Category Archives: Capital and Ownership

A restaurant’s sustainability and growth potential are highly driven by its capitalization and the amount of liquid assets (like cash) that it retains. If a restaurant is not properly capitalized, its operations will be strained, vendors will not extend terms, and it will be unable to take advantage of growth opportunities. If a restaurant is

You’ve tasted success with your restaurant, and now you’re looking to savor more of it, perhaps by adding more seats, sprucing up the décor, or even taking a leap to open a brand-new location. As enticing as expansion can be, it often comes with a side dish of financial challenges. How do you fund this

In Part 1, we outlined how to assess the viability and value of a new restaurant project using the sales-to-investment ratio. In this article, we walk you through valuing an existing restaurant and how these valuations are determined by thinking like an investor, and describe common pitfalls and factors that could affect a restaurant’s valuation.

Building a new restaurant, expanding or selling an existing restaurant, or admitting a new partner require an accurate valuation so that you will know how to structure the terms of a deal. Whether you are a single-unit or multi-unit concept, the value of your restaurant is mostly driven by profitability and cash flow at the

“How much should restaurant owners be paid?” is not the most common question we get, but it is certainly a key question that should be asked and answered. A successful restaurant must be able to create value beyond its owner’s abilities. The only way to understand a restaurant’s value creation is through accurate and representative

Welcome to the second portion of restaurant capital and ownership series: How Distributions and Profit and Loss Allocations are Taxed! In Part I, Raising and Distributing Capital for Restaurant Startups, we discussed what capital is, how to read an operating agreement, and we walked through an example showing how capital is distributed among owners. In

This is part 1 of a 2-article series. Please check back to read our article on taxation of distributions and allocation of profits and losses. You are a restaurateur with a great idea for a restaurant and feel it is a cannot-miss investment opportunity. There are several different options to raise the capital you need