes a very sticky location or a concept a buyer can duplicate.

UrbanOperator331 · Answer

Books are messy and rent steps up next year. Sounds like we are closer to the low end of that range.

CornerBuyer383 · Answer

Asset sales with weak financials should not be priced like a business sale. If you cannot defend SDE, price the hood, walk-in, and furniture and treat cash flow as upside.

What is a fair SDE multiple for a small restaurant sale?

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