c store and restaurant value - Posted by john in wv

Posted by ray@lcorn on September 10, 2003 at 12:17:47:

Hi Eric,

I’ve dealt with a couple of them. One I had to remove, the other only had to be pumped and tested for leaks.

The one I had to remove took about four hours with a backhoe to uncover and load the tank on a truck. (They are generally concrete and look like a septic tank). Soil testing showed no contaminants, so we didn’t have to dig any further. Labor, equipment, testing and disposal all cost about $2,000.

Had there been any hazardous material (and there is a long list of substances that you’d never imagine would be considered hazardous… even bleach) we would have had to go through the same process used for closing gas tanks… remove the contaminated soil, dispose of in an approved landfill, and possibly have to drill monitoring wells after closing the hole. Costs can range from a minimum of $5,000, to “a lot of money”.

We currently have two properties with grease traps, and we keep a close eye on the tenants’ habits as far as what goes into the tank for just this reason.


c store and restaurant value - Posted by john in wv

Posted by john in wv on September 08, 2003 at 15:53:42:

i need some help. does anybody have advice or a rule of thumb on how to value a combination c store and restaurant. is there a way to come up with a value based on gross sales. please help.

restaurant value only… - Posted by JT-IN

Posted by JT-IN on September 16, 2003 at 07:33:42:


Having bought and sold a hand full of restaurants, a formula that I always used was 1.5 times NET Income, (not gross), plus the value of the hard assets, Furniture, fixtures and Equipment; (FF&E)… plus Real Property value. This always seemed to work for me. You will find folks in the business asking prices much like 1 time gross, or an even higher ratio to gross sales, but these never made any sense to me.

Gross sales has very little correlation to value, has always been my contention. Oh sure, if there is poor management and a low bottom line, and installing adequate proceedures would drop scads of cash to the bottom line, then this must be taken into account.

No idea on valueing a C-Store… It was a business that I looked into several times, but somehow managed to escape that one… LOL


Re: c store and restaurant value - Posted by ray@lcorn

Posted by ray@lcorn on September 10, 2003 at 07:46:03:


Any value derived from no more than a “times gross” factor is no more than a rough rule of thumb. I would not make a final purchase decision based on such a number.

The businesses and the real estate should be valued separately, then totalled for a final value estimate. I would suggest talking with a local commercial appraiser to help you with the valuation. You don’t realize it, but you’re into a fairly complex valuation. Two businesses, real estate, and related equipment and buildings are enough to require professional help.


p.s. If the C-Store has gas pumps and the restaurant has a grease trap, then you also need a Phase 1 environmental report at the very least. Contamination have a huge effect on value.

Re: c store and restaurant value - Posted by Eric C

Posted by Eric C on September 10, 2003 at 09:55:39:

Hi Ray -

I would assume that the cost to remediate an old grease trap approximate those to remove old fuel tanks, yes?

See you,

Eric C