Business Value

The amount of the purchase price is oftentimes reason for disagreements between the previous owner and the business successor. Therefore, the evaluation of the business is very important and must be performed thoroughly and documented/traceable in order to satisfy all parties. Different evaluation methods can lead to different and sometimes inaccurate value assessments. In addition to utilization of professional evaluation methods, it is also crucial that the correct evaluation procedure is used for the specific scenario at hand. Another important factor in the hotel and restaurant industry is that the value of a business is often related to a specific pre-negotiated time frame (lease agreement/operating lease agreement), after which crucial circumstances like rent, exclusivity and/or use of space may change significantly.