Restaurant valuation – correctly assessing property value, inventory, and business operations

The question of a restaurant's value is more complex than that of traditional real estate. It involves several different components: the land, the building, the inventory, and the business operations. Each component requires its own valuation method – and only when viewed as a whole can a realistic market value be determined.

Den richtigen Wert eines Restaurants zu ermitteln ist nicht trivial.

1. Property value – basis of valuation

The property value is usually based on the standard land value . This is published by appraisal committees and reflects the quality of the location. The decisive factors are size, buildability, potential uses, and the surrounding area.

2. Property value – different valuation methods

There are different methods for determining the value of the property itself:

• Estimation / simplified valuation:

  A common approach is to calculate based on usable area × construction price per m² minus discounts for age, condition and necessary modernization.

• Comparative value method:

  Here, the property is compared with similar restaurant properties that have recently been sold. This is particularly relevant in cities or tourist regions with a high market density.

• Asset valuation method (expert):

  A publicly appointed appraiser can determine the building's value in detail, taking into account the property's replacement value less depreciation.

• Income approach:

  In the case of leased or rented catering properties, the income (rental/lease income) is often taken as the basis, capitalized using a market factor.

3. Inventory value – equipment and technology

The inventory is usually valued using the net asset value method :

• The starting point is the replacement value of the existing equipment and technology.

• Deductions for wear and tear and age are made.

• The result is today’s current value.

An inventory list with individual items (kitchen appliances, furniture, cash register systems, etc.) is recommended here.

4. Goodwill – Valuation of ongoing operations

Even more challenging is the evaluation of the actual restaurant operation. Various methods are used here:

• Income approach:

  The focus here is on future sustainable profits . The average profit of the past few years is capitalized – less imputed entrepreneurial wages and lease equivalents.

• Multiplier method:

  Often used in the hospitality industry: Sales or EBITDA multiples are used, which are derived from industry benchmarks (e.g. 3–5× EBITDA depending on the location and concept).

• Intrinsic value method:

  Only useful for businesses without significant profits. Here, the value of assets (inventory, stocks, and possibly trademark rights) is determined.

• Goodwill valuation:

  Factors such as brand awareness, regular customers, reputation or location quality can represent intangible added value.

5. Private assets vs. business assets

An often underestimated point: the tax treatment of the sale .

• Private assets: A sale may be tax-free after the speculation period has expired.

• Business assets: Here, the sale regularly triggers taxation of hidden reserves.

A tax advisor is essential here to avoid unpleasant surprises.

6. Realistic figures as a basis for evaluation

Even if a buyer recognizes the potential to significantly increase profits, the valuation is based on actual, verifiable business figures. This protects buyers from excessive prices and gives sellers a solid basis for negotiation.

7. Why Absolut Gastronomie Immobilien is the better choice

Regular real estate agents often only value land and buildings. Absolut Gastronomie Immobilien goes much further:

• Holistic valuation: land, property, inventory, business operations.

• Application of industry-specific valuation methods (earnings value, multipliers, goodwill).

• Experience with tax and legal issues related to business sales. (But no guarantee)

• Access to buyers and investors who understand the industry.

In this way, we create a sound basis for sellers and a realistic offer for buyers.

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Conclusion:

Determining the value of a restaurant requires a combination of real estate appraisal and business analysis. The land, buildings, inventory, and business operations must be considered, along with tax considerations. This is the only way to obtain a fair picture of the market value. With the expertise of Absolut Gastronomie Immobilien, owners secure a professional and reliable foundation for a successful sale.

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