Answer the Public

At Smith Allen Group we support our clients with advice and services related to both buying and selling restaurant equipment as part of our brokerage and transaction process. For specifics, contact us directly for available inventory and current offerings.

Sales typically take four to nine months, depending on complexity, local demand, and readiness of both seller and buyer. Larger or more unique restaurants may require additional time to find the right buyer, complete legal steps, or transfer licenses.

Brokers limit the details shared in public ads and require NDAs from potential buyers before disclosing any specifics. Sensitive information (like your restaurant’s name, address, and financials) is only shared with vetted, qualified buyers.

Key items include tax returns, profit and loss statements, equipment lists, lease agreements, franchising details, liquor licenses, vendor contracts, payroll summaries, and any recent market appraisal. Some brokers may request additional documents for buyer review during due diligence.

Multiples refer to a factor (such as 2-3 times cash flow) used to estimate value based on the restaurant’s earnings or profits. The exact multiple depends on business health, local market conditions, and industry averages. Higher multiples mean a higher sale price—provided the business justifies it.

Common methods include multiples of seller’s discretionary earnings, cash flow/EBITDA, and asset-based approaches. Industry sales comparables and location-specific data provide practical benchmarks. A broker can choose the right method for your business type and local market conditions.

Restaurant brokers use industry-specific data, recent comparable sales, cash flow analysis, and local market trends, while accountants focus on historical financials and appraisers may prioritize asset values. Brokers look holistically at both tangible and intangible factors like location, reputation, and growth potential.

Key errors include undervaluing or overpricing the business, neglecting proper confidential marketing, mishandling negotiations, not vetting buyers, and missing vital legal documents. These mistakes can lead to deals falling through, lost value, and regulatory trouble.

Brokers coordinate with landlords, attorneys, and state agencies to manage lease assignment and alcohol license transfer, ensuring both meet legal requirements. They guide sellers on applications, documentation, and communication so the sale doesn’t get stalled by compliance problems.

It’s possible, but selling without a broker means managing valuation, marketing, negotiations, paperwork, lease transfers, and regulatory steps by yourself—often while running day-to-day operations. Many owners who go solo face mistakes such as poor pricing, legal oversights, ineffective marketing, or missed buyers, which can delay or reduce the sale value.

Brokers leverage their proprietary list of industry contacts, professional networks, and targeted online ads to reach buyers with sufficient experience and financial capability. They screen candidates for background, financial resources, intent, and fit before introducing them to sellers, reducing wasted time and protecting the business’s value.

They use “blind” or confidential listings that describe your business’s features and location broadly, avoiding any details that could identify you directly. Brokers require buyers to sign non-disclosure agreements (NDAs) before providing sensitive information, screening each inquiry to protect staff, vendor, and customer relationships during the process.

A certified restaurant broker has earned industry credentials through formal training and testing, such as the Certified Restaurant Broker (CRB) credential. Specialization means they deal primarily with restaurant sales, maintaining familiarity with regulations, valuations, marketing strategies, and licensing specific to restaurants, rather than a broad variety of businesses.

A business broker handles the sale of many types of businesses, while a restaurant broker focuses exclusively on restaurants and foodservice operations. Restaurant brokers understand industry-specific financials, lease details, equipment, and licenses—giving them deeper insights into what makes a restaurant attractive to buyers and how to address issues unique to foodservice.

Look for a broker with specialized experience in restaurants, not just general business sales. Verify their certifications and credentials, such as a Certified Restaurant Broker (CRB) designation, and ask about their ties to industry groups. Assess their marketing strategy, buyer network, communication style, and success record (for example, number of deals closed). Interview them to gauge their expertise, transparency, and responsiveness.

A restaurant broker is a licensed professional who specializes in helping owners buy or sell foodservice businesses, including restaurants, bars, and cafes. Their job involves valuing restaurants, marketing them confidentially, negotiating deals, managing paperwork, and coordinating the transfer of assets and licenses. The broker guides both sellers and buyers through every step, ensuring the process is legal, professional, and smoother than handling it alone.

Absolutely—having well-known staff or a loyal customer base can significantly increase the value of your restaurant.

• Famous or highly skilled staff: If your restaurant has a well-known chef, bartender, or team member with a strong following, this can draw extra attention to your business. Their reputation might even be a reason some customers keep coming back. Buyers see this as a major plus, as it helps the restaurant stand out from the competition. However, it’s important for buyers to know if these famous staff intend to stay with the business after the sale.
• Loyal customer base: A steady stream of repeat customers shows your restaurant has a great reputation and delivers consistent quality. Buyers love to see evidence of regulars and strong word-of-mouth. It means the new owner is more likely to enjoy immediate and steady business rather than starting entirely from scratch.
• Community ties and relationships: If your restaurant is known for hosting community events, partnering with local groups, or attracting a specific group (like foodies or business professionals), this adds even more value.

In summary, both famous staff and a loyal customer base make your business more attractive to buyers, often leading to a higher sale price and a smoother transition. These relationships are assets that can’t be easily replaced!

Not necessarily, but intellectual property assets—like your recipes, trademarks, logos, website, or even your business name—can be a big part of what makes your restaurant valuable.

When these assets are included in the sale, they can give the new owner a real head start by helping them keep your brand’s identity, unique menu items, and customer loyalty.

• Recipes: Signature dishes and “secret” recipes are valuable because they set your restaurant apart and keep customers coming back.
• Trademarks and logos: Legally protecting your name, logo, or slogan means the buyer gets your recognizable brand, not just a building or equipment.
• Website and digital assets: Transferring your website, social media accounts, and marketing materials makes it much easier for the new owner to keep reaching your current customers and grow the business online.

Including these intellectual property assets not only boosts your restaurant’s selling price, but also shows buyers they’re getting a complete package, with everything they need to carry your legacy forward and succeed.

Your restaurant’s reputation and online reviews can make a big difference in its value:

• Positive reviews add value: Lots of good reviews on sites like Google, Yelp, or TripAdvisor show buyers your business is well-liked and trusted. This makes your restaurant more attractive and lets buyers expect steady customers and income.
• Negative reviews can lower value: If there are many bad reviews or a poor reputation, buyers may worry about slow sales, unhappy customers, or trouble turning things around. This can lead to lower offers.
• Strong reputation helps with marketing: A well-known, respected restaurant is easier for a new owner to promote and is more likely to keep loyal customers after the sale.

Overall, the better your reviews and reputation, the more buyers are willing to pay, because they see less risk and more promise in your business.A great reputation and strong online reviews can significantly increase your restaurant’s value. Buyers see positive ratings on platforms like Google, Yelp, or TripAdvisor as proof that your restaurant attracts loyal customers and delivers a good experience. This reduces their risk and makes your business more desirable, which often leads to better offers.

On the other hand, a lot of negative reviews or a damaged reputation can make buyers nervous. They might worry about losing customers or having to invest extra time and money to fix the business’s image, which could lower what they’re willing to pay.

In short, the better your reviews and reputation, the higher your restaurant’s value—because buyers know they’ll have a head start with happy, returning customers.

Buyers look for several important things in a restaurant’s financials to decide if it’s a good investment:

• Consistent sales and profits: They want to see stable or growing revenue and profits over several years, not big ups and downs.
• Accurate, organized records: Clean, clear financial statements (like profit and loss statements, tax returns, and bank statements) make buyers confident your numbers are real and trustworthy.
• Manageable expenses: Buyers pay attention to how much is spent on food, labor, rent, and supplies. If your costs are well-controlled, your business looks healthier.
• Proof of cash flow: They want to make sure enough money is coming in to cover expenses, pay themselves, and achieve a return on their investment.
• No hidden debts or liabilities: Buyers check for outstanding bills, loans, or legal problems that could cause issues after the sale.

The clearer and more organized your financials, the more attractive your restaurant will be to serious buyers.

Several key things can increase a restaurant’s value in the eyes of buyers:

• Strong, consistent profits: Restaurants that reliably make money year after year are more attractive and fetch higher prices.
• Great location: Being in a busy area with lots of foot traffic or a desirable neighborhood adds value.
• Established reputation: Positive reviews, loyal customers, and a well-known brand name all make your restaurant more appealing.
• Solid financial records: Clear, organized, and up-to-date financial documents give buyers confidence in your business.
• Modern equipment and well-maintained space: Up-to-date appliances, clean facilities, and little need for repairs make your restaurant easier to run and more valuable.
• Growth potential: Opportunities to increase sales—like expanding hours, adding delivery, or marketing more—can boost what buyers are willing to pay.
• Efficient operations: A business that runs smoothly, with good systems and trained staff, reassures buyers they can step in without major issues.

The more of these strengths your restaurant has, the higher the value you’re likely to achieve.

An appraisal and a valuation both estimate what your business is worth, but they aren’t exactly the same thing.

• Appraisal: This is a formal process usually done by a certified appraiser. It’s often more official and may be required for things like loans, legal matters, or taxes. Think of an appraisal as a professional “stamp” on what your business is worth, using strict rules and guidelines.
• Valuation: This is a broader term that simply means figuring out the value of your business. It can be done by a broker, an accountant, or another business expert. A valuation can be detailed or simple, but isn’t always as formal as an appraisal.

In short, all appraisals are valuations, but not all valuations are appraisals. If you need an official document for legal or financial reasons, you’ll usually want an appraisal. Otherwise, a valuation can be a great place to start for planning or selling your business.

A “multiple” is a number used to help estimate what your restaurant is worth, based on its yearly profit (often measured as SDE—Seller’s Discretionary Earnings). For restaurants, a typical good multiple is usually between 1.5 and 3 times the annual profit.

For example, if your restaurant’s SDE is $100,000 a year, it might be valued between $150,000 and $300,000, depending on factors like location, brand reputation, stability, and how strong the local market is.

The better your restaurant’s track record and potential, the higher the multiple you can expect.A “multiple” is a simple way to estimate the value of a restaurant by multiplying your yearly profit (like SDE) by a certain number. For most restaurants, a good multiple is about 1.5 to 3 times your annual profit.

So, if your restaurant makes $100,000 in profits, it might be worth between $150,000 and $300,000. The exact number depends on things like your location, stability, and how attractive your restaurant is to buyers. The stronger your business, the higher the multiple might be.

SDE, or Seller’s Discretionary Earnings, is a way to measure the total money a business owner makes from their business in a year. It’s not just the profit; it’s all the income that the owner could take home or use, including their salary, certain benefits, and one-time expenses that won’t happen again.

In simple terms, SDE answers the question: “If I own this business, how much money would I actually put in my pocket each year?”

Buyers and brokers use SDE to help figure out what a small business is really worth, because it shows the true earning potential for a new owner.

Valuing a restaurant is about figuring out what makes it special and how much profit it can generate for a new owner. Here’s how it’s usually done, in simple terms:

• Profitability: The most important thing is how much money your restaurant makes after all bills are paid. Buyers want to know how much income they can expect.
• Location: Restaurants in busy or popular areas are generally worth more because they attract more customers.
• Financial History: Consistent sales and profit over several years make your restaurant more appealing and valuable to buyers.
• Comparable Sales: Looking at what similar restaurants in your area have recently sold for helps set a fair price.
• Assets Included: The value of everything that comes with the sale—like equipment, furniture, and inventory—is considered part of the final value.

Often, professionals use a formula based on your profit (sometimes called SDE or Seller’s Discretionary Earnings), but what matters most is how much money your business can realistically make, where it’s located, and what comes with it. The better shape your restaurant and records are in, the higher the likely value.

Business broker fees are typically based on commission, which means you only pay a percentage of the final sale price if your business actually sells. Most commonly, brokers charge between 10% and 12% of the sale amount, paid at closing, but this can vary depending on the size and complexity of the transaction.

In addition to the main commission, some brokers may charge small administrative or marketing fees, so always review your agreement carefully before signing. Make sure you understand exactly what’s included and ask your broker to explain any charges in simple, clear language.

A good broker will always be upfront about their fees and help you weigh the costs against the value they bring—like finding qualified buyers, handling negotiations, and helping you achieve the best outcome for your sale.

Keeping the sale of your business confidential is very important, especially if you don’t want employees, customers, or competitors to find out before you’re ready. Here’s how you can protect your privacy during the selling process:

• Confidentiality Agreements: Make sure anyone interested in buying your business signs a confidentiality agreement (also known as a Non-Disclosure Agreement or NDA) before you share any sensitive information. This is a legal promise that they won’t talk about your sale or use your business details elsewhere.
• Discreet Marketing: Instead of advertising your business for sale in public places, work with a broker who can quietly reach out to serious buyers. They’ll share details only with people who have signed an NDA.
• Limit Who Knows: Only share information on a “need-to-know” basis. Keep things between you, your broker, and qualified buyers until a deal is close to being done.
• Careful Communication: Don’t discuss the sale in front of employees or customers, and avoid leaving paperwork lying around in public areas.

Taking these steps helps ensure your business continues to operate smoothly, without unnecessary worry or disruption, until you’re ready to announce the sale on your terms. A good broker will always respect and protect your need for confidentiality every step of the way.

When you’re ready to sell your business, having the right documents organized makes the process smoother, faster, and helps build trust with potential buyers. Here’s a list of what you’ll typically need, along with why each item is important:

• Financial Statements: Your last 2–3 years of profit and loss statements, balance sheets, and tax returns. Buyers want to see a clear, honest snapshot of your business’s financial health.
• Lease Agreements: If you rent your space, provide your lease contract and any related documents. This shows buyers the terms they’d be taking over, or negotiating, for the location.
• Asset List: A detailed inventory of everything included in the sale—equipment, furniture, fixtures, and inventory. This helps clarify exactly what the buyer is getting.
• Business Licenses and Permits: Copies of required business licenses, permits, and, if applicable, any specialized certifications. Buyers need to know that your operation is legal and in good standing.
• Employee Information: A summary of current employees, roles, pay rates, and any benefit plans (without personal details). Buyers often want to understand who’s staying and what’s involved in running the day-to-day business.
• Contracts and Agreements: Any agreements with suppliers, customers, or service providers. This includes things like recurring orders, vendor contracts, or exclusive deals that might continue with the new owner.
• Loan or Debt Information: Details on any outstanding business loans or debts. Buyers need a clear picture of what, if any, financial obligations they might be taking on or negotiating around at closing.
• Marketing and Branding Materials: Examples of your menus, brochures, or digital assets (website, social media accounts). This lets buyers see your brand’s value and potential.

It’s a good idea to have these documents neat, organized, and ready to share with serious buyers after a confidentiality agreement is signed. If you’re ever unsure, your broker or advisor can help you make sure nothing important is missing. A well-prepared package not only helps your sale go faster but also builds confidence with potential buyers.

You might be wondering if you’ll need to offer owner financing when selling your business. The good news is, it’s not always required, but it can sometimes help make a sale happen, especially if buyers need extra help to finance the purchase.

What is owner financing?
Owner financing means you, as the seller, agree to let the buyer pay part of the purchase price over time—basically, you act like the bank for a portion of the sale. The buyer gives you a down payment, then pays the rest in regular installments with interest until the balance is paid off.

Do I have to do it?
You are never required to offer owner financing—it’s entirely your choice. Some sellers prefer a one-time, lump-sum payment and may only consider buyers who have their own financing or cash lined up. However, offering owner financing can have some benefits:

• Attract more buyers: Some buyers may struggle to get a large loan or might not have all the cash upfront. Owner financing opens the door to more interested, qualified buyers.
• Potential for a higher price: Because you’re flexible, you might be able to negotiate a higher selling price or better terms.
• Interest income: You collect interest on the amount financed, which can boost your total return over time.

Still, there are things to consider. There’s more risk involved—you’ll want to make sure the buyer is reliable, and you may need to check their financial background or ask for collateral.

Ultimately, it’s up to you. Many deals are done without owner financing, while in some markets, it’s more common. It’s always a good idea to talk things over with your broker and financial advisor so you can decide what’s best for you and your business sale.

When you sell your business, it’s completely normal to wonder what will happen to any debts you still owe. Here’s how it usually works, explained in simple terms:

• Debts are usually settled at closing: Most of the time, any outstanding debts—like loans, unpaid bills, or taxes—are paid off using the money from the sale before you receive your share. This way, you can hand over the business with a “clean slate.”
• Sometimes debts are negotiated: In some cases, you and the buyer might agree that certain debts will be handled differently. It all comes down to what you both decide during negotiations.
• Asset sale: If you’re selling just the assets of your business (like the equipment, inventory, and name), only the debts you and the buyer specifically agree on will be passed along. The rest are your responsibility to settle.
• Stock sale: If you’re selling the entire company (including its legal structure), all of the business’s debts and obligations usually go to the new owner along with the company.

No matter what type of sale you choose, it’s important to review everything with your broker and accountant. They can help you make sure all debts are taken care of properly and there are no surprises after the sale.

Finding the right buyer for your business is all about making smart choices with how—and where—you market your sale. Here’s how you can improve your chances of finding a truly qualified buyer:

• Work with experienced brokers: A seasoned broker knows the ins and outs of selling businesses and often has a network of people already looking to buy. They can help you reach the right audience, whether that’s through their own contacts or specialized industry sources.
• Vet your buyers: Don’t just accept interest from anyone. Make sure potential buyers have the financial resources, relevant experience, and a real interest in your type of business. A broker can help with background checks, but it’s always a good idea to ask for proof of funds and to get a sense of their track record.
• Use both online and traditional marketing: The right mix depends on the type of business you’re selling.
  • For some businesses, online platforms (like business-for-sale websites, social media, or email lists) can attract a broader pool of buyers in a discreet way.
  • For others—especially those in specialized industries—traditional tactics like word of mouth, industry networking events, or even targeted mailings can be more effective.
  • Sometimes, combining both online and offline approaches gets the best results.
• Target industry circles: Marketing your business where serious buyers gather—such as in professional associations, trade groups, or business journals—can help attract people who really understand your market and are likely to appreciate its value.

No matter what methods you use, the key is to make sure only truly qualified buyers get access to the sensitive details of your business. With the right marketing strategy and a little patience, you’ll reach buyers who are both ready and able to make an offer that’s a great fit for you.

Getting your business ready to sell is a lot like preparing a home for an open house—you want everything to look its best and run smoothly, so buyers get excited about the opportunity! Here’s how you can make your business as attractive and easy to review as possible:

• Organize your financials: Make sure your income, expenses, and tax records are all up to date and neatly filed. Clear, organized financials help buyers trust what they see and speed up the selling process.
• Fix maintenance and compliance issues: Address any needed repairs and make sure your business is up to code with all local laws and health or safety standards. This shows buyers you’ve taken good care of the business and there won’t be surprises down the line.
• Gather an inventory list: Put together a complete list of all equipment, furniture, and supplies that will be included in the sale. This helps buyers understand exactly what they’re getting.
• Clean up the premises: Give your business a deep clean, tidy up common areas, and make repairs where needed. A clean, inviting space makes a great first impression—just like with a house!
• Make it easy for buyers: Try to anticipate what buyers will want to see or ask about, and prepare those details ahead of time. The easier you make it for them to review your business, the more attractive your opportunity will be.

Taking these extra steps not only helps you sell faster, it often leads to better offers, because buyers can clearly see the value you’ve built!

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Most business brokers work on a commission basis, which means they only get paid if your business actually sells. In other words, you don’t pay their main fee unless the sale is successfully completed—so you and your broker both want to see your business sold!

However, it’s really important to read and confirm all the details of your agreement before you sign anything. Sometimes brokers may charge other small fees for things like marketing, listing, or paperwork—even if the business doesn’t sell. Every broker is a little different, so make sure you understand exactly what’s expected.

If you’re ever unsure about any terms, don’t hesitate to ask your broker to explain them in simple language. The best brokers will always be upfront and happy to walk you through the process so there are no surprises down the road. Your peace of mind matters!

Selling a restaurant is a big step, and it’s natural to wonder how long the process might take. On average, it usually takes about 4 to 8 months to sell a restaurant—but there are a few things that can affect this:

• Market conditions: If there are many people looking to buy, things might go faster. If the market is slow, it could take a bit longer.  That sounds like a very open ended answer, but if you read this answer today versus 2 months from now, the market may have adjusted.
• Preparation: The more organized you are with your documents and finances, the smoother (and sometimes quicker) the sale.  A good broker will help you with a list of documents that help move the process along.  Working with a good escrow company that is familiar with bulk sale transactions will help the process.
• Type of restaurant: Unique or highly specialized restaurants might take more time to find the right buyer, while popular or well-known places can sell more quickly.
• ABC license transfer: If your restaurant has an alcohol (ABC) license, the process can take a bit longer. Transferring an ABC license involves extra paperwork and approvals from state agencies, which often adds several months to the sale timeline. This can be mitigated by working on the transfer concurrently with your other due diligence tasks.

We know waiting can be hard, but being prepared and working with folks who understand these steps can really help. The most important thing is making sure you feel supported and informed through the entire process.

I completely understand that you want to protect your employees’ and customers’ feelings while you consider selling your business. It’s very common to worry about how this might affect the people who matter most to your business.

Here are some steps you can take to keep things private:

• Ask others to sign confidentiality agreements: Before you share any sensitive details about your business, be sure that brokers and potential buyers sign legal agreements that promise to keep everything confidential.
• Market quietly: Work with your broker to reach serious buyers in a very discreet way. Rather than putting your business in public ads or online listings, focus on private conversations until you’re truly ready for an official announcement.
• Share only what’s needed: Only give important details to people who have proven they’re serious, and always remind them how important it is to keep things private.

Respecting your team and customers during this process shows you care. A good broker will know how to protect your business’s privacy and handle these delicate situations with the utmost respect and care for everyone involved.

Value is determined by profitability, location, financial history, market comparisons, and asset values. Professional valuations use formulas based on SDE, asset lists, and market data.

The easy to understand breakdown

• Profitability: The more profit your restaurant makes, the higher its value. Think of profit as the money left after paying all your bills.
• Location: Restaurants in busy or popular areas are usually worth more because they get more customers.
• Financial History: If your restaurant has a steady record of making money each year, buyers will value it higher than one with up-and-down sales.
• Market Comparisons: We look at what similar restaurants nearby have sold for to help decide a fair price.
• Asset Values: This includes things like your kitchen equipment, furniture, and anything else of value that comes with the business.

Special Note: Professionals use formulas—like SDE (a way to measure the total profit an owner makes)—but you don’t need to know the math. Just remember, your restaurant’s value is mainly about how much profit it makes, where it’s located, and what it comes with.