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Absentee Owner High Profit Margin Workout Class Studio For Sale

Denver, Colorado, US
Asking Price:
$1,225,000 Furniture / Fixtures included
Sales Revenue:
$1,030,000
Cash Flow:
$474,000

Very Popular Empowering Workout Classes with Monthly Recurring Revenues with Steady Long-Term Growth and Great Reviews located in South Denver Metro.

The trailing 12 months revenues to April 30th were 1.03M with earnings of 474K. The 2021 revenues were 905K with earnings of 451K. This revenue was generated from one location where the owner can expand into other locations nearby based on its popularity. The current profit margin and ability to grow this is almost mind-boggling to me. I work with blue-collar businesses every day and those owners all work harder with much lower profit margins than this business. Plus, all of them need to find highly skilled labor with experience and/or a license compared to this business which has less expensive employees who are easier to train and love their jobs. This business compares favorably in almost every way to a traditional business model. The owner works 8 hours a week and made 474K over the last year which is because of this business’s 45% profit margin and very small ongoing capitalization requirements. I can’t remember seeing many businesses with a 45% profit margin and the owner only works 8 hours a week. By comparison, an average profit margin of 11% would require revenues of 4.4M to generate their 474K profit which would require a much larger location, number of employees, insurance cost, etc.

This business is always growing and just had higher revenues and earnings in the 1st 4 months of 2022 than in any previous year. Covid had a negative impact in both 2020 and 2021 because of the hard shut down of gyms in 2020 and the increased 6 foot spacing of their members which lasted until mid-May of 2022.

They are selling because they have grandchildren who they want to spend more time with and are moving out of state to be closer to family.

You get a completely built-out location that costs over 300K with a great lease, a fully staffed business with loyal and happy “team members” and instructors who can run the location by themselves, and you will get approximately 25K in other Assets all Debt Free!

They are open from 5AM to 8PM 5 days a week, Saturday 6AM to Noon, and closed on Sunday.
Their members have auto withdrawals from their bank accounts each month which creates a very high percentage of recurring revenues from “regulars” which means that this business will not change the day after the closing.

This is a very fun, high-energy, positive place to work. The owner can show up when they want and meet and talk to people anytime they want. They have 4 full-time paid team members along with several instructors. All are long-term, loyal employees. The business also has a great reputation as proven with a 4.9 Star Google rating from 90 reviews. This is very valuable to the new owner. The Sellers will agree to traditional reps and indemnifications in the closing paperwork. This is also a very easy business to transition and teach to a new owner. Based on the high amount of recurring revenues, this business will not change the day after the closing with a new owner which is also very valuable to a Buyer.

Future Growth Potential: The owner recently moved all of the members back to their original spacing after the COVID 6 feet apart protocol eased. This instantly created more room in each class. The new owner can add a noon class on weekdays, additional classes on Saturdays, and open for classes on Sunday. The new owner can also increase their advertising spending to generate more leads and/or run strategic referral challenges. Based on their fast growth and profitability, the new owner will likely add other locations.

The rent is 5,860.50 per month triple net. The space is 2,948 square feet with plenty of parking spaces. It is a great location in South Denver Metro. The lease has 4 years left on it. They are happy with both the lease and the landlord and believe the new owner can negotiate a longer lease if they prefer one.

The sales price is only 1.225M which is only 2.6 times the earnings. This is an asset sale which means that they will be keeping their cash and paying off all debts at or before the closing.

Thank you for your consideration,

Jeff C Eisnaugle
Business Broker Colorado, LLC

Property Information

Real Estate:

Lease

Leasehold Rent:

$70,326 per annum

Location:

Great location with plenty of parking.

Premises Details:

The rent is 5,860.50 per month triple net. The space is 2,948 square feet with plenty of parking spaces. It is a great location in South Denver Metro. The lease has 4 years left on it. They are happy with both the lease and the landlord and believe the new owner can negotiate a longer lease if they prefer one.

Business Operation

Expansion Potential:

The owner recently moved all of the members back to their original spacing after the COVID 6 feet apart protocol eased. This instantly created more room in each class. The new owner can add a noon class on weekdays, additional classes on Saturdays, and open for classes on Sunday. The new owner can also increase their advertising spending to generate more leads and/or run strategic referral challenges. Based on their fast growth and profitability, the new owner will likely add other locations.

Reasons for selling:

Moving out of state to be with family

Employees:
8
Years established:
2018

Franchise Information

Franchise opportunity:

Franchise Resale

Other Information

Support & training:

Will stay as long as needed.

Owner financing:
Owner financing is available. Please contact the seller for more information.
Financing available:

10%

Furniture / Fixtures value:
$25,000 - included in the asking price

Contact Business Broker Colorado, LLC

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