How to Sell Your Del Frisco’s Grille Business: A Comprehensive Guide for Restaurant Owners

If you’re considering selling your Del Frisco’s Grille business, understanding the unique aspects of the upscale casual dining industry is crucial for a successful and profitable transaction. Del Frisco’s Grille, known for its modern American cuisine, vibrant atmosphere, and prime locations, attracts a loyal clientele and often operates in high-traffic urban or suburban areas. Whether you own a single location or multiple franchises, this detailed guide will walk you through the key factors that impact the sale of your Del Frisco’s Grille business, from valuation to transferability and beyond.

Valuing Your Del Frisco’s Grille Restaurant

The value of a Del Frisco’s Grille business is primarily determined by its adjusted owner benefit, which reflects the true economic profit available to a working owner. In the restaurant industry, businesses typically sell for 2.5-4.5x their annual adjusted owner benefit, depending on factors such as location, profitability, and operational efficiency.

• Calculate EBITDA: Start with your Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) from your most recent financial statements.
• Add Back Owner’s Compensation: Include your salary and any personal expenses that have been run through the business.
• Adjust for Non-Recurring Expenses: Remove any one-time costs or extraordinary expenses to reflect normalized earnings.

Maintaining clear, up-to-date financial records is essential. Buyers and their lenders will scrutinize your books, so transparency and accuracy can significantly impact your final sale price.

The Owner’s Role in Restaurant Operations

A critical component in the valuation of a Del Frisco’s Grille business is the owner’s involvement. Restaurants where the owner is deeply involved in daily operations—such as managing the kitchen, handling key customer relationships, or overseeing staff—may be less attractive to buyers seeking a more passive investment.

• Active Owner: If you’re the face of the restaurant, consider delegating responsibilities to managers and staff before listing your business for sale.
• Managerial or Absentee Owner: Businesses with strong management teams and systems in place command higher multiples, as they offer smoother transitions and less risk for buyers.

When valuing your business, factor in the cost to replace your role, whether through hiring a general manager or redistributing duties among existing staff.

Customer Base and Brand Loyalty

Del Frisco’s Grille locations often benefit from a strong brand and a loyal customer base. However, the transferability of this customer base is vital to achieving a premium valuation.

• Consistent Experience: Ensure that your restaurant’s appeal isn’t solely tied to your personal relationships with guests. Standardize service and menu offerings to maintain consistency.
• Staff Retention: Retain key staff members who are familiar faces to regular customers. Their continued presence can help ensure customer loyalty after the sale.
• Marketing Systems: Document your marketing strategies, loyalty programs, and community partnerships to demonstrate ongoing customer engagement.

A business with a transferable, loyal customer base and a strong reputation will always command a higher price.

Restaurant Assets: Equipment, Furnishings, and Upgrades

The physical assets of your Del Frisco’s Grille location—such as kitchen equipment, bar fixtures, dining room furnishings, and technology systems—play a significant role in the business’s value.

• Modern Equipment: Up-to-date, well-maintained equipment reduces the buyer’s need for immediate capital investment.
• Ambiance and Decor: High-quality furnishings and a contemporary atmosphere are essential for attracting and retaining the target demographic.
• Asset List: Prepare a detailed inventory of all assets included in the sale, and ensure they are conveyed debt-free at closing.

Remember, the asking price should reflect both tangible and intangible assets, such as goodwill and brand reputation, unless you are conducting an asset-only sale.

Location and Lease Considerations

Location is a cornerstone of success in the restaurant industry, and Del Frisco’s Grille locations are often situated in prime real estate. The terms of your lease can significantly impact your business’s value and marketability.

• Lease Term: Buyers prefer a long-term lease (at least 3-5 years) with renewal options to ensure stability.
• Rent-to-Sales Ratio: Ideally, rent should be less than 10% of gross sales to maintain profitability.
• Transferability: Work with your landlord to ensure the lease can be assigned or a new lease negotiated for the buyer.
• Location Demographics: Highlight proximity to business districts, affluent neighborhoods, or entertainment hubs that drive traffic to your restaurant.

A favorable lease and a strategic location can add significant value and attract more qualified buyers.

Confidentiality and the Sales Process

Selling a Del Frisco’s Grille business should be a confidential process to protect staff morale, customer relationships, and competitive positioning. Work with a professional business broker experienced in the restaurant industry to:

• Pre-qualify buyers and require non-disclosure agreements before sharing sensitive information.
• Market your business discreetly to avoid disruptions in daily operations.
• Guide you through negotiations, due diligence, and closing to ensure a smooth transition.

Maximizing the Value of Your Del Frisco’s Grille Business

To achieve a premium valuation when you sell your Del Frisco’s Grille business, focus on the following:

• Build a strong, transferable management team.
• Maintain accurate and transparent financial records.
• Invest in modern equipment and attractive decor.
• Secure a favorable, long-term lease in a prime location.
• Develop and document systems for marketing, operations, and customer service.

By addressing these key areas, you’ll position your Del Frisco’s Grille business for a successful sale and maximize your return on investment.

Conclusion

Selling your Del Frisco’s Grille business is a significant decision that requires careful planning and industry expertise. By understanding the unique factors that drive value in the upscale casual dining sector, preparing your business for sale, and working with experienced professionals, you can achieve a smooth transition and realize the full value of your hard work. If you’re ready to take the next step, consult with a restaurant business broker to begin the confidential sales process today.