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How much can a restaurant franchise sell for?

Updated: 8/18/2019
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Gewitterhexe

Lvl 1
13y ago

Best Answer

It depends on the location, the palatability of the product, and the popularity of your restaurant Franchise.

A good way would be to look for any similar businesses that are trading publicly, then make comparisons by their value.

For example, you would look at the "p/e" (market value of the company divided by the earnings) of the company, say McDonald's for instance as shown here at Yahoo! Finance: http://finance.yahoo.com/q?s=MCD.

As of 09-21-2010, the P/E value of McDonald's is "17.12". Multiply this number by the earnings of your company.

So if your company grosses $1 million dollars annually, the value of it would be $17 million.

This is just a sample. You'd need to do research on a lot of restaurants, and find the ones that are most similar to yours.

What you should also know is that when competitors want to buy out a company, they often pay more than the current market value in order to allure the owners into selling, but when the owners want to sell the company, they often sell for less, justifiably the natural way of supply & demand.

You can find a list of food franchise opportunities, as well as Franchises from other industries that may be adjacent to your Business under related links below.

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13y ago
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