The franchise territory includes the following cities: Castle Rock, Castle Pines, Parker, Lone Tree, Highlands Ranch, Centennial, Littleton, Columbine, Ken Caryl, Lakewood, Parts of Denver, Greenwood Village, Englewood, Cherry Creek, Cherry Hills Village & Morrison. The territory is approximately 10 times the population offered in a new Budget Blinds Franchise and there are NO ONGOING FRANCHISE FEES.  This is one of the reasons this business has a 30% profit margin which is very high compared to similar businesses.  For the past 2 years this franchise has been the #1 performing franchise for this franchisor out of 100 other franchise locations.

The trailing 12 months revenues through March 31, 2021 were 1.6M with an adjusted earnings of $548K.  The revenues are growing at 25% with the earnings growing at over 50% year over year INCLUDING 2020 during COVID.  The sales price is 1.59M which makes the sales price less than 3 times the adjusted earnings which is low for a turnkey franchise that is established in a very fast growing market and has a 30% profit margin. The business also has 35% recurring revenues from repeat and referral business.

The owner wishes to travel and explore more with his family and feels it would be a great time to do this.  He will sign a non-compete, help with a full transition and be available for consulting afterward.  The franchisor will train the new owner for a week and vendors will be available both in person and by video tutorials to help also.  The new owner doesn’t need any construction experience but should be able to “present” their products to potential customers. The training does cover all aspects of the business to including sales and installation techniques. The franchise has a fantastic full-time installer who will stay after the closing.  Plus, there are no required licenses or certifications for the State of Colorado other than a sales tax license which is already in place.

The buyer will get approximately 90K in current value hard assets made up of 2 trailers, equipment, tools, sample books, hand samples, and two wrapped vans with shelving and a wrapped box truck.  He keeps all of this at his house which we have already assumed will not be feasible for the new owner so I have taken a 1K/month negative add back to find proper storage for this.  The box truck already is kept at a storage facility over night near where the installer lives and that expense is already on the PL’s.  He also has 15K in assets in a new showroom that he started building out on South Broadway where he pictures the admin/sales person who can answer the phone, schedule, and give presentations to prospective customers referred from the home remodeling company that takes up the rest of that large space.  They are renting 600 square feet of a 5,000 square foot building with parking and a recent total remodel made up of several other showrooms.

The owner working 50 to 60 hours a week doing mostly sales, his wife is working 25-30 hours a week doing scheduling, bills, and some bookkeeping, and a 40-45 hour a week installer who loves his job and will stay long term.  I have taken a negative add back in the adjusted earnings spreadsheet to add an employee to help with the current excess hours that he is currently putting in who can also act as an admin.

The business is growing very quickly already and there are ways to increase this.   Being able to attend the Spring Home Show again post covid (he would get 5 plus weeks of work from the previous home shows in the convention center), hiring an employee who can do both sales and administrative work.  Finishing the buildout to the Denver showroom and placing the new employee there, doing more commercial jobs, adding advertising including Val Pak (which is very effective for this type of business).  Also, if you choose to get into repair work there is a huge demand in the area as there are very few companies that offer this service.  His advertising is only 2% of revenue when the average in this industry is closer to 6%.  He is not a marketing person.  The new owner can improve their social media presence, online reviews, etc.  To put this in perspective, he is 5 star Google rated with 2 reviews in 1 “location” and 28 reviews in the other and does up to 25 jobs a week at their peak and has for years.  He doesn’t pay attention to this.  There is no other franchise’s for the same franchisor to the South of them and the new owner could purchase from Larkspur to Colorado Springs which is also growing very fast.  He states that he believes the business can grow to 3M in revenues in 2 years and 5M in 5 years. 

The seller is asking for 1.59M.  He will be keeping his cash and accounts receivables and will pay off all debt including the accounts payables so that the business transfers debt free.  It is an LLC so this can be either a stock or an asset sale