How to value, appraise a restaurant, valuation of restaurant equipment, appraisal certified by CPPA Accredited Appraiser using valuation and appraisal principles.
$1,000 to $5,000 for small appraisals

Business Valuations and Appraisals Certified by Eric Jordan CPPA
* Appraisals to Support Litigation * Qualified Expert Witness *
$1,000 to $5,000 - Prepared in approximately one week, depending on your need.
An appraisal you can go to court with.

CLICK HERE to watch a short video clip about what we do.
(2 minutes 22 seconds)


Our experience shows most restaurant valuations fall into one of these three situations:

(1) Valuation of an ongoing business with assets, employees and lease in place.
(2)
Value of a restaurant that has ceased operations, but still has available lease, and a likelihood
---- that customers, and possibly staff, will return.  This will have a lot more value than a liquidation.
(3) Liquidation value.

A franchisor may want to buy the equipment at a liquidation price of $50,000. They will then spend $100,000 fixing it up and turn and sell it to another franchisor for $450,000 thereby making a fast $300,000 at the expense of the lender.  We try to keep these types of situations from happening.  A bankrupt franchise operation can still be worth a lot of money, certainly a lot more than equipment and leasehold improvements at liquidation price.
FACTORS AFFECTING VALUE

This is the key Point: If someone is presenting or proposing a valuation without taking these factors into consideration, the valuation number is likely to be misleading and almost certainly not accurate for a small business.

  • Financials
  • Return on Investment
  • How has R&D been accounted for?
  • Shareholder Agreement (if one exists)
  • Value of Employees
    (cost of recruitment and training as a group)
  • Client Base and cost to rebuild
  • Value of Supply Chain
  • Value of Distribution Network if one exists
  • Internet Presence and Use (social network)
  • Dominance if any in the marketplace
  • Knowledge Base of Owner and Employees
  • Processes and Procedures Documentation
    (How well are all aspects of the company documented?)
  • Industry Averages
  • Lease Terms
  • Leasehold Improvements
  • Equipment
  • Inventory
  • Risk
  • Currency Fluctuations and Geopolitical Considerations
  • Opportunity
  • Liquidity
  • Leverage - Cost of money.
    Is leverage applicable and if so at what risk?
  • Minority Interest (if applicable)
  • Special Interest Purchaser
    (Partners are also special interest purchasers as they have more knowledge, interest, and opportunity, with less risk than regular buyers.)
  • How well is the business/practice expected to function with changes in management? (if applicable)
Return on Investment is Always My First and Last Consideration

How Financials Can Be Deceiving:
(This is the kind of practical solution offered by our system.)

Accounting for tax purposes is totally different than interpreting financial statements for Business Valuation Purposes. Let us give you just one example: (Think Partnership or Divorce)

For tax purposes R&D is an expense in the year the R&D occurred. For the purpose of an accurate valuation the R&D should be amortized over a period of 5 to 12 years. HUGE DIFFERENCE.

The financials must be normalized to reflect proper treatment of R&D. If we didn’t do this a company could spend 95% (or all) of the profit on R&D and might successfully claim the company to be worth very little for a short period of time. Perhaps not fraud but certainly manipulation, depending upon the purpose. (Divorce or other partnership)


Profiles of some 2016 clients:
Most are in Edmonton, Calgary, Vancouver or Toronto

  • Multi Million Dollar Distribution Business- Valuation for purpose of sale.
  • Plumbing and Gas Business- Valuation for purpose of divorce proceedings.
  • Multi Million Dollar Eco Tour Business- Valuation for purpose of expansion loan.
  • Law Practice- Valuation for purpose of sale.
  • Lawn and Yard Maintenance business- Valuation for purpose of divorce proceedings.
  • Art Studio Franchise- Valuation for accounting purposes and CRA requirements.
  • Plumbing Business- Valuation for purpose of divorce proceedings.
  • Irrigation and Snow Removal Business- Valuation for purpose of divorce proceedings.
  • Large Retail Bakery- Valuation for purpose of sale to employee over 5 years.
  • Software Distribution rights in Canada- For Australian Parent Company (Agency Dispute.)
  • Janitorial Supply Business- Valuation for purpose of partnership dispute.
  • Tree Pruning and Lawn Business- Valuation for purpose of sale.
  • Battery Distribution Business- Valuation for purpose of sale.
  • Software Testing and Quality Assurance Company- Valuation for purpose of partnership dispute.
  • Blind Manufacturing and Installation Company- Valuation for purpose of legal action in partnership dispute.  This went to court on May 27, 2016 and resulted in our client receiving over 80% of the amount he sued for.
    Client is available as a reference.
  • Classic Car Renovation Business- Valuation for multi-million dollar lawsuit in Florida launched by Canadian partners.
  • Dance Studio- Valuation for purpose of establishing value for pending sale.
  • Cross fit GYM- Valuation for purpose of establishing a viable price for buyer to offer.
  • Jim’s Burger Location in US- Valuation for purpose of divorce proceeding.
  • Two Wholesale Bakeries- purpose of the valuation was to find values so the companies could merge.
  • Sign Manufacturing Business- Valuation for purpose of a minority shareholder leaving company.
  • Landscaping and Excavating Company- Valuation for purpose of divorce.
  • Day Care Facility- Valuation to support litigation and negotiation for damages inflicted by City in zoning error.
  • Accommodation Business- Valuation for purpose of sale.
  • Smoker Operation (8 pigs at a time in size)- Valuation for tax purposes.
  • Flooring Business- Valuation for purpose of sale.
  • Retail Wine Business (Franchise concept)- Valuation for purpose of sale.
  • Prop Business- Valuation for purpose of partnership buyout.
  • Computer Retail- Valuation for purpose of potential purchase.
  • Music Composer Business (original soundtracks for documentary movies and videos)- Valuation for purpose of divorce proceedings.
  • Two Pharmacy Locations- Valuation for purpose of sale consideration.
  • Luxury Bed and Breakfast combined with Events Business- Valuation for the purpose of sale.
  • Pool Building Company- Valuation for purpose of sale to family.
  • Automotive Related Business- Valuation for purpose of sale.
  • Specialized Manufacturing Firm within Printing Industry- Valuation necessary as someone expressed interest in purchase.
  • Daycare- Valuation for purpose of possible sale. (Interested Purchaser came forward)
  • Focused Builder- Valuation for purpose of establishing value for employee buy in.
  • Software Maintenance Contractors- Valuation for purpose of possible merger. (many millions of dollars)
  • Chiropractic Practice - Valuation for purpose of buy in.
  • Wholesale Food Business- Valuation for purpose of settling partnership dispute.
  • Accounting Firm- Valuation for purpose of divorce.
  • Call Centre- Valuation for internal purposes.
  • Hair Salon- Valuation for purpose of employee buy in.
  • Convenience Store and Gas- Valuation for purpose of lease dispute.
  • Specialized Builder of Restaurants- Valuation for purpose of employee buy in.
  • Wholesale Food Manufacturing and Distribution- Valuation for purpose of partnership buyout.
  • Retail Sporting Goods Franchise- Valuation for purpose of purchase.
  • Diesel Repair Shop- Valuation for purpose of partnership dispute.
  • Cellular Repair Company- Valuation for purpose of internal planning.
  • Roofing Company- Valuation for purpose of partnership consideration.
  • Upscale Personal Services Company- Valuation for purpose of internal planning.
  • Specialized Wheel Business- Valuation for purpose of sale.


WITH A FULL RESTAURANT VALUATION WE LOOK AT MORE THAN NUMBERS:

(1) ACCOUNTING:

First and last is (ROI) Return on Investment.
This starts by finding the real 'normalized net income'


Restaurant Valuation and Appraisal:

Cooking Equipment: Alto Shaam, Amana, APW Wyott, Bakers Pride, Belshaw, Blodgett, Cleveland, Doyon, Duke, Frymaster, Garland, Groen, Henny Penny, Hobart, Holman, Imperial Range, Jade Range, Keating, Lang, Magikitch’n, Market Forge, Merco Savory, Middleby, Panasonic, Pitco, Quest, Rational, Southbend, Steamcan, US Range, Vulcan, Wells, Winston, Wolf Preparation, Dishwashing, and Serving Equipment: Aladdin Temp-Rite, Berkel, Brute, Bunn, Carter-Hoffmann, Champion, Moyer Diebel, Cres-Cor, Dynamic, Globe, Hatco, Hobart, Jackson, Jet Spray, Metro, Nu-Vu, Quest, Robot Coupe, Star, Salvajor, SuzyQ, Univex, Varimixer, Waring Refrigeration and Bar Equipment: Arctica, Bally, Beverage Air, Blendtec, Continental, CDS, Cornelius, Delfield, Follet, Frosty Factory, General, Glastenders, Habco, Hoshizaki, Hussmann, Ice-O-Matic, Kelvinator, Manitowoc, Master-Bilt, Nor-Lake, Norbec, Perlick, QBD, Randell, Scotsman, Taylor, Traulsen, True, Victory, Vita-Mix, Waring Exhaust Hoods and Systems: CaptiveAire, CleanAir, Gaylord, Giles, Halton, Quest, Spring Air, UV Hoods
The word restaurant could be interchanged with cafe, dining room, cafeteria, food court, dining lounge, food bar, diner or many other terms. Restaurant became widely accepted in the 1950's and replaced diner and cafeteria as the new and modern term. Restaurants sometimes specialize in takeout food or catering. There can be many types of food served or it may have an ethnic bend to it. Seafood, beef, Chinese, or many other terms could be used to tell about the specific type of restaurant being run.

If you get a chance you should visit some of our favourite restaurants:

www.ororestaurant.com

www.milagrorestaurant.com

www.notabenerestaurant.com

www.marbenrestaurant.com

www.fridarestaurant.ca

www.donatellorestaurant.ca

www.stockrestaurant.com

www.ursa-restaurant.com

www.actinoliterestaurant.com

www.acadiarestaurant.com

www.thevillagecafe.net

www.mhkrestaurant.com

www.courtyardrestaurant.com

www.capitaldining.ca

www.atelierrestaurant.ca

www.goldenpalacerestaurant.ca

www.milestonesrestaurants.com

Other places to find valuation analysis.

http://hbr.org/product/restaurant-valuation-o-charley-s-and-afc/an/111081-PDF-ENG

http://softwaretopic.informer.com/restaurant-valuation-spreadsheet

http://www.investopedia.com/articles/stocks/08/restaurant-invest.asp

http://www.amazon.ca/Guide-Restaurant-Valuation-Edward-Moran/dp/193508125X

http://www.abebooks.com/9781935081258/Bvrs-Guide-Restaurant-Valuation-Moran-193508125X/plp

(2) VALUE TO WHO:
• To a liquidator
• To an operator who can operate more effectively through economy of scale
• To the current operator who may be looking to refinance


(3) INTANGIBLE ASSETS:
• Value to recruit and train the employees
• Value to duplicate the client base
• Value of systems, processes, procedures and any documentation that goes with
• Internet footprint including Social Media


(4) LEASEHOLD IMPROVEMENTS:
These need to be covered regardless of whether the building is leased or owned.
It is important that the right questions are asked in any comprehensive appraisal.


(5) HARD ASSETS: Determining fair market value.
Book value means nothing if we want to know the true value of the restaurant business.
• Restaurant Equipment
• Restaurant Inventory


(6) VALUE OF CASH FLOW:
This is calculated by finding the normalized net income then multiplying it by a ratio determined by risk, opportunity, and the intellectual property affecting the means to produce.

(7) RISK: What are the possible risks to your restaurant?
No appraisal can be completed without properly understanding risk.
• How long is the restaurant business lease?
• Are there reasonable options to extend the lease?
• If the owner of the building also owns the restaurant has the rent been paid at market rates?
• Are you in a one industry area, or is the area changing?
• Are industry trends your friend or enemy?
• Are there any Government regulations?
• Staffing?
• Competition and pricing challenges?
• Changes to accessibility? Road changes?
• How good is the succession plan, and do you even have one?
• Operations and Training Manuals - How complete?
• Additional questions depending upon the answers given.

You can expect your report back to you in approximately one week.

As you can well understand, no computer program, gross sales or other rule of thumb guessing techniques are going to be helpful for you in determining the real value of your restaurant. In fact, these techniques could harm you. Valuation and appraisal is our full time business. We do a lot of restaurant valuations and other business valuations.


OUR UNIQUE BUSINESS OPPORTUNITY:

Do you have a business friend who might like to learn Valuation?
5-25 years business experience a must.
Small investment required.

We have a business opportunity available for someone with at least 5 years successful business experience who would purchase our training and operate under license as an independent Business Valuator.  Being fluent in a second language may also be an asset. Call for details. 1 800 606 0310 or email eric@pin.ca. Click the triangle below for an audio message and more information.

This can be an add-on business or a full time business operated from a home office. This is a relationship business. Everyone’s life is different. With this work you could choose to build your relationships with the accountants and lawyers in the eight nicer months; then work winter in a warmer climate with good Internet. You will need to fly out for two to three weeks of hands on training and the rest will be in your home town, on the job, phone, and Internet.

Trust Your Accountant and/or Lawyer

Show this information to your accountant and your lawyer. Ask them if they would refer clients to you if you were to take the training and work with us? Remember most of the work initially will done by us. I expect both your accountant and lawyer will tell you they could refer 1 to 3 clients per year. It is then a question of how many accountants and lawyers you can build relationships with. If you are not totally confident you could bring 12 to 15 clients in the first year you should not consider doing this.

Contact me for more information. I can send a valuation example and more details.
To be considered you must have at least 5 years of successful business experience.
If you truly enjoy learning and working with intangibles, this could be rewarding at many levels!

Eric Jordan (CPPA) www.pin.ca
209 - 1027 Pandora Ave. Victoria, BC - 1 800 606 0310
Victoria - Vancouver - Edmonton - Calgary - Saskatoon - Regina - Winnipeg - Ottawa - Toronto
Fees range from $1,000 to $5,000 - Average $3,500

Business Valuator Services Available Across Canada 1-800-606-0310
Do You Want to Work in the Valuation Field?

Listen to an audio message from Eric Jordan.

Become licensed to use our proprietary process in understanding the
25 most important Factors Affecting Value


How to Value a Restaurant
Generally $1,000 to $2,500
Call for exact pricing for your situation.

 
 
Eric Jordan, CPPA
Free consultation.
Call or email now!
1-800-606-0310
eric@pin.ca

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business opportunities and homes for sale by owner.


How to value a restaurant or price restaurants using valuation and appraisal principles for $1,000 to $5,000

THE MOST POPULAR BRANDS OF RESTAURANT EQUIPMENT WE SEE IN CANADA:

  • Cooking Equipment
    Alto Shaam, Amana, APW Wyott, Bakers Pride, Belshaw, Blodgett, Cleveland, Doyon, Duke, Frymaster, Garland, Groen, Henny Penny, Hobart, Holman, Imperial Range, Jade Range, Keating, Lang, Magikitch’n, Market Forge, Merco Savory, Middleby, Panasonic, Pitco, Quest, Rational, Southbend, Steamcan, US Range, Vulcan, Wells, Winston, Wolf

  • Preparation, Dishwashing, and Serving Equipment:
    Aladdin Temp-Rite, Berkel, Brute, Bunn, Carter-Hoffmann, Champion, Moyer Diebel, Cres-Cor, Dynamic, Globe, Hatco, Hobart, Jackson, Jet Spray, Metro, Nu-Vu, Quest, Robot Coupe, Star, Salvajor, SuzyQ, Univex, Varimixer, Waring

  • Refrigeration and Bar Equipment:
    Arctica, Bally, Beverage Air, Blendtec, Continental, CDS, Cornelius, Delfield, Follet, Frosty Factory, General, Glastenders, Habco, Hoshizaki, Hussmann, Ice-O-Matic, Kelvinator, Manitowoc, Master-Bilt, Nor-Lake, Norbec, Perlick, QBD, Randell, Scotsman, Taylor, Traulsen, True, Victory, Vita-Mix, Waring

  • Exhaust Hoods and Systems:
    CaptiveAire, CleanAir, Gaylord, Giles, Halton, Quest, Spring Air, UV Hoods