How are you,
I am looking to buy existing subway that has been in business for more then 3 years.
This is 100% absent owner, that has employees and manager in place.
I have converted all of the numbers in to %, so that i can share them with you.
I decided the income or expense by the net revenue to get that percentage.
If i made a mistake or it doesn't make sense, let me know.
I am trying to figure out how much to offer for this business. Lets assume that net sales are 100k, for easy counting. Lets say, i will not touch net income and leave it in the business, and only keep officer compensation, its only 6%, and if taking 100k as a base, that's only 6k to me.
The current asking price is 3 times the income. However, that income includes ( loan amount that owners is paying, total net income, and office compensation ) I think its too much, but trying to figure out how to evaluate it correctly and make the right offer. does anyone has any experiance in Subway franchises or advice on how to price the business and my offer????
Loans - amount that current owner is paying, if i buy this, i will probably be paying the same in loans.
Officer compensation - amount that current owner is taking from the business.
[TABLE="width: 303"]
[TR]
[TD]Net Revenue (Sales)[/TD]
[TD="align: right"]100%[/TD]
[/TR]
[TR]
[TD][/TD]
[TD][/TD]
[/TR]
[TR]
[TD="colspan: 3"]Cost of Goods (Purchases & Supplies)
[/TD]
[TD="align: right"]29%[/TD]
[/TR]
[TR]
[TD][/TD]
[TD][/TD]
[/TR]
[TR]
[TD]Gross Profit[/TD]
[TD="align: right"]71%[/TD]
[/TR]
[TR]
[TD][/TD]
[TD][/TD]
[/TR]
[TR]
[TD]Operating Expenses[/TD]
[TD][/TD]
[/TR]
[TR]
[TD]Loans[/TD]
[TD="align: right"]5%[/TD]
[/TR]
[TR]
[TD]Officer Compensation[/TD]
[TD="align: right"]6%[/TD]
[/TR]
[TR]
[TD]Total Operating Expenses[/TD]
[TD="align: right"]68%[/TD]
[/TR]
[TR]
[TD][/TD]
[TD][/TD]
[/TR]
[TR]
[TD]Net Income/Loss[/TD]
[TD="align: right"]3%[/TD]
[/TR]
[TR]
[TD][/TD]
[TD][/TD]
[/TR]
[TR]
[TD]Rebate Income (estimated)[/TD]
[TD][/TD]
[/TR]
[TR]
[TD]Total Net Income/Loss[/TD]
[TD="align: right"]4%[/TD]
[/TR]
[/TABLE]
I am looking to buy existing subway that has been in business for more then 3 years.
This is 100% absent owner, that has employees and manager in place.
I have converted all of the numbers in to %, so that i can share them with you.
I decided the income or expense by the net revenue to get that percentage.
If i made a mistake or it doesn't make sense, let me know.
I am trying to figure out how much to offer for this business. Lets assume that net sales are 100k, for easy counting. Lets say, i will not touch net income and leave it in the business, and only keep officer compensation, its only 6%, and if taking 100k as a base, that's only 6k to me.
The current asking price is 3 times the income. However, that income includes ( loan amount that owners is paying, total net income, and office compensation ) I think its too much, but trying to figure out how to evaluate it correctly and make the right offer. does anyone has any experiance in Subway franchises or advice on how to price the business and my offer????
Loans - amount that current owner is paying, if i buy this, i will probably be paying the same in loans.
Officer compensation - amount that current owner is taking from the business.
[TABLE="width: 303"]
[TR]
[TD]Net Revenue (Sales)[/TD]
[TD="align: right"]100%[/TD]
[/TR]
[TR]
[TD][/TD]
[TD][/TD]
[/TR]
[TR]
[TD="colspan: 3"]Cost of Goods (Purchases & Supplies)
[/TD]
[TD="align: right"]29%[/TD]
[/TR]
[TR]
[TD][/TD]
[TD][/TD]
[/TR]
[TR]
[TD]Gross Profit[/TD]
[TD="align: right"]71%[/TD]
[/TR]
[TR]
[TD][/TD]
[TD][/TD]
[/TR]
[TR]
[TD]Operating Expenses[/TD]
[TD][/TD]
[/TR]
[TR]
[TD]Loans[/TD]
[TD="align: right"]5%[/TD]
[/TR]
[TR]
[TD]Officer Compensation[/TD]
[TD="align: right"]6%[/TD]
[/TR]
[TR]
[TD]Total Operating Expenses[/TD]
[TD="align: right"]68%[/TD]
[/TR]
[TR]
[TD][/TD]
[TD][/TD]
[/TR]
[TR]
[TD]Net Income/Loss[/TD]
[TD="align: right"]3%[/TD]
[/TR]
[TR]
[TD][/TD]
[TD][/TD]
[/TR]
[TR]
[TD]Rebate Income (estimated)[/TD]
[TD][/TD]
[/TR]
[TR]
[TD]Total Net Income/Loss[/TD]
[TD="align: right"]4%[/TD]
[/TR]
[/TABLE]
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