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South Metro Denver Popular Workout Classes, Owner Works Only 8hrs/Week, 45% Profit Margin, Steady Growth

Absentee OwnedFor Sale in Denver, CO

Listing ID: 32705 | Broker Listing ID: BLP125038

Financial & Assets Details

$1,030,000
$474,000
$25,000
2948+/-

About the Business

2018
8
$5,860
Yes
Yes

Business Description

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

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
Direct 303-905-7607
Fax 720-524-6482
jeff@businessbrokercolorado.com

This is prepared by Business Broker Colorado, LLC. It was not created by the seller and neither the Broker or the Seller are responsible for its accuracy. Buyers are responsible for their own due diligence. Neither the Broker or the Seller will indemnify or guarantee any forward looking statements or projections. The information contained in this e-mail message is confidential and may be protected from disclosure. Please be aware that any other use, printing, copying, disclosure or dissemination of this communication may be subject to legal restriction or sanction.

Different Brokerage relationships are available which include Seller agency, buyer agency, or transaction – brokerage.

Brokerage disclosure to Buyer or Tenant of Property. Definition of working relationships.

Seller's Agent: a seller's agent works solely on behalf of the seller to promote the interests of the seller with the utmost good faith, loyalty, and fidelity. The agent negotiates on behalf of and ask as an advocate for the seller. The seller's agent must disclose to potential buyers all adverse material facts actually known by the seller's agent about the business/property. A separate written listing agreement is required which sets forth the duties and obligations of the broker and the seller.

Buyer’s Agent: a buyer’s agent works solely on behalf of the buyer to promote the interests of the buyer with the utmost good faith, loyalty and fidelity. The agent negotiates on behalf of an accident advocate for the buyer. The buyer’s agent must disclose to all potential sellers all adverse material facts actually known by the buyer’s agent, including the buyer’s financial ability to perform the terms of the transaction. A separate written by a Buyer agreement is required which sets forth the duties and obligations of the broker and the buyer.

Transaction broker: the transaction broker assist the buyer or seller or both throughout a real estate transaction by performing terms of any written or oral agreement, fully informing the parties, presenting all offers and assisting parties with any contracts, including the closing of the transaction, without being an agent or advocate for any of the parties. A transaction-broker must use reasonable skill and care and the performance of any oral or written agreement, and must make the same disclosures as agents about all adverse material facts actually known by the transaction – broker concerning the property or a buyer's financial ability to perform the terms of a transaction and whether the buyer intends to occupy the property. No written agreement is required.

Business Broker Colorado, LLC, and Jeff C Eisnaugle will be operating solely as a “Seller Agent” in all transactions.

Growth & Expansion

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.

Seller Financing

10%

Location 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.

Support & Training

Will stay as long as needed.

Reason for Selling:

The owner is moving out of state to be with family.

Listing ID: 32705

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