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- 26 April 2023
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Hello,
Im looking to purchase a franchise re-sale Laundromat and need help with assessing the financial numbers to determine the sale price and viability of the business.
What the business does is setup and open the Laundromat and then at a certain point, sell it to a Franchisee. They have around 13 locations in Victoria, Australia and most are now franchised off with new sites coming on every few months.
INTRO and KEY POINTS - being sold on a debt free, cash free basis including all owned items of equipment, fittings and fixtures and working capital used in the business.
- They use Tesla Professional washing and dryer machines, which use up to 50% less water than household washers of a comparable size. (EG 8kg washer uses between 27 and 60 litres of water).
- Apparently can save you $17,500 in operating costs each year, compared to traditional laundromat equipment and the machines will be 95% recyclable at then end of their cycle.
------------------------------------------------------------
PROFIT & LOSS: (i have rounded up the numbers for easy math)
For the year ended 30th June 2022
Total Gross Profit: $138,500
Total Operating Expenses: $61,900
(NOTE: that the operating expenses does not include any franchise fee expenses as this location is company owned since it opened in 2019).
Net Profit: $76,600
NOTE: The P&L statement For the 3 MONTHS ended 31st December 2022 was a Gross Profit of $37,700 with Operating Expense of $13,400 and a NET Profit of $24,300 in total.
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SELLING PRICE / Acquisition of business & franchise agreement
Purchase Price & Stock: $282,000 (not yet negotiated, just the asking price)
Franchise Term Eight (8) years.
Franchise Royalty Fee $1,558.00 pcm (GST Inclusive).
Franchise Fee $25,000.00 GST Inclusive.
Training Fee $5,000.00 GST Inclusive.
----------------------------------------------------------------------
LEASE SUMMARY:
- 10 Years (currently 8 years left)
- Rent Per Annum $30,135 plus GST (Rent totaling around $3,570 per months currently)
- Annual Rent Increase 4.0 %
- Outgoings Per Annum Tenant's share of Outgoings and Promotion Levy multiplied by 1.1 (Promotion Levy 4.0%)
- Premises Size 65m2
- Security Deposit The equivalent of 4 months Base Rent
- Parking 860 parking bays withing shopping complex (located in a shopping center on the outside).
-----------------------------------------------------------------------
List of Assets
- 8 Washers (8kgx3, 14kgx3, 20kgx2)
- 8 Dryers ( 2x16.7kg tumble dryer x6 and 2x23.5kg tumble dryer x 2)
The rest is installations, fitouts, soap dispensers, tv, CCTV 24/7 , drainage, lights, signage, payment systems, apps, cabinets etc etc etc.
Im looking to purchase a franchise re-sale Laundromat and need help with assessing the financial numbers to determine the sale price and viability of the business.
What the business does is setup and open the Laundromat and then at a certain point, sell it to a Franchisee. They have around 13 locations in Victoria, Australia and most are now franchised off with new sites coming on every few months.
INTRO and KEY POINTS - being sold on a debt free, cash free basis including all owned items of equipment, fittings and fixtures and working capital used in the business.
- They use Tesla Professional washing and dryer machines, which use up to 50% less water than household washers of a comparable size. (EG 8kg washer uses between 27 and 60 litres of water).
- Apparently can save you $17,500 in operating costs each year, compared to traditional laundromat equipment and the machines will be 95% recyclable at then end of their cycle.
------------------------------------------------------------
PROFIT & LOSS: (i have rounded up the numbers for easy math)
For the year ended 30th June 2022
Total Gross Profit: $138,500
Total Operating Expenses: $61,900
(NOTE: that the operating expenses does not include any franchise fee expenses as this location is company owned since it opened in 2019).
Net Profit: $76,600
NOTE: The P&L statement For the 3 MONTHS ended 31st December 2022 was a Gross Profit of $37,700 with Operating Expense of $13,400 and a NET Profit of $24,300 in total.
------------------------------------------------------------------
SELLING PRICE / Acquisition of business & franchise agreement
Purchase Price & Stock: $282,000 (not yet negotiated, just the asking price)
Franchise Term Eight (8) years.
Franchise Royalty Fee $1,558.00 pcm (GST Inclusive).
Franchise Fee $25,000.00 GST Inclusive.
Training Fee $5,000.00 GST Inclusive.
----------------------------------------------------------------------
LEASE SUMMARY:
- 10 Years (currently 8 years left)
- Rent Per Annum $30,135 plus GST (Rent totaling around $3,570 per months currently)
- Annual Rent Increase 4.0 %
- Outgoings Per Annum Tenant's share of Outgoings and Promotion Levy multiplied by 1.1 (Promotion Levy 4.0%)
- Premises Size 65m2
- Security Deposit The equivalent of 4 months Base Rent
- Parking 860 parking bays withing shopping complex (located in a shopping center on the outside).
-----------------------------------------------------------------------
List of Assets
- 8 Washers (8kgx3, 14kgx3, 20kgx2)
- 8 Dryers ( 2x16.7kg tumble dryer x6 and 2x23.5kg tumble dryer x 2)
The rest is installations, fitouts, soap dispensers, tv, CCTV 24/7 , drainage, lights, signage, payment systems, apps, cabinets etc etc etc.
but you would be stuck with the Lease already agreed. So, need to be confident you can grow your business earn each year, more than the 4% to also compensate for increased running costs/inflationary costs.
