Can an online calculator tell me what my restaurant is worth?
An online calculator can only work from the few answers you type in, so it can give a rough starting point at most. It cannot see how much lease is left, how many hours you work, which costs are one-offs or how your till compares with your books. Gathering those facts first helps you judge how buyers will read your file.
A restaurant calculator is a form that asks a handful of questions and returns a number. That can be a fair way to start thinking about a sale, but the number is only as good as the few answers behind it. The things that decide how a buyer sees your restaurant are mostly not on the form.
What the form asks and what it cannot see
Most calculators ask for sales, a rough profit figure, location and years open. They cannot see the lease, so they do not know how much term remains or whether the landlord will consent to an assignment. They cannot see equipment age, repairs you have put off, or whether the premises need work. A buyer will ask about every one of these, and each can move the conversation a long way.
Your hours, your pay and your add-backs
A buyer wants to know what the restaurant earns once someone is paid fairly to run it. A calculator does not ask how many hours you work, whether family help is paid, or which costs are personal or one-off. Your accountant can help you list those adjustments clearly. Unexplained add-backs lose a buyer’s trust quickly, so only include ones you can document.
When the till and the books disagree
If the sales you tell a buyer differ from what your financial statements show, expect hard questions. A calculator will accept whichever figure you type. A buyer’s accountant will compare point-of-sale reports, bank deposits and statements. Know in advance where they differ and why, and have the explanation ready in writing.
What to do instead before you list
- Gather several years of statements, sales reports and tax filings so they match.
- Read your lease and note the remaining term, renewal rights and assignment wording.
- List equipment with its age, condition and whether any of it is leased.
- Ask your accountant to prepare the adjustments you plan to show.
- Talk to a broker or an advisor who sells restaurants about how buyers will read your file.
For how a restaurant is valued in more detail, read how much is my restaurant worth.
Related reading
13 pages on the same subject, grouped by topic.
Selling
- Expert answerShould I sell my restaurant through a broker who specialises in restaurants?
- GuideSelling a restaurant in Canada
- Expert answerHow do I sell an independent pizzeria?
- GuideHow do I sell my cafe?
- GuideSelling a café or coffee shop in Canada
- Expert answerHow do I tell my diner’s regulars about a sale without upsetting them?
Due diligence
Buying
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to minimize negotiations when selling your business
- 02Business Development Bank of CanadaIndustryHow to sell your business
- 03Business Development Bank of CanadaGovernment13 terms you need to understand before signing your commercial real estate lease
- 04Restaurants CanadaIndustryRestaurants Canada - The Voice of Foodservice
Deavo is an advertising and listings platform, not a brokerage, law firm or valuation firm. This page is general information, not legal, tax, accounting or valuation advice, and rules differ by province. Confirm anything you rely on with a qualified professional before you act on it.