Restaurants

[alex gilbert]

Is there any rule of thumb regarding restaurant FF&Es. For example, do FF&Es typically represent any particualr percentage of s/p, or is there a typical value per sqft of FF&Es?

 

[Pittsburgh Pete]

No.............................!

 

[Michael S]

Is there any rule of thumb regarding restaurant FF&Es. For example, do FF&Es typically represent any particualr percentage of s/p, or is there a typical value per sqft of FF&Es?

I've seen it given no value in a sale and I've seen it valued at a couple hundred thousand. You just have to talk to brokers who deal with those type of sales a lot or the buyers and sellers of those properties. Obviously a newer national chain type restaurant with all new kitchen equipment will probably have much more allocated to the FF&E than a mom and pop restaurant with equipment that's near the end of it's economic life.

Generally with a restaurant sale in the $1-2 million range I'll see maybe $100,000 allocated to the FF&E. Around here the liquor licenses is the big thing. There's only so many and they can trade for $300,000+.

 

[CANative]

Get hold of their personal property tax filing. Or look at how the assessor allocates the values (land, improvements, personal property, fixtures). The land and improvements are subject to prop 13 and you can't rely on them for value, but the tax statements are yearly filings provided by the property owner and subject to (accounting) depreciation.

 

[Terrel L. Shields]

Get hold of their personal property tax filing. Or look at how the assessor allocates the values

Our state stopped letting appraisers look at these...??? But in some counties you can find some PP info in the on line databases...Go figure.

 

[alex gilbert]

Thanks all.

 

[kiritf]

I've seen it given no value in a sale and I've seen it valued at a couple hundred thousand. You just have to talk to brokers who deal with those type of sales a lot or the buyers and sellers of those properties. Obviously a newer national chain type restaurant with all new kitchen equipment will probably have much more allocated to the FF&E than a mom and pop restaurant with equipment that's near the end of it's economic life.

Generally with a restaurant sale in the $1-2 million range I'll see maybe $100,000 allocated to the FF&E. Around here the liquor licenses is the big thing. There's only so many and they can trade for $300,000+.

Holy crap, same here with the liquor licenses in one of territories. It's worth exponentially more than an old frier, prep counters, dishwasher, and stove. I've seen some major blunders on reports by not factoring the liquor license in the sales and subject.

Alex, glad you got your answer. I definitely talk to the owner, an agent, buyer, anybody that has some insight. I'm extremely clear on what that FF&E is also. I have one bank that wants no FF&E in a value unless it is part of the structure.