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Hospitality Design And Procurement W/Burgeoning Client Base For Sale

Huntington Beach, California - South, US
Asking Price:
$3,000,000
Sales Revenue:
$5,560,053
Cash Flow:
$995,655

This well-established commercial hospitality design and front of house procurement company is one of California’s incumbent market leaders. The design firm, which specializes in interior design, food facilities design, branding and front-of-house procurement, has worked with many of the biggest food service names in California, Nevada and beyond. Incumbent officers will remain with the firm if desired.

The financials do not include the officer's replacment salaries, which amount to an estimated $380k.

This sale is not a traditional SBA sale for several reason. It may qualify for an established operator that is already in the industry, or a buyer with appropriate industry experience that will inject 30% - 40% down in order to satisfy an SBA lender’s debt service coverage ratio requirements.

Property Information

Real Estate:

Lease

Lease Terms:

Seller owned prpperty may be leased on a long or short-term lease as desired.

Leasehold Rent:

$199,500 per annum

Location:

Office-Warehouse in prime location with excellent freeway access.

Premises Details:

The seller-owned 8k square foot office / warehouse leases for $18,150 per month. A new short or long-term lease may be entered into or although not preferred, the property may be acquired together with the business at an established fair market value price. All of the company’s furniture, fixture, equipment and enormous historic goodwill related to the design and procurement operations will transfer in the sale.

Business Operation

Expansion Potential:

Fortunately for a buyer, the firm has no shortage of client demand and is positioned to expand beyond its existing geographic footprint and service offering. Since this company is often contacted before an architect is selected, it is estimated that an architectural firm that hopes to establish or grow their hospitality practice could benefit the most in an acquisition, as they would not only enjoy the first look at projects that they may not otherwise have access to, but they would stand to walk into a revenue stream that has historically been up to twice the interior design fees. Stated another way, if this opportunity generates $3.5M in design fees, a buyer that’s an architect may have access to up to $7.0M in potential new billings.

The hospitality procurement business does not engage in any form of marketing or outreach to attract stand-alone clients. Rather, they solely cater to design client work. An opportunity exists for management to dramatically expand the front of front of house purchasing and supply company.

Competition / Market:

While competition exists, this 50+ year-old firm is an industry incumbent and boasts a blue-chip name in the hospitality industry. Their staff’s skill set and the company’s reputation place them in a select category, providing the firm a unique competitive advantage that industry entrants cannot replicate, which includes ‘last look’ opportunities that others don’t enjoy access to. Hospitality client’s typical 5-6 year facility ‘refresh’ and 10-12 year location remodel cycles provide the firm a somewhat predictable recurring revenue base. It is estimated that 60% of revenues are from new tenant improvements with 40% derived from remodels.

Reasons for selling:

Personal

Employees:
28
Years established:
1975

Other Information

Support & training:

Sellers will train as negotiated, and may remain employed if desired.

Financing available:

Seller may consider a small, secured carry to faciliate SBA financing.