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Name:
#318 & #418 Two Highly Profitable Fitness Centers
Categories:
Retail; Service
Region:
Colorado
Industries:
Retail; Service
Segments:
Service
Asking Price:
$2,795,000  
Down Payment:
$440,000  
Revenue:
$1,942,944  
Adj. Profit:
$679,858  
Adj. Profit Type:
Seller's Discretionary Earnings  

Two Highly Profitable Fitness Centers - These two well established, non-franchise fitness centers have demonstrated increased profitability year after year. Location #1 opened its doors in early 2009, became profitable very quickly, and continues to consistently generate good cash flow. Location #2 opened its doors a few years later, has been profitable the last three years, and has plenty of room for growth. Both locations have well-trained managers and staff already in place taking care of the daily operations. The management team prides itself in having a clean and friendly environment, which explains the high use and membership retention rates. The asking price reflected below is for both locations, but the sellers will entertain the sale of each location separately.  Contact Rob Amerine.  BUSINESS SUMMARY 

Notes of Explanation:
  1. TBS = "To Be Suggested"
  2. Seller's Adjusted Profit

The Seller's Adjusted Profit is a calculation showing the cash flow generated by the Business for the most recent tax year, unless otherwise indicated, by adding back to the net profit those costs that are discretionary to the Seller. These costs could include the owner's salary and benefits, interest paid on the seller's notes/debts that are not assumed by the buyer, non-cash expenses such as depreciation (in appropriate situations) and amortization, and certain non-recurring or unusual expenses. Details of the Adjusted Profit calculations are available in each presentation package and in our files.

"An Economic Basket"

Another way of viewing the Seller's Adjusted Profit is as the historic economic basket of benefits available to the new owner so he can:

  1. Pay himself an appropriate wage commensurate with the skill required to manage the business.
  2. Service any debt incurred to purchase the business.
  3. Receive a reasonable rate of return on the down payment invested. (The appropriate rate of return depends on market conditions and the size of the business. For smaller transactions the rate of return on investment is not usually a significant factor in the valuation.