Bar & Pub Business Valuation Benchmarks

Bar owners, prospective buyers, and industry investors rely on a diverse set of financial benchmarks to assess the value of a business. We have compiled data from current BizBuySell listings and sold businesses to provide insight into the business for sale market and important benchmarks for pricing and evaluating bar, pub, and tavern businesses relative to industry standards.

See also: Restaurants, Brewery Businesses, and Nightclubs

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Highlights of Bars, Pubs, & Taverns Sold on BizBuySell

Bar businesses listed and sold on BizBuySell are comprised primarily of locally owned small businesses engaging in the sale of alcoholic drinks for entertainment and leisure. Many of these businesses include complementary components such as food service and music or other entertainment.

Bar & Pub Business Transaction Trends

The median sale price of bar, pub, and tavern businesses has increased in every year until 2024 – adding 36% to the median sale price during that time. Recent slow-down in price growth is attributable to increasing interest rates making business acquisition loans more costly.

Bar & Pub Business Valuation Multiples

Valuation, or pricing, multiples are financial tools that allow for comparisons between businesses that have different levels of revenue and earnings. They represent the sales price of a business relative to its financial performance, and given enough individual business sales data, they represent what the market is willing to pay for a business given its revenue and earnings.

Valuation Trends

Business values and associated multiples fluctuate over time, influenced by a variety of macroeconomic factors such as interest rates, inflation, consumer spending, and overall economic growth. For bars and pubs reported sold on BizBuySell, the average earnings multiple has increased steadily from 2.5 closer to 2.9 over the past five years.

Earnings Multiples

Earnings multiples represent the value of a business relative to its owner’s discretionary earnings or "cash flow". Arguably the most important valuation metric - as the seller's discretionary earnings will often dictate how much a buyer is able to borrow to finance the business acquisition - most valuations will hinge on a reasonable earnings multiple.

Revenue Multiples

Revenue multiples represent the value of a business relative to its overall sales or revenue. In conjunction with an earnings analysis, revenue multiples are commonly used to value a business based on its overall sales.

How to Interpret These Multiples

Recent Listings vs. Sold Businesses

We calculate and provide valuation multiples from two sources: Current and recent listings of bars, pubs, and taverns for sale, and our database of "comparable" businesses sold on BizBuySell. Multiples based on listing data are always higher due to owners setting asking prices above what their businesses might typically sell for. This occurs either intentionally as a negotiation strategy, or incidentally due to business owners’ common tendency to overvalue their own businesses.

Multiples based on comparable businesses - "comps" in business broker parlance - are much more useful as they represent the prices at which businesses ultimately get sold. Business brokers and valuation professionals will always turn to local comps when pricing businesses for sale or evaluating businesses for acquisition. We provide both sets of data at the national level to offer general context.

Quartiles, Median, and Average

No two businesses are identical, and as such, valuation multiples exist in a range. We have carved out four common values within this range: Lower quartile represents the value under which the lowest 25% of valuation multiples fell. Upper quartile represents the value above which the highest 25% of multiples fell. Median is the middle of the range, and average is the mean of the set. Mean is almost always higher than the median, driven by a minority of high volume, high value businesses sold at multiples above the upper quartile.

Businesses with consistent financial performance, above average revenue and earnings, demonstrable growth potential, low owner involvement, unique competitive advantages, and a seller willing to finance will command a multiple at or above the upper quartile. Lower volume businesses with thin profit margins, full-time owner involvement, and many direct competitors will trade at or below the lower quartile. Most businesses will fall somewhere in the middle.

Based on this data, half of bars, pubs, and taverns are worth between 1.6 and 3.2 times their annual seller discretionary earnings, with 25% of exceptional, large businesses trading above this range, and 25% of the smaller, less desirable bars trading below.

Financial Benchmarks

To determine how a business compares in terms of revenue and earnings relative to industry peers, it’s necessary to have some insight into industry standards. "Benchmarking" describes the practice of comparing a business’s financial performance to typical industry standards to determine where a business falls relative to other businesses in the same industry. These benchmarks can help guide owners and investors towards appropriate valuation multiples from the range above.

To that end, we have aggregated bar and pub industry financial ranges useful for comparing an individual business to the broader industry.

Bar & Pub Revenue and Earnings Trends

The median discretionary earnings and revenue for bar and pub businesses has increased consistently over the last five years. Between 2019 and 2023, median earnings for bars sold on BizBuySell rose 46% while median revenue increased 54%. In 2024, both figures came back down, but remained well above pre-pandemic levels.

Earnings Ranges

Discretionary earnings (used interchangeably with the terms "cash flow" and seller's discretionary earnings or SDE) is often the crux of business valuations, so it is important to benchmark it relative to other bar businesses traded on the market. Below you will find discretionary earnings ranges for bar businesses sold over the past five years, as well as recent bar, pub, and tavern for sale listings.

Revenue Ranges

Sales volume plays a large role in business valuation, as it measures the size of the potential income opportunity for new ownership. It's not uncommon for buyers to select an earnings multiple range based on overall revenue. The table below includes revenue ranges of bars, pubs, and taverns sold over the past five years and recent bar businesses listed for sale.

How Revenue and Earnings Level Affects Business Values

Clearly higher levels of earnings lead to higher valuations, even given the same multiple. However, valuation multiples also tend to rise with business sales volume. Popular bars that generate higher sales (and maintain reasonable profit margins) tend to sell for earnings multiples on the higher end. So, a bar with annual sales over $1.2 million may sell for an earnings multiple over 3, where a lower traffic bar with sales below $400k may trade under 1.6 times earnings.

This tendency for higher sales volumes to fetch higher valuation multiples is largely driven by the economics of business acquisition financing. Higher volume businesses give buyers more cushion to cover debt service obligations and still have enough left over to pay the new owner a reasonable income.

Sector Comparisons

For a more complete understanding of the market and valuation standards, consider comparisons within the broader food service sector when benchmarking bar businesses. The chart and table below includes key metrics from sales of food service businesses on BizBuySell between 2020 and 2024.

Compared to other businesses in the food service sector, bars tend to fetch a slight premium in terms of valuation relative to typical sales and owner earnings. The operational model is simpler than a full-service restaurant with better profit margins. Bars & pubs also have a fun factor that is appealing to many business buyers, but complexities and potential issues with liquor licensing must be considered.

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