Pub, bar and restaurant valuations.

What the figure usually turns on

• Fair maintainable trade, not last year's takings

  Hospitality is valued on what a reasonably efficient operator would achieve, not on a single strong or weak year. We normalise for owner's remuneration, one-off closures, refurbishment periods and any post-year-end trading shift.

• Wet, dry and accommodation split

  Gross margin differs sharply between drink, food and rooms. A site running 70% wet at a 68% margin is a different asset from a food-led site at 62% — even on identical turnover.

• Tenure and lease terms

  Freehold, free-of-tie leasehold and tied tenancy sit on completely different value bases. Rent as a percentage of turnover, remaining term, break clauses, rent review basis and tie obligations all get priced.

• Labour and food cost as a percentage of sales

  Buyers work in percentages. Payroll above roughly 33% of sales, or food cost drifting past 32%, tells them either the trade is under-priced or the operation is inefficient — both reduce the multiple.

• Condition, covers and consents

  Kitchen and cellar condition, cover count, external trading space, premises licence hours and any planning constraint all move the figure — and are the first thing a buyer's surveyor tests.

How the figure is built: a worked example

An illustrative free-of-tie leasehold pub with 12 years left on the lease, to show the arithmetic rather than any real client. Turnover of £780,000, roughly 60% wet and 40% dry, and a declared net profit of £96,000.

Illustrative figures only, not a real business and not a valuation. The biggest single move is pricing in a manager to do the owners' unpaid hours. That is the step most agent appraisals skip, and the reason a generous first figure later drifts down.

Where hospitality valuations usually go wrong

The most common error is valuing a leasehold as though it were a freehold — applying a property-style multiple to a business that has no property in it. The second is treating a good post-COVID rebound year as the maintainable level without asking whether it repeats.

We separate the trading business from any property interest, state the fair maintainable trade we've adopted, and show the workings. If the figure depends on the owner working sixty hours a week for nothing, the report says so and adjusts for it.

Independent, because we take no sale fee

Hospitality agents value sites for nothing to win the mandate. The number arrives generous and quietly drifts down over the following six months. James Nelson spent years as Head of Corporate Sales in exactly that market, which is precisely why this firm doesn't sell businesses.

One fixed fee, no commission, no success fee. The valuation is the whole product.

This is for you if…

• —You're selling a pub, bar or restaurant and want a real number before you list it.
• —You're buying and want the asking price tested independently.
• —You need a valuation for a partnership split, divorce, probate or HMRC.
• —You're refinancing and your lender wants an independent view of the trade.