Client Background
A UPS franchise operator with 10 locations needed a business valuation for transaction planning. The owner was considering selling a portion of the business while retaining a controlling interest. The goal was to establish a fair market value for negotiations with potential buyers and lenders. The client hired Development Theory to do a business valuation for a UPS franchise operator.
The Challenge
The valuation process faced several hurdles:
Multi-location Complexity: Each store had different profitability levels.
Franchise Agreement Limitations: Transferability of ownership had restrictions set by UPS.
Uneven Financials: Some locations had better bookkeeping than others.
Competitive Market: Buyers needed strong justification for the valuation given industry competition.
Our Approach
To ensure an accurate valuation, we performed:
Financial Adjustments: Normalizing revenue and expense figures for consistency across locations.
Profitability Segmentation: Breaking down performance by store to assess individual value.
Market & Industry Benchmarking: Comparing store earnings and franchise resale values to similar businesses.
Valuation Methodologies: Using Income Approach (DCF), Market Approach, and Franchise-Specific Multiples.
Buyer Strategy Assessment: Identifying financing options and tax implications for potential buyers.
The Solution
The valuation report provided:
An accurate valuation for transaction planning and negotiation leverage.
Clear justifications for store values, allowing the owner to separate the highest-performing locations for a premium sale.
A roadmap for potential buyers, helping them understand investment returns.
Guidance on structuring the sale to comply with franchise regulations.
Results & Impact
Two locations each sold at greater than 8% above the initial estimated price.
Retained ownership stake in the most profitable stores, allowing continued income.
Secured long-term financing for business expansion using valuation data.
Buyers were able to secure SBA lending based on the structured valuation report.
Client Feedback
"I didn’t realize how different each store’s value was until we broke down the numbers. The valuation helped me maximize my return and still keep a solid stake in the business."
Development Theory Can Help Business Owners Like You
Do you know what your business is really worth? Whether you're planning to sell, seeking financing, bringing on a partner, or making strategic decisions, a professional Business Valuation provides the insights you need. At Development Theory, we deliver accurate, data-driven valuations that help business owners understand their company’s worth and identify opportunities to increase its value over time. Don’t wait until you’re ready to exit—the best time to know your business’s value is now.
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