Selling a Restaurants Business

Most independent restaurants sell as a multiple of cash flow, usually SDE for owner-operators and sometimes EBITDA for multi-unit groups. Value tends to follow risk: clean POS-to-bank tie-outs, stable prime cost, a lease that assigns cleanly, and managers who can run service usually support a stronger multiple. High all-in rent, messy tip or tax practices, and heavy owner dependence tend to drag price down. For a quick starting point, use Rejigg’s free valuation calculator, then sanity-check it against your lease terms and prime cost trends.

Yes, SBA 7(a) is common for restaurant acquisitions, but lenders want a file that reads clean. Expect scrutiny on tax returns, POS-to-bank deposits, tip reporting, payroll taxes, and whether the lease assignment is straightforward. Many lenders also discount aggressive add-backs, especially if the support is thin or cash handling is informal. Before you set a price, run rough payment and down payment scenarios using Rejigg’s SBA loan calculator so you know what a buyer can actually finance.

Many prepared restaurant sales close in about 2–6 months, but timelines vary by market, concept, and licensing. Landlord consent and liquor license steps are two of the most common delays. Buyers also need time to review POS reports, payroll and tip practices, and equipment condition. Deals move faster when you can answer diligence questions quickly with organized documents. Rejigg helps by keeping your data room, buyer Q&A, and next steps in one place.

No. A broker can help with pricing, marketing, and managing the process, and fees are often 5–10%, depending on size and market. If you already have buyer interest or you’re comfortable running a structured process, you can do it yourself. Rejigg provides pre-vetted buyers, digital NDAs before sharing sensitive details, a secure data room for diligence, and a dashboard to compare offers and terms side-by-side, free to the seller.

Most small restaurant deals are asset sales, where the buyer purchases equipment, leasehold improvements, and goodwill, and avoids unknown liabilities tied to the entity. Stock sales can make sense when a license, contract, or permit is hard to move, but buyers usually treat them as higher risk and ask for stronger protections. The right structure depends on your entity, licensing, and taxes, so it’s worth looping in your CPA and attorney early. Rejigg’s deal tracking helps you compare offers across structure, holdbacks, and contingencies.

Common add-backs include owner pay, personal expenses run through the business, one-time repairs, non-recurring professional fees, and unusual marketing or opening costs that won’t repeat. Restaurants get extra scrutiny around cash adjustments and anything tied to tips because buyers and lenders want it to match payroll records and tax filings. If an add-back can’t be backed up with invoices, POS logs, or payroll reports, it often gets discounted. Rejigg’s data room makes it easier to attach proof next to each add-back.

Gift cards are usually treated as a liability because customers will redeem them after closing. Some deals credit the buyer at closing for the outstanding balance, while others keep the liability with the business and adjust price or working capital based on expected redemption. What matters is having a report buyers trust, typically pulled from the POS: sold, redeemed, and outstanding balance. If you add that report to your Rejigg data room early, it usually becomes a clean line item instead of a last-week fight.

Liquor license rules depend on your city and state. Some licenses transfer with approval, some require a new application, and some allow temporary authority while the transfer is pending. Timing can drive the deal, especially if alcohol is a meaningful share of sales, because approval delays can push closing or force a temporary operating plan. Buyers will ask how the license is held and what steps and timelines apply. Rejigg helps you share license documents and a written transfer plan under NDA so buyers can underwrite timing early.

Many restaurant deals are structured cash-free and debt-free, but the buyer still needs enough cash to cover payroll timing, inventory turns, and vendor terms. This varies by concept and sales mix, especially if delivery app payouts lag a few days. Some deals include a target inventory level or a small cash buffer, and others treat inventory as a separate purchase at cost. Spell it out in the LOI so it doesn’t turn into a closing-day dispute. Rejigg’s offer comparison view helps you line up offers with different working-capital assumptions.

Only if the purchase agreement says you can. Most buyers expect the name, logo, domain, phone number, and online profiles to transfer because that’s a big part of preserving traffic after closing. Recipes are more negotiable. Some sellers share full recipe books late in diligence or share enough detail to prove consistency without giving away everything on day one. Clear schedules in the purchase agreement help avoid confusion. Rejigg’s NDA and staged data room access let you share sensitive brand and recipe materials only with verified buyers.

Non-competes are common because the buyer is paying for local goodwill and doesn’t want the seller opening a similar spot down the street. Terms often include a radius and time period, but what’s enforceable depends on the state and current legal rules. Many deals also include non-solicitation language to prevent poaching staff. Your attorney should tailor the restriction to the neighborhood and concept so it has a reasonable chance of holding up. Rejigg’s deal tracker keeps restrictive covenant terms visible across offers.

Seller financing can bring in more buyers and sometimes support a higher headline price, but you take repayment risk. Terms matter: interest rate, amortization, security, personal guarantee, and what happens if the buyer defaults. Restaurants can be volatile in the first year after a handoff, so a realistic transition plan and clear reporting requirements can help protect you. If the buyer is SBA-backed, seller notes are often allowed but must fit SBA rules. Rejigg’s offer dashboard helps you compare a higher price with a note versus a lower, cleaner offer.

An earnout pays part of the purchase price based on post-close performance, like revenue or cash flow hitting a target. In restaurants, earnouts can be hard to administer because results depend on staffing, menu decisions, hours, and the buyer’s execution. Disputes are common unless the metric is objective and the rules are tight, often POS-based reporting with clear definitions. Earnouts tend to fit best when the buyer plans to run the concept largely the same way. Rejigg keeps earnout terms structured and comparable across offers.

Have 2–3 years of P&Ls and tax returns, POS exports by channel and daypart, bank statements, delivery app statements, payroll summaries, lease and amendments, an equipment list with service records, recent health inspection reports, and a clear list of what transfers (name, domain, online accounts, phone number). Buyers move faster when these are ready on day one, especially if you can tie POS to bank deposits. Rejigg includes a built-in data room and checklist in the prepare-to-sell guide so you package it once.

Confidentiality comes down to controlling who sees what, and when. Many sellers start with a blind summary and require an NDA before sharing the restaurant name, address, financials, or lease. Then they stage diligence so only serious buyers see payroll details, vendor pricing, and sensitive operational documents. Timing matters, too, especially with managers. Rejigg supports this workflow: buyers are pre-vetted, NDAs are signed digitally, and you control document access inside the secure data room.

A common transition is 2–8 weeks, and most of the heavy lifting happens in the first couple of weekends. Sellers often help with vendor and landlord introductions, ordering and pars, manager coaching, and the handoff of accounts like POS, reservations, delivery apps, phone, and Google Business Profile. If the restaurant is highly owner-run or the buyer is installing a new GM, it can take longer. Put the plan in writing so everyone has the same expectations. Rejigg’s transition planning guide helps you map it.

Yes. Seasonality is normal in restaurants, but buyers will ask for proof and a plan. Bring monthly and daypart POS reporting, plus a playbook for slow periods, which might include reduced hours, a smaller menu, private events, catering, or partnerships with nearby venues. If slow months are predictable and managed, buyers can underwrite them. If they look like chaos, buyers price in risk. Rejigg helps you present seasonality with charts and standardized reports so you stop answering the same “why is January low?” question.

Taxes depend on your entity type, the deal structure, and how the purchase price gets allocated across equipment, inventory, goodwill, and any non-compete. In an asset sale, depreciation recapture on equipment can create a bigger tax hit than many owners expect, and goodwill is often taxed differently than ordinary income items. State and local taxes may apply, and you’ll want a plan for final payroll and sales tax filings. Bring your CPA in before you sign an LOI so allocation and structure are negotiated intentionally. Rejigg helps you keep offers and allocation terms organized through deal negotiation.