How much does a business broker charge?

Business broker commissions range from 5–12% of the final sale price depending on deal size. Smaller businesses (under $1M) typically pay 10–12%, while mid-market businesses ($1M–$5M) pay 6–10%. Some brokers also charge an upfront retainer of $2,500–$15,000 for CIM preparation, which is usually credited back at closing.

How long does it take to sell a business?

Most small to mid-market business sales take 6–12 months from broker engagement to close. The stages include CIM preparation (4–8 weeks), buyer outreach and qualification (4–12 weeks), due diligence (30–90 days), and closing (2–4 weeks). SBA-financed deals add 30–60 days to the timeline.

What is seller's discretionary earnings (SDE)?

Seller's Discretionary Earnings (SDE) is the standard valuation metric for small businesses. It equals net profit plus owner salary, owner benefits, non-recurring expenses, and depreciation/amortization. SDE represents the total economic benefit to a single owner-operator. Most small businesses sell at 2–4× SDE.

Do I need a business broker to sell my business?

While you can technically sell without a broker, data consistently shows brokered transactions close at 15–25% higher prices and at higher completion rates than unrepresented sales. The exception is if you already have an identified buyer at an agreed price. In any other scenario, professional representation pays for itself many times over.

What is an IBBA-certified business broker?

The International Business Brokers Association (IBBA) is the professional body for business brokers. IBBA-certified brokers hold designations like CBI (Certified Business Intermediary) or M&AMI (Merger & Acquisition Master Intermediary), which require transaction history, continuing education, and adherence to a code of ethics. These certifications signal professional commitment and deal experience.

What is the difference between a business broker and an M&A advisor?

Business brokers typically handle Main Street and lower-middle-market transactions — businesses selling for $100K to $10M. M&A advisors operate in the middle market ($10M to $500M+) with larger teams, investment banking capabilities, and institutional buyer relationships. For businesses under $5M, a CBI-certified business broker is usually the right choice.

How to Sell a Restaurant

Restaurants are among the most complex businesses to sell. Thin margins, lease dependency, and high owner-involvement make proper broker selection critical. Here is what experienced restaurant sellers do differently.

Restaurant Valuation: What's Realistic

Restaurant businesses typically sell at 1.5–3.5× seller's discretionary earnings (SDE) for independent operators, or 3–5× EBITDA for larger, more institutional concepts. The variance is significant because restaurants are highly sensitive to lease terms, concept strength, and how much of the operation depends on the owner personally.

Restaurant Multiple Ranges

Struggling or thin margins

0.5–1.5× SDE

Often asset sales only, buyer pays for FF&E + lease

Stable independent

1.5–2.5× SDE

Good location, consistent cash flow, some key-man risk

Strong independent

2.5–3.5× SDE

Multiple revenue streams, management team, loyal base

Franchise / multi-unit

3–5× EBITDA

Brand value, established systems, SBA-financeable

The Lease: Your Single Biggest Selling Variable

Most restaurant deals die over the lease. Buyers need a lease assignment or new lease with enough remaining term (typically 5+ years) and favorable economics. Before you even think about going to market, review your lease for:

→Assignment clause — does it allow transfer without landlord consent?

→Remaining term — less than 3 years remaining makes financing difficult

→Below-market rent — is your rent well below current market? That's a major asset.

→Personal guarantees — what guarantees can be removed at sale?

→Renewal options — are there options, and at what rate?

A favorable, long-term, below-market lease is worth real money to a buyer. An experienced restaurant broker will quantify this and use it as a selling point. A generalist broker won't know how to present it.

Who Buys Restaurants

Individual Owner-Operators

First-time buyers or industry veterans buying their first or second location. Most will use SBA financing, which means the business needs to cash flow well after debt service. These buyers move slowly and require a lot of hand-holding.

Multi-Unit Operators

Experienced restaurateurs looking to add locations. They move faster, need less explanation, and know exactly what they're buying. They will negotiate hard on price but often close cleaner than first-timers.

Franchise Developers

If your concept is franchised, area developers and multi-unit franchisees are often the most active buyers. They have established financing and understand the brand system.

Preparing to Sell Your Restaurant

Get 3 years of clean POS data

Restaurant buyers live and die by POS data — sales by day, time, category. Weekly and monthly trend reports are expected. If your POS system doesn't produce clean reports, fix that before going to market.

Document all add-backs carefully

Restaurant owners run significant personal expenses through the business — vehicle, cell phone, family payroll, owner meals. Document every add-back with supporting records. Buyers and their accountants will verify them.

Address deferred maintenance

Buyers will identify every piece of equipment that needs service and use it as a negotiating tool. A cheap walk-through with a restaurant equipment specialist before listing saves you negotiation headaches.

Reduce key-man risk

If the chef is you, or if regulars come specifically for you, that's a problem buyers will price in. Spend 12+ months transitioning customer relationships to front-of-house managers or sous chefs.

Organize permits and health records

Health inspection history, liquor license status, CO of occupancy, and any permits for kitchen modifications. Buyers will request all of these and slow deals result from disorganized records.

Why Restaurant Deals Fall Apart

Lease landlord won't cooperate

Negotiate with your landlord before listing, not after you have a buyer. Landlord resistance at the end of a deal is the most common deal-killer.

Buyer can't get SBA financing

If the business doesn't service debt, no SBA loan. Make sure your EBITDA after reasonable management salary supports the debt load before going to market.

Health department issues

An open health violation discovered in due diligence will kill or severely complicate a deal. Address any outstanding issues before listing.

POS data doesn't support seller's claims

If your claimed revenue doesn't match your POS records and tax returns, the deal will die in due diligence. Make sure everything reconciles before you start.