Los Angeles restaurant sales are uniquely competitive — deep buyer demand, but also intense scrutiny on lease terms, ABC license transferability, food cost margins, and labor compliance. This guide walks through the LA-specific playbook for confidentially selling a restaurant in the $300K–$2M range.
Pre-listing prep (60–90 days before market)
Three years of clean P&Ls, lease assignment review with landlord, ABC license confirmation, employee status verification, equipment list and condition report, vendor contracts inventory, and trailing-twelve-month financial normalization.
Confidentiality strategy
Blind teaser only — no business name, no exact address. Buyer signs NDA before receiving the CIM (confidential information memorandum). Site visits scheduled outside operating hours or as 'consulting visits' to staff.
Pricing and multiples
LA restaurants typically trade at 2.0x–3.5x SDE for established neighborhood operations. Bars and concepts with strong ABC licenses trade higher. Lease quality is the single biggest multiplier — a long, transferable, sub-market lease can add 20–40% to enterprise value.
Buyer pool
First-time restaurateurs (often previous F&B managers leaving corporate roles), regional restaurant groups expanding LA footprint, and small partnerships. Bilingual marketing critical for many LA submarkets — Korean, Persian, Armenian, Hispanic-American operator pools.
SBA financing
Most LA restaurant deals close with SBA 7(a) financing, 80–90% LTV. Buyers need 10–20% down, 12 months personal living expenses in reserves, and prior management or hospitality experience to satisfy SBA underwriters.
Closing process
60–90 days from accepted LOI to close. Critical milestones: lease assignment approval (often the longest pole), ABC license transfer (typically 30–45 days), escrow funding, employee transition planning, seller training schedule.
Common deal-killers
Unassignable lease, undisclosed back rent or vendor liabilities, ABC license complications, employee misclassification (especially with PAGA exposure), and sloppy book quality that fails SBA underwriting.
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