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Post by JBC on Nov 17, 2016 21:13:01 GMT
Has anyone on here sold one of their clubs? I have a profitable location I am looking to sell as I will be moving out of the area. How did you set a valuation on the club and how did you go about finding a buyer? Thanks in advance.
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Post by withheld on Nov 19, 2016 18:04:46 GMT
JBC, I'd suggest you find a business broker to market your club, get NDAs in place and qualify prospective buyers. It creates a buffer so that you only negotiate with qualified/serious buyers. Brokers usually ask 10% for their fee but may be negotiable.
Valuation should be a multiple of Sellers discretionary income (Net Income + owner expenses) x multiple (3x typical in fitness business).
Hope that helps.
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Post by supercool on Nov 20, 2016 13:40:30 GMT
Don't forget that Snap will require the buyer to pay a franchise fee, which may or may not cut into your sale price (probably will, from what I've seen).
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Post by determined1 on Nov 20, 2016 21:22:46 GMT
Additionally, if you're coming up on the end of your franchise agreement it would be more beneficial for the buyer to make it a non-snap club. Saves them fees and opens you up to a wider audience.
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Post by snaplongtimer on Nov 21, 2016 16:39:38 GMT
Snap requires at least 6 months notification for renewing the lease for another 10 years (jail-time)..or not renewing. I would think an ideal situation would be put the club up for sale well before that and give the option to the new buyer of going with the franchise (god forbid) or making it an independent club. As long as Corp is not interested in buying it for which they have first rights to negotiate with you btw. They wouldn't want a money maker to get away from them. Oh..besides the license fee you will have to add that modernization fee which is a requirement for a new buyer. I believe they must do that within 6 months of owning it. That will kill the deal. You are looking at another $53K+ on top of your asking price a prospective buyer will have to shell out for license and modernization fees. If it wasn't for the excessive fees by the Franchisor and you showed consistent earnings over the past few years then I would quadruple (Net Income + owner expenses) as a selling price at a minimum.
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