Buying existing coffee bars -- looking for advice

I write a magazine column for people who want to buy businesses. I'm trying to determine the average valuation for a profitable chain of specialty coffee stores (i.e. multiple of earnings, multiple of sales, etc.) Does anyone have a good rule of thumb -- i.e. 5X earnings, 50% of revenue, etc.?

Also, from those who are running shops, is now a good or bad time to get into the business (by purchasing existing stores)? Why/why not?

Thank you.

Elaine Grant

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Permalink Reply by Phillip Howerzyl on August 11, 2012 at 11:30pm

I am wondering the same.

Permalink Reply by Brady on August 12, 2012 at 4:21am

Hi Phillip.

May of 2008 is a bad time to buy a coffee shop.

Hope that helps!



Phillip Howerzyl said:

I am wondering the same.

Permalink Reply by Brady on August 12, 2012 at 4:31am

I'll ask the same clarifying questions that I was starting to ask her before I realized how long ago this was written.

Are you asking about valuation for:

A profitable national/regional chain of specialty coffee stores with many locations?

A profitable local chain of specialty coffee stores with several locations and a roasting operation?

A local group of a half dozen license stores for a large national chain (which is what OP was asking about for her article)?

A small handful of profitable cafes? With or without a roasting operation?

A single cafe?

I suspect that the valuation model is quite different in each case.

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