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Chain Restaurant Unit Level EBITDA Multiples Continue To Strengthen

Restaurant Research LLC

www.ChainRestaurantData.com

Unit Level EBITDA Multiples Continue to Strengthen

  • RR's Restaurant Unit Valuation overview provides EBITDA multiple estimates (post G&A as outlined on page 6) for 34 chains based on survey data from 7 leading appraisal firms (responsible for approximately 3,010 store valuations over the last 6 months).
  • Our aggregate valuation multiple estimate continues to increase to 4.59x (since bottoming in January 2010 at 4.25x) with generally broad-based gains across every segment. We attribute the up-tick to improving sales trends, more stable unit economics, historically low interest rates and a slightly more favorable lending environment (as outlined on page 6). All-the-same, current valuation levels remain 6% below the July 2007 peak of 4.9x reflecting the post-recession use of stricter underwriting criteria and higher equity requirements.
  • Survey participants forecast higher EBITDA multiples over the next 6 months which reflects expectations for greater access to capital helped by slightly improving unit level economics.

Source: RR

Unit Level Valuation Report (34 Concepts): Semi-annual survey of valuation experts provides national chain EBITDA multiple and cap rate estimates plus a 6 month outlook. Mid-year restaurant finance update looks at current year budgeted restaurant loan originations versus actual results, borrower financial condition, next year loan origination expectations, and changes to underwriting standards. This data is useful to analyze and benchmark both unit level valuations and aggregate system values. For information on how to order the complete report, please contact Phil Mangieri at (203) 938-4703 or pmangieri@ChainRestaurantData.com.

Copyright 2012 Restaurant Research® LLC. All rights reserved.

Disclaimer of Liability: Although the information in this report has been obtained from sources Restaurant Research® LLC believes to be reliable, RR does not guarantee its accuracy. The views expressed herein are subject to change without notice and in no case can be considered as an offer or solicitation with regard to the purchase or sales of any securities. Restaurant Research's analyses and opinions are not a guarantee of the future performance of any company or individual franchisee. RR disclaims all liability for any misstatements or omissions that occur in the publication of this report. In making this report available, no client, advisory, fiduciary or professional relationship is implied or established. This report is intended to provide an overview of the restaurant industry, but cannot be used as a substitute for independent investigations and sound business judgment.