I asked Perplexity about EBITDA multiple and fast food franchises
- Small to mid-sized franchise restaurants often trade at 1.5x to 3x EBITDA, reflecting higher risk and owner-dependence.?
- Established or multi-unit fast food chains (QSRs) commonly achieve 3.3x to 4.3x EBITDA on average.?
- Larger franchise operators with $1–3 million or more in EBITDA can reach 3x–5x, especially for strong brands like Taco Bell or Chick-fil-A.
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You're using a 10x EBITDA multiple? That's like a premium reliable pipeline multiple. Seems way too high to me.
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If you need a ratio for WEN then current P/S is on low end at 0.9 compared to historical of over 2x.
2x sales is really high for a restaurant stock. Cheesecake factory is about 0.8x.
BLMN's price to sales is about 0.2x, and they pay an 8% dividend. That's what I meant when they're multiple is hard to beat.
Of course all the restaurants and food outlets have their own specific story, but from what you've posted WEN doesn't seem to have a low valuation.
BLMN is in the process of trying to improve operations, I don't know the deep dive details, I just know it's super cheap on price to sales, and pays a nice dividend. Whether the stock does well going forward depends mostly on whether the turnaround effort succeeds, or not. On this question I have no idea - I don't like Outback Steakhouse! They have (I think) 5 chains, but Outback is their largest.
It's a cheap equity value high dividend paying stock, that's about all I know. My cheapo investor friends like it. I was waiting to buy some at $6.00 (10% dividend yield!), but it didn't get that low. Maybe next quarter! |
