The short answer: Small independent restaurants sell for roughly 2.26× SDE, or about 30%, 50% of annual revenue as a wider rule of thumb, a $1,000,000-revenue restaurant with $150,000 SDE prices near $339,000, $400,000. With an SBA 7(a) loan you put down roughly 10% (~$34,000) plus closing costs, a liquor license transfer, and working capital. Pay toward the top of the range only for a long lease with renewal options, a transferable license, and controlled prime cost.
Purchase price by restaurant size
Restaurant pricing is anchored by SDE more than by revenue, because revenue tells you almost nothing about prime-cost discipline. Even so, most brokers quote both. For a restaurant running a healthy ~15% SDE margin, the two anchors below give a workable range, but expect more spread than in an asset-light services business, since equipment condition, the lease, and the liquor license all swing price independently of the P&L.
The price on the listing is a starting point. The lease, the license, and the prime cost are what actually decide what the restaurant is worth.
| Revenue | SDE (~15%) | Price @ 2.26× SDE | Price @ ~0.4× revenue |
|---|---|---|---|
| $500,000 | $75,000 | $169,500 | $200,000 |
| $1,000,000 | $150,000 | $339,000 | $400,000 |
| $2,000,000 | $300,000 | $678,000 | $800,000 |
Independent restaurant valuations run about 30%, 50% of annual sales as a revenue-based rule of thumb, or 1.5×, 3× SDE for single-unit owner-operated concepts, with profitable, systematized independents reaching 3×, 5× SDE. Check current comps on the restaurant multiples page.
What moves the multiple
| Pushes multiple up | Pushes multiple down |
|---|---|
| Long lease with renewal options, rent ≤6% of sales | Short lease, no renewal, occupancy cost above 10% |
| Transferable, scarce liquor license | No license, or license tied to entity/uncertain transfer |
| Prime cost controlled at 60%, 65% of sales | Prime cost running near or above 70% |
| Tenured kitchen manager and staff who stay | Owner does all the cooking and ordering personally |
| Modest, healthy third-party delivery mix | Revenue heavily dependent on 25%, 30% commission apps |
Down payment & the full cost stack
The sticker price isn't the cash you need. On an SBA 7(a) restaurant acquisition, budget for:
- Equity injection, ~10% of project cost. Part can sometimes be a seller note on full standby that counts toward your injection.
- Liquor license transfer, filing fees typically in the low thousands, plus legal work, and the license approval timeline (up to 180 days) can affect your closing structure.
- Lease assignment application, landlords often require a personal financial statement and credit check as part of approving the assignment; budget for legal review of the guarantee terms.
- SBA + closing fees, guaranty fee, packaging, and closing costs.
- Equipment inspection & repairs, a hood, walk-in, or line-equipment issue found in diligence can mean real capex before or right after close.
- Working capital, payroll, food inventory, and smallwares through the first few volatile months before you've proven out the new ownership.
The license can be worth more than the equipment
In scarce, quota-controlled markets, a full liquor license can carry six-figure standalone value. Get it appraised or comped separately from the restaurant's cash flow, don't assume it's baked into the SDE multiple.
A worked deal
You buy a restaurant with $1,000,000 revenue and $150,000 SDE at 2.26×, a $339,000 price.
| Line | Amount |
|---|---|
| Purchase price (2.26× $150K SDE) | $339,000 |
| Equity injection (~10%) | $33,900 |
| SBA 7(a) loan (~90%) | $305,100 |
| Est. annual debt service (10 yr, ~11%) | −$51,900 |
| SDE available | $150,000 |
| Cash flow after debt (pre-owner-wage) | $98,100 |
| DSCR (SDE ÷ debt service) | ~2.9× |
Even after the loan payment, the restaurant throws off ~$98K before you draw a formal salary, and the DSCR clears lender minimums with room to spare, provided prime cost holds and the lease and liquor license transferred as underwritten. That "provided" is doing more work here than in most industries, which is why lease and license diligence come before you finalize financing, not after. Model your own version in the valuation calculator, then read how SBA financing works.
Run this deal with your numbers
Price, down payment, loan payment, and cash flow after debt, instantly.
Frequently asked questions
Small independent restaurants commonly sell for roughly 2.26x SDE, or about 30%, 50% of annual revenue as a wider rule of thumb. A $1,000,000-revenue restaurant with $150,000 SDE typically prices near $339,000, $400,000. With an SBA loan you'd put down ~10% (~$34,000) plus closing costs, license transfer fees, and working capital.
SBA 7(a) generally requires ~10% equity. On a $339,000 restaurant that's ~$34,000, and part can sometimes be covered by a standby seller note. Budget extra cash beyond that for the liquor license transfer, working capital, and diligence.
Around 2.26x SDE is a reasonable anchor, with single-unit independents typically trading 1.5x, 3x. Pay top-of-range only for a long lease with renewal options, a transferable liquor license, tenured staff, and controlled prime cost.
Yes, SBA guaranty and packaging fees, liquor license transfer fees and legal work, equipment inspection and repairs, a landlord lease-assignment application, and working capital through the first volatile months. These add several percent on top of the down payment.
Sources
- Restaurant revenue & earnings multiples, BizBuySell Valuation Benchmarks (2025); We Sell Restaurants.
- Liquor license transfer costs & value, We Sell Restaurants.
- Lease assignment & occupancy cost, Acquisition Stars; theBrokerList.
- SBA 7(a) equity injection & DSCR standards, sba.gov 7(a) program; SOP 50 10 8.
