The headline number

In the Bay Area in 2026, fully operating restaurants are selling at:

  • 1.8 – 2.5× SDE (seller's discretionary earnings) for typical full-service
  • 2.5 – 3.5× SDE for high-volume or branded concepts
  • 0.25 – 0.40× annual revenue as a rougher rule of thumb

For reference: SDE = net profit + owner's salary + add-backs (personal expenses run through the business). It's the number most buyers anchor on.

What moves a multiple up

  • Strong lease (5+ years remaining, transferable, reasonable rent-to-revenue ratio) — adds 20–40% to price
  • Branded concept (recognizable trademark, franchise potential) — +30–60%
  • Absentee operations (runs without owner present) — +15–25%
  • Beer/wine or full bar license — +$30K–$80K standalone value
  • Real estate ownership (you own the building) — separate transaction, but lifts business value

What moves a multiple down

  • Lease under 3 years remaining — major discount, often 30%+
  • High rent-to-revenue ratio (over 12%) — buyers pass
  • Declining revenue year-over-year — buyers expect at least flat
  • Owner-only operations (no documented systems) — perceived as risky
  • Pending health code issues — escrow blocker

By cuisine type (Bay Area, 2026)

  • Asian buffet / hot pot / Korean BBQ — strong demand, 2.2× – 3.0× SDE
  • Sushi / Japanese — premium valuations, 2.5× – 3.5× SDE for established
  • Boba / dessert / cafe — high volume relative to size, 0.3× – 0.5× revenue
  • Pizza & Italian — steady, 1.8× – 2.5× SDE
  • Bars with full liquor — 2.5× – 3.5× SDE, license value separate
  • Independent fine dining — lower multiples (1.5× – 2.0×) due to operator dependence

What changed from 2024

2024 was a buyer's market — labor costs and inflation crushed margins, and many owners listed at depressed numbers. 2026 has stabilized. Three shifts to know:

  1. Labor costs have stabilized at ~30% higher than 2019 baseline. Buyers price this in. Owners with documented automation (online ordering, tablet ordering, inventory software) get a premium.
  2. Lease assignment has become harder. Many SF landlords used the 2020–2023 vacancy crisis to add personal guarantees that don't transfer. Buyers are wary.
  3. Cash sales are back. Roughly 40% of our 2026 deals are cash buyers (vs. 25% in 2024). Faster close, simpler escrow, but lower top-end price than SBA buyers.

What an owner can do in 6 months to lift the price

  • Clean up the P&L — separate personal expenses, document add-backs
  • Renew or extend the lease before listing
  • Document systems — checklists, schedules, supplier relationships
  • Fix any deferred maintenance that would show in a buyer inspection
  • Stabilize revenue — small dips during the listing period are heavily penalized

Get your number

Valuations are situational. Two restaurants with identical revenue can be valued 40% apart because of lease, location, or staffing. The fastest way to know yours: request a free, confidential valuation →