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Pure Barre Franchise. Pre-Approved for SBA lending.

Well known Barre Franchise with strong reoccurring memberships

Specifications

 Price:
$275,000

___
Revenue:
$290,534 (4 Year Avg.)

*Best Year 2019 – $403,214
Cash Flow:
$91,664 (4 Year Avg.)

*Best Year 2021 – $124,973
Location:
South Bay/Peninsula
Service Area:
South Bay/Peninsula
Gross Profit: 81%
Net Income: 33.5%
 Employees:
9 Instructors, 2 Sales Reps
Reason for Sale:
Seller focusing on education
Goodwill:
10 Yr Reputation
Year Established:  Current seller since 2015, originally opened 2012 Franchise founded 2001
Services:  In person or Livestream barre classes with 4 focused modalities to choose from. 150 members on auto pay
Fixtures &
Equipment: 
Greeting desk, computer, sound and PA system, free weights, resistance bands, guest lockers, fully built out space, corporate refresh was done in 2019
Product breakdown:  89% classes, 5% other income 6% Retail
Clients:  professionals from Tech and University in 30 to 45 age group
Lease: NNN $4172 per month for 1350 sf, Landlord flexible to negotiate new lease
Franchisor: PB Franchising LLC, $15,000 transfer fee receives 10 years, current FA ends 12/2028
Buyer
Requirements:
$500,000 Net Worth and $100,000 Liquid Capitol (3-months seasoned) FDD and brand application must be completed first prior to purchase agreement
Training: 3 days of mandatory training currently done remotely
Required
Fees: 
$150/ month technology fee, Business Management fee $199/month, Music Licensing fee
$129/month, Royalty 7% of Gross Sales, Brand Development fee 2% of Gross Sales
Ideal Candidate: You do not have to be an existing trainer to become a franchise owner, but it helps.
The presented opportunity is for the acquisition a franchised barre fitness facility in the South Bay area of San Francisco’s Silicon Valley.

Although the fitness industry was hit very hard during the pandemic lockdown in 2020, this COVID-resilient business immediately recovered in 2021 from the dip it had experienced. The current owner transitioned to teaching classes online and evolved the business to now accommodate clients both at the facility and at home. Business has returned to on-site classes and continues to provide options to accommodate a broader range of client schedules, living situations and economic or natural disaster requirements through their online option.

The franchisor offers support & Training.

Cost/benefits of acquiring established franchise

Cost/benefits of starting a new franchise territory

  • Initial Cost: $275,000
  • Cost for Equipment: Included
  • Cost of Inventory: Included
  • Staff: In Place & Trained
  • Clientele: Established and loyal
  • Marketing Costs: 2% ongoing Website & referrals.
  • Goodwill:  10 yrs brand recognition & reputation
  • Initial Franchise Fee: $60,000
  • Cost for Equipment: $214,287 to $457,337
  • Cost for Inventory: $2,000 – $3,000 est.
  • Staff: Recruiting & training required
  • Clientele: None
  • Marketing Costs: $15,000
  • Goodwill: None

Value Proposition

  • Strong franchise with 640 licensed locations
  • Clear and cons ci se FDD and Agreement
  •  Great location near large tech and VC’s
  • Priced based on SDE.  SBA Pre-Approved
  • Plenty of street and lot parking
  • 4 to 6 classes offered per day, 7 days offered
  • Seller teaches 2-3 classes per week
  • Seller i s active 2–25 hours a week in business
  • Estimated 150 paying members
  • 2019 membership was 260

Revenue Breakdown

Financial Highlights

  • Listing Price: $275,000 + Inventory
  • 2021 Cashflow (SDE): $124,826
  • 2022 estimates gross sales to reach $350,000
  • Profitable during pandemic SDE $55,717
  • Seller worked more classes in 2021
  • Recommended Working Capital: $25,000
  • Inventory Estimated Monthly Average: $2K
  • PPP loans forgiven
  • Evening and weekend classes most popular
  • Trainers labor average 8%, sales labor 7%

Cashflow Analysis

Asking Price

The asking price is determined using a cash flow and asset methodology. Cash flow is the sum of net income from the business plus any non-cash expenses, non-recurring items and any seller’s personal expenses. The asset methodology takes into account what it could cost to open a similar business in equipment and square feet. A multi-factor multiplier is applied to the cash flow based on the condition of the business and the asset value is added to that result.

For this business, a three-year average cash flow is applied. The multiplier applied in this case is 3x, is the standard multiplier for franchises and based on recent sales of the same type of business with similar gross sales and SDE
The SDE value takes into account time to build up the goodwill and customer base. If you were to build out a similar space with like equipment it could cost upwards of $475,000 or more per the franchisor.

Funding Example

Purchase Price: $275,000

20% Buyer Down Payment

$55,000

Buyer’s Equity

80% Bank Loan

$220,000

10-Year term at a rate of 6.25% = Monthly loan payment of $2470

  • Cash Flow average: $98,315
  • Annual Payment to Bank: $29,640
  • Net Profit (After Expenses and loan payment): $68,675

* Please note that the decision of whether to extend a loan on any sale belongs to the bank, and this document does not guarantee specific terms or verify that financing is available.

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