After 25+ years in F&B leadership, from hotel outlets and stadium premium suites to consulting on a dozen restaurant startups and conversions, I’ve found that the add-back schedule is where a restaurant deal is won or lost. Sellers usually aren’t being dishonest. Restaurants just run on a lot of informal habits. Here’s what I’d push on before trusting adjusted SDE/EBITDA: Owner’s labor. If the owner works the floor, expedites or closes five nights a week, adding back their full salary overstates earnings. Someone has to do that job after close, so replace it with a market-rate GM or chef, bonus included. “One-time” repairs. In a kitchen, walk-in compressors, hood cleaning, dish machines and POS fixes recur. Ask for three years of R&M detail. If a “one-time” item shows up every year, it’s an operating cost. Comps and “personal” meals. Owners often add back comps as marketing or personal spend. Some are, but much of it is how the place keeps regulars and staff happy. Check POS comp and void reports against the add-back. Cash, tips and service charges. Any add-back that relies on unreported cash is a non-starter for lenders and for you. Also confirm how service charges and tips are handled for payroll tax, because mistakes there can follow you after close. Beverage “upside.” Claims that pour cost “will drop to X%” need proof: inventory counts, purchase invoices and POS mix. Bar shrink rarely shows up clearly in the P&L, and a pre-close loss-prevention audit is cheap insurance. Related-party rent. Normalizing rent to “market” only works if you can actually sign that lease. Read the renewal terms and CAM reconciliations. One big year. A single large catering contract or event season can inflate trailing numbers. Ask for monthly P&Ls and revenue by channel (dine-in, bar, catering, events). A quick sanity check: rebuild prime cost (COGS plus total labor including taxes and benefits) from source documents. If it doesn’t land in a reasonable range for the concept (many full-service restaurants aim for roughly 60–65% of sales), dig deeper before you trust any add-back. What add-back have you seen that looked fine on paper but fell apart in diligence? If you’re looking at a restaurant, bar, catering or hotel F&B deal and want a second set of operator eyes on the P&L, I’m happy to take a quick look.