While restaurant owners and operators — like their suppliers, their staff, and their customers — are facing severe price pressures in all areas of life, a new report suggests restaurant values themselves are also soaring.
The latest BizBuySell Insight Report found that the value of U.S. restaurants being sold increased 51 per cent year-over-year in the first quarter of 2022.
Restaurants sold for a median price of US$225,000 versus US$149,000 in the prior-year period.
The report, which includes data from more than 70 major U.S. markets and across 65 small business industries, including restaurants, also found that revenue is rising.
The median revenue of restaurants that were reported as sold in the first quarter of 2022 hit a record US$720,000, versus $600,000 in Q1 2021. That 20 per cent increase in revenue aligns with inflationary pressure on pricing and accompanying sales increases.
The rise in restaurant values and revenues is all the more remarkable when considering the report’s conclusion that overall businesses across all sectors reported a five per cent median revenue decrease in Q1 2022.
Discussing the report for QSR, Robin Gagnon, CEO and Co-Founder of We Sell Restaurants, America’s largest restaurant brokerage firm, notes that the increased value of restaurants creates an optimistic outlook for the industry.
“Higher selling prices presents itself as positive evidence that the industry is recovering,” Gagnon says. “As we know, inflation has positive and negative influences on the economy. While it isn’t the death of a deal for those interested in investing in a restaurant, it’s important for buyers to recognize the opportunities available to them, especially if they are willing to take a chance.”