Valuing a cafe or restaurant

VALUING A CAFE OR RESTAURANT image by Rushmore Group
A capitalisation of revenue valuation methodology is often used to value a cafe

Coffee and visiting a local cafe are part of many Australians’ daily routine. Australians are known for their love of quality coffee and this is reflected by the number of cafe’s across Australia.

At Rushmore Group we provide cafe and restaurant valuation reports for a range of purposes including:

  • Purchase or sale of the Business.
  • Taxation purposes.
  • Family Law.
  • Shareholder disputes; and
  • Other Court proceedings.

There is a sizeable market for buying or selling a cafe or restaurants.

Many operators of cafes and restaurants internally measure their weekly takings and in our experience many acquisitions are undertaken on the basis of a multiple of weekly takings (or weekly revenue).

The advantage of the use of a capitalisation of revenue methodology is that the expenses of the Business do not require normalisation. Normalisation adjustments are typically seen with private expenditure, non-operational expenditure, motor vehicle expenditure and the salaries and wages of the Directors of the entity.

Cafe’s and restaurants can also be valued using a more traditional capitalisation of future maintainable earnings (FME) methodology.

More information
We provide cafe and restaurant valuation reports for clients across Australia. If you would like further information in relation to a cafe or restaurant valuation, then please don’t hesitate to contact us now at 1800 454 622 or via email at info@rushmoregroup.com.au

Andrew Firth (Author)

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