Understanding restaurant valuation multiples is essential if you plan to sell or buy a restaurant in Vancouver. Multiples determine how much buyers are willing to pay based on earnings, risk, and growth potential.

In 2026, buyers are disciplined. They analyze cash flow, lease terms, and operational risk before agreeing to a multiple. This guide explains how valuation multiples work in Vancouver and how to improve yours.

What Is a Restaurant Valuation Multiple?

A valuation multiple is a number applied to earnings to estimate value. Most restaurants sell based on:

– Seller’s Discretionary Earnings (SDE) – EBITDA (larger operations)

Example: If a restaurant earns $150,000 in SDE and sells for a 2.5x multiple, the value is $375,000.

Typical Valuation Multiples in Vancouver

While every business is different, typical ranges include:

– 1.5x–2.5x SDE for small owner-operated restaurants – 2.5x–3.5x SDE for strong, systemized operations – 3.5x+ for premium concepts with management in place

Multiples depend on risk and stability.

SDE vs EBITDA – What Buyers Use

Most Vancouver restaurant transactions use SDE because: – Owners are hands-on – Compensation varies – Cash flow matters more than scale

Larger restaurants with management may be valued using EBITDA.

Factors That Increase Your Multiple

Buyers pay higher multiples for restaurants with:

– Consistent profits – Strong lease terms – Low owner dependency – Documented systems – Stable staff

Getting a professional Vancouver restaurant valuation helps identify improvement areas:

Factors That Reduce Your Multiple

Common value killers: – Short leases – Declining sales – Poor records – High owner involvement – Deferred maintenance

Lease Strength and Multiples

Lease terms are critical. Buyers prefer: – 5+ years remaining – Assignable leases – Reasonable rent

Weak leases reduce multiples regardless of profitability.

If you’re planning on selling a Vancouver restaurant, lease structure matters:

Market Conditions in 2026

Buyer demand remains strong, but financing is tighter. Restaurants with clean books and strong systems command higher multiples.

Comparables and Buyer Psychology

Buyers compare opportunities against featured restaurant listings in Vancouver:

Your multiple must align with market expectations.

How Brokers Influence Multiples

A restaurant business broker in Vancouver positions your business properly: – Sets realistic pricing – Highlights strengths – Manages negotiations

How to Increase Your Multiple Before Selling

Before listing: – Improve margins – Document systems – Strengthen lease – Reduce owner hours – Clean financials

Even small improvements can significantly raise value.

Common Misconceptions

– Higher revenue does not equal higher value – Emotional pricing doesn’t work – Buyers pay for cash flow, not potential

Final Thoughts

Restaurant valuation multiples in Vancouver reflect risk, stability, and opportunity. Owners who understand how multiples work and prepare properly achieve stronger sale outcomes.

If you want to understand your restaurant’s multiple, start with a professional Vancouver restaurant valuation: