How to value a café or restaurant: what a buyer looks at

A café or restaurant is bought for the profit of a specific site. That is why, besides revenue and profit, the lease terms, the location and the dependence on the owner weigh heavily in a valuation.

Owner’s profit and EBITDA

If the owner stands behind the counter or runs the floor personally, the buyer works out what is left after hiring a manager. So they look not at plain profit but at normalised profit: with a manager’s salary and without personal spending.

The lease is the main factor

• how many years are left on the contract and whether it can be renewed;
• rent as a share of revenue: the higher it is, the thinner the safety margin;
• whether the lease can be passed to a new owner, with or without the landlord’s consent.

Numbers a buyer works out

• the cost of food and the payroll as a share of revenue;
• average check and the number of checks by day and season;
• the share of orders through delivery platforms and the commission they take;
• staff turnover and dependence on a few key people, such as the head chef.

Licences and requirements

The buyer checks that permits and hygiene requirements are met and that the licence moves with the business. Violations here lower the price or stop the deal.

What raises value

• a long lease on clear terms;
• transparent daily reporting from the till;
• a team and processes that work without the owner;
• a recognisable brand and repeat guests.