What is an acceptable EBITDA?

What is a good EBITDA? An EBITDA over 10 is considered good. Over the last several years, the EBITA has ranged between 11 and 14 for the S&P 500. You may also look at other businesses in your industry and their reported EBITDA as a way to see how you measuring up.

What multiple of EBITDA do restaurants sell for?

Valuations (measured by the EV/EBITDA ratio) in the restaurant industry are at 10.5x (as a median, in 2019) for publicly traded companies in the U.S. For more than ten years, the multiples for quick-service restaurants and fast-casual restaurants have been higher than that of casual dining restaurant chains.

How is a restaurant valued?

On average, restaurant owners look to sell at anywhere from 25\% to 40\% of their yearly operating income. To estimate the likely cost of buying a restaurant, determine the restaurant’s seller’s discretionary earnings (SDE), which is basically net income, and multiply the SDE by the restaurant’s industry multiples.

How many times EBITDA is a restaurant worth?

The rule of thumb is that a small independent restaurant may be worth 3x – 4x EBITDA while a multi-unit restaurant chain may be worth 6x EBITDA or more. In example, for an average restaurant that does $1M in sales and has a 10\% EBITDA margin ($100,000 of EBITDA), the value would range from $300k – $600k+ per location.

How much profit should you make in a restaurant?

The range for restaurant profit margins typically spans anywhere from 0 – 15 percent, but the average restaurant profit margin usually falls between 3 – 5 percent.

How do you value a fast food restaurant?

According to our data, fast-food restaurants sell for an average of 0.27x – 0.54x revenue multiple. You can calculate the implied value of the business by multiplying the amount of revenue or sales a fast-food restaurant makes by the valuation multiple.