Is 10X EBITDA normal for franchise groups?

by a searcher from Louisiana State University - E. J. Ourso College of Business

5 months ago

I'm talking to a broker representing a group of remediation franchises. The group is doing $500k EBITDA and the broker is adamant that it'll go for $5m. Most businesses I've reviewed are not franchises but are considered high at 6x. 

Are valuations like this normal for franchise groups?

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33 comments

lender

Find a new broker or get one on your side to deal with the unreasonable one. A 10x multiple on this franchise is absurd.

4 months ago | like reply | 0 likes

searcher from University of Utah - David Eccles School of Business

Nope. Way too high. I had a remediation franchise business and sold it. Depending on which one it is (stability of revenue source), these things are 3-4x.

4 months ago | like reply | 0 likes

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