|
 |
| | | | | |
 |
| |
Study uncovers souring restaurant chain valuation multiples |
| |
Extracts from article published on BVWire
A recently published study by Research and Markets highlights a disturbing trend in the restaurant industry. The 6th Annual Restaurant Valuation Trends Industry Data Report "outlines EBITDA multiple estimates on 30 chains based on data provided by several leading appraisal firms.” This year’s survey showed that “restaurant valuations declined to their lowest levels in four years ... ” Rising food and fuel costs and the tightening of credit markets makes this unlikely to change in the near future.
While investors and venture capitalists may be lukewarm on the restaurant market right now, a recent query found that by far, more Pratt’s Stats® users were looking for transaction data relating to SIC 5812 (restaurants, non-drinking) than any other industry (BVWire #67-4 Wednesday, April 23, 2008), suggesting that this industry is still quite dynamic.
Kevin Yeanoplos CPA/ABV, ASA (Brueggeman and Johnson Yeanoplos, P.C., Seattle, Washington), who has appraised many a restaurant, provided the BVWire with the following comments on restaurant valuation:
Some business appraisers make the mistake of focusing almost exclusively on the quantitative aspects of a restaurant, looking just at the raw numbers. The ability or inability of management to change a company's future economic performance is arguably the most important qualitative factor that should be considered. These qualitative factors are at least as important if not more important in determining the value of a closely-held business.
|
|
|
|
