Comparing offers on a grocery store

Cash at close, the note, inventory treatment, and license risk beat a vanity headline. Two polite LOIs can look like the same number and fund as two different lives. Grocery Store Business Broker — HedgeStone Business Advisors, led by Jason Taken — scores them on those four lines, plus who can finish assignment and SNAP. Sellers: book a confidential intro when you have two letters and want a net, not a toast. Buyers: mark the LOI terms that matter for buyers before you send a number you cannot defend.

BizBuySell’s grocery and supermarket sold sample — 3.38 average earnings multiple in 2025, IQR 1.60–3.15 for 2021–2025 — is a national listing-site band. It is not a reason to take the highest ask in the room. The valuation hub is the method. How a sale works is the sequence after you pick. This page is the scoreboard.

The headline is the least useful line

The first number on page one is a marketing line. It may include inventory or exclude it. It may assume a note you have not read. It may assume a lease the landlord has not assigned. Circle the going-concern number, the inventory line, and the cash at close as three separate figures. If an offer will not split them, it is not finished.

The LOI terms that matter for sellers are inventory rules, license conditions, assignment, and transition hours. An LOI that is silent on those is a letter of interest in a feeling. Earnest money without outs is a donation from the buyer and a false comfort for the seller.

Revenue multiples hide rent and labor. A buyer who offers “0.5 times sales” is using atmosphere. BizBuySell’s 0.43 average revenue multiple in 2025 is a cross-check on a listing-site sample, not a quote. Return to recast SDE. FMI’s 2.1 percent average net profit for food retailers in 2025 is why a thin file cannot absorb a sloppy structure. There is no slack for a headline that does not wire.

Family and manager offers still need this scoreboard. Soft language creates hard lawsuits. Selling to family or an employee does not waive cash-at-close math. Multi-store offers need a price per store and a shared license calendar or they unravel. Selling multiple locations is that problem.

Cash you can spend versus a note you collect

Cash at close is the number you can take to the bank after inventory, holdbacks, and the fees you actually owe. It is not the headline minus a vague “costs.” Line it. Use the cash-to-close estimator from the other side of the table so you see what the buyer thinks they are wiring.

A seller note is a loan you are making. Rate, term, amortization, security, default, and whether it sits on standby behind a senior lender are the terms. Read the standby, not the folklore. A note that cannot pay while SBA is outstanding is not “part of the price” in year one. It is a hope in year seven. Seller financing how much to carry and buying with seller financing are the two essays. Discount the note for collectability. A buyer you would not lend to in daylight is not a better offer because the headline is fatter.

Teaching example, labeled illustrative: Offer A is $1,100,000 going-concern, inventory extra at cost, $900,000 cash at close, $200,000 note at a stated rate, no standby. Offer B is $1,200,000 going-concern, inventory “included,” $700,000 cash, $500,000 note on standby behind SBA. Offer B won the first phone call. Offer A may still win the scoreboard once you price the room, the standby, and the year you actually get paid. Run both through a simple present-value sketch with your CPA. Do not invent a discount rate from a forum. Do invent a habit of putting cash and paper in two columns.

Security on the note matters. A second position on equipment in a thin grocery file is not the same as a first on the dirt. Owned real estate is a second asset. Do not let a buyer mix a cheap store note with a building you were going to sell separately. Selling with a lease versus real estate is the split.

Inventory treatment can beat the multiple

Inventory at cost is a second line. An offer that says “price includes inventory” has just hidden a six-figure swing. Write the method: last invoice, unsellable list, department split, crew, disputes, collar or true-up. How inventory is counted at closing is the method. Closing-day count procedures is the night.

A buyer who wants a low cap on the room is asking you to run down stock before close. That can be rational. It is also a week of lost sales and a thinner first load. A seller who wants to stuff the back room is asking the buyer to fund slow movers. Price both behaviors in the LOI, not as a surprise on the tape.

Working capital is the cash to buy the next load. It is not your problem as a seller unless you promised a full rack and delivered holes. It is the buyer’s stack. An offer that cannot fund the room plus the next drop will stumble in week one and blame you. How much money you need is the buyer’s essay. Your essay is: do not pick the tourist who cannot say that number out loud.

FMI’s $668,377 average weekly sales per supermarket in 2025 describes the channel, not your room. Your room is the cost file. Quote the cost file.

License risk has a dollar value

USDA FNS: SNAP authorization does not transfer. The new owner files a new application. An offer that treats SNAP as “included” is folklore. Budget downtime in cash and in the landlord story. What happens to SNAP when you sell is the rule. Write the out: what happens to earnest money and the close date if the application is not where the LOI said it would be.

Alcohol is a class, a quota, or a control-state product. NABCA lists 17 control states plus local-control pockets. A quota license that may not move is a cooler you might not get paid for. A control state relationship is not a transferable spirits privilege. Transferring a liquor license is the calendar. An offer that is silent on alcohol in a box that rings beer is incomplete.

WIC, lottery, and tobacco are the same kind of line. Lottery is often personal. WIC is a vendor file. Tobacco sits with tax and health agencies. WIC, lottery, and tobacco is the list. Print the closing and license checklist and tick each offer against it.

Assignment is a license of a different kind. A landlord who will not assign kills a pretty headline. Remaining term under 24 months without options is a price cut. Lease diligence belongs before you rank letters. An offer conditioned on assignment with a walk right is stronger than an offer that assumes the landlord is “a friend.”

Tax clearance belongs in escrow language. Bulk-sale or successor-liability practice can still exist after UCC Article 6 died. An offer that ignores tax clearance is asking you to keep successor risk. State bulk-sales notes is the caution page.

SBA time versus a cash closer

SBA 7(a) is SBA’s primary business-loan program. Published uses include change of ownership. Published maximum is $5 million. Eligibility still wants a for-profit U.S. business that is small under SBA size rules, not an ineligible type, unable to obtain the desired credit on reasonable terms elsewhere, and creditworthy with a reasonable ability to repay. Do not invent SOP line items.

An SBA offer can be the best offer. It can also be a four-month calendar with a standby note and an equity injection the buyer has not documented. Score the calendar. Score the conditions. Score whether the recast they are using matches yours. SBA 7(a) for grocery and the DSCR calculator exist so hope is not a ratio.

A cash closer who cannot staff the language or the meat case is not “faster.” They are a different kind of slow. Common reasons grocery sales fall apart includes the buyer who cannot operate. Red flags is the same list from the other side. Pick the operator who can finish surviving due diligence, not the tourist who won the first call.

Conventional or credit-union paper sits between cash and SBA. Conventional and alternative financing is that path. Same scoreboard: cash at close, inventory, licenses, calendar.

Proof of funds and a named lender beat a speech. Ask. A seller who is afraid to ask will fund a fantasy. A buyer who is offended by the ask is telling you something.

Holdbacks, earn-outs, and Monday mix

Holdbacks exist because grocery has shrink and successor tax risk. A short escrow slice against a named list — tax certificate, a messy room, a vendor credit — is adult. A holdback that is really a second negotiation is a delayed re-trade. Write the triggers and the clock.

Earn-outs are hard because the buyer controls mix after Monday. They can change vendors, drop your private label, and then miss the target they promised to pay. If you use one, write a definition of sales the scan can prove, a floor, and a dispute path. Prefer a note you understand to an earn-out you will litigate. Escrow, holdbacks, and earn-outs is the toolkit.

Transition hours are a close condition. Write them. An offer that is silent on transition is asking you to be generous after you are no longer paid. Transition and training is the week-one plan.

Non-competes have to be enforceable in the state and narrow enough to keep. A buyer who wants a statewide ban for a neighborhood box is not comparing well to a buyer who wants two miles and two years. Price the ask. Do not gift it to win a headline.

Allocation among equipment, goodwill, and inventory changes both sides’ taxes. Taxes on selling and asset sale versus stock sale belong in the same sitting as the offer scoreboard. A slightly lower headline with a cleaner allocation can be more cash after tax. Ask the CPA before you toast.

How two polite LOIs get scored

Put both letters on one sheet. Going-concern. Inventory method and estimated dollar. Cash at close. Note principal, rate, standby, security. Holdback. Earn-out. Assignment condition. SNAP and alcohol outs. Transition hours. Diligence clock. Proof of funds. Who is actually operating.

Jason Taken’s hour is that sheet. Counsel drafts the winner into an APA. A grocery-literate CPA marks allocation. A lender, if there is one, reads DSCR on the recast they believe. The landlord is not in the first ranking meeting. The floor manager is not in the first ranking meeting.

How to read a CIM is how both buyers should have marked the book. If one buyer never asked for scan and one buyer reconciled four trails, you already know who will finish diligence. Verifying sales with scan data is that work. Pick the closer.

Post-close, the first 90 days are vendor trust, shrink, and not changing the mix for sport. Read the 90-day plan. An offer from a buyer who talks about ripping out your mix on day three is an offer that may miss a holdback target and then call you. Price that personality.

Jason Taken and HedgeStone are not licensed business brokers in every state. Check the rule that applies to your deal. Selling the building always requires a real-estate licensee in that state. This page does not invent a local sold-comp.

When two letters are in English — or when you want help making them English — book a confidential intro. Bring the LOIs, last week’s sales, and the license list. That is enough to say which check you can actually spend.

How a buyer would price Comparing offers on a grocery store

Use this napkin recast on Comparing offers on a grocery store when you book the call. It is labeled illustrative. BizBuySell's 2025 grocery sold-business earnings multiple averaged 3.38, with a 2021-2025 IQR of 1.60-3.15.

Input or output	Illustrative figure
Weekly sales (illustrative)	$168,000
Annual sales	$8,736,000
Recast SDE	$358,176 (4.1% of sales)
Inventory at cost	$485,333 (~18 turns)
Occupancy check	$235,872 / year (2.7% of sales)
Low going-concern	$1,094,232 at 1.70x SDE + inventory
High going-concern	$1,559,861 at 3.00x SDE + inventory
Sketch DSCR on a note	1.49

Rent at 2.7% of sales is the occupancy check. If the real lease is higher, the SDE in this table is too generous until you recast to market rent.

Book the intro call with your side of the table ready: seller files or buyer capital. The calendar is the only next step.