Update:  The price is being lowered to 510K and the updated adjusted earnings after the CPA’s adjustments is 189,891 from 679,960 in revenues.  510K in sales price for 189K in earnings is only 2.7 times multiple for a location driven business that can generate passive income for the buyer over time.  Location driven businesses typically sell for over 3 times the adjusted earnings.  The 2020 tax return is done and there have been some adjustments done by his CPA which resulted in an updated CPA approved 2020 PL(attached).  The tax return and PL reconcile now.  The CPA added depreciation, adjusted the interest expense, added their health insurance to the PL which was added to their W2 salaries for the tax return, etc.  I have also removed the add back for overpaying his brother because he would like to stay and I believe the new owner will want him to stay for at least the first 6 months.  Per the attached spreadsheet, I did add back his salary and his wife’s salary because they only work 35 hours or less a week combined( 15 hrs for him and 20 hrs for her) which is a traditional add back.   The owner wants to take a trip to Europe and move to Florida as soon as the business is sold and the transition is complete.  As of 4 14 21, he has agreed to lower the price to $510K .  He prefers to do this before mid-summer and has decided to offer a 5% discount to any buyer who doesn’t need a bank and/or can close on the business by Memorial Weekend.  This also makes sense since Memorial Weekend is the start of peak season for this business.  He will also carry up to 20% for a cash buyer who doesn’t need a bank compared to the 10% for buyers who do need a bank. 

For Sale:

Location driven National Franchise for oil changes, air filter changes, fluid exchanges, tires, brakes, windshield wipers, headlight replacements, and batteries.

Great location for a location driven business: High traffic 4 lane road that feeds into Downtown Denver

This company grew in adjusted earnings in 2020 even though traffic in Denver was down over 13% in 2020 compared to 2019.  This was mostly because of the stay at home order from mid-March to late May in Denver and less people going to their offices all year.  2020’s revenues were 679,960 with adjusted earnings of 189,891.   Location driven business typically carry a high multiple because they don’t change the day after the closing.  This is priced at only 2.7  times the adjusted earnings at 510K plus a small amount of inventory. 

This Franchise offers oil changes, air filter changes, fluid changes, tires, brakes, windshield wipers, headlight replacements, A/C service, and batteries. 70% of their business comes from the maintenance shop which has the two bays lube shop, where the following services are done: oil changes, all fluid changes, cabin filters, air filters, power steering flush, coolant flush, transmission flush, brake flush, differential fluid change, transfer case fluid change, fuel system cleaning, headlight restorations, wiper blades, and headlight replacement. The remaining 30% of business comes from the three-bay repair shop with the following services: brakes 15%, air conditioning 5%, tires 5%, and minor repairs 5%. The three bays repair shop has three above ground lifts, two of them are two-post above ground rated at 10,000 pounds each, and the third one is a four-post above ground alignment lift rated at 12,000 pounds. The shop also has one hunter balancer and one hunter tire machine. The buyer will get 64,761 dollars in current value of equipment, tools, lifts, etc.

The owner only works 15 hours a week. He typically works on Mondays and Fridays and works the “front of the shop” behind the counter meeting new customers and doesn’t do any of the manual labor. 

 This Franchise location has a 4.6 Star Rating on Google with 147 reviews, which is excellent, plus an A+ rating by the BBB. This is very important to the new buyer and takes years to establish.

The sales price has been lowered to 510K plus inventory which is estimated to be less than 10K. This business will qualify for an SBA bank loan and the SBA will pay the first 3 months of payments (2 1/2% of the purchase price) and is waiving their upfront fee also. A bank will only require 10% to 15% matching from a qualified buyer meaning a buyer may qualify to buy this business with only 100K in liquidity.