Hi All - I am interested in buying a fully operational gym. It is about 15k sq ft and has a 5 lane lap pool. The revenue is $900k per year and the owner total take home is $ 195k a year.
The whole facility is leased - just signed a new lease this year with a slight monthly increase ( not enough where it makes that much difference ). Lease is 10 years with an optional renewal for another 10 years.
All the equipment in the gym is very very old but it works. I would estimate the book value of the equipment to be zero. I’m sure the next owner would need to make some new equipment purchases.
The owner is not involved in the day to day operations and drops by once per week to check on things.
What do you think would be a fair market selling price for this business??
( I would of course get an appraisal from a professional if I decided to move forward )
As someone who has bought gyms before. A 3x ebitda is the standard formula for a gym pulling in 200k. So 600k valuation is fair. 400k+ and you’re 4ish multiple.
I would caution paying that full price considering the equipment age. If it’s “very very” old then repair bills will add real quick at that size of facility. I’ve typically replaced all equipment every 8-12 years since it ends up costing more to repair than replace.