Gyms, salons, and local service retail live on memberships and repeat visits. This guide covers the benchmarks buyers use and the red flags to check before making an offer.
Typical retail service valuations run 1.5x to 3.0x SDE; contract memberships push toward the high end, pay-per-visit models pull it down. Key factors: membership churn and contract terms, lease and location quality, staff retention — especially license-holding staff — and equipment condition. Before trusting the broker's numbers, verify churn from billing records rather than the broker's summary, check whether the lease is assignable, and watch for owner-injected add-backs like family payroll or personal expenses.