The 6th Annual Restaurant Valuation Trends Industry Data Report outlines EBITDA multiple estimates on 30 chains based on data provided by 7 leading appraisal firms (responsible for approximately 5,500 store valuations over the last 12 months).
Restaurant valuations declined to their lowest levels in 4 years and cap rates continued to rise to their highest levels in recent history, reflecting a perfect storm of deteriorating sales and store profit margins (driven by increasing commodity and labour costs), falling real estate prices, tighter credit markets and fewer lenders. Not surprisingly, the casual segment has been hit the hardest and has the worst outlook.
The outlook over the next 12 months remains bearish as rising food and fuel costs continue to weigh on operators and consumers alike while credit market tightness is expected to continue.
