Client Background
A fitness studio chain with five locations was preparing for a private equity sale as the owner sought to exit the business and retire. This client hired Development Theory to help with an exit plan for a fitness studio.
The Challenge
Inconsistent Profitability Across Locations: Some studios were highly profitable, while others operated at a loss.
Lease & Franchise Agreement Challenges: Some locations were under long-term lease agreements, complicating the sale.
Employee & Client Retention Risk: Uncertainty about new ownership could cause employee and client turnover.
Owner’s Involvement Too Central: The business relied heavily on the owner's personal brand, making transition difficult.
Our Approach
Profitability Optimization & Location Valuation: Identified high-value locations and structured the sale accordingly.
Franchise & Lease Negotiation Strategy: Assisted in renegotiating leases and franchise agreements to increase buyer appeal.
Employee & Client Retention Strategy: Developed a transition plan to retain key staff and customers.
Owner-Independent Branding & Marketing Shift: Positioned the business as scalable beyond the current owner, increasing buyer confidence.
Private Equity Buyer Targeting & Negotiation: Identified interested private equity firms and structured negotiations.
The Solution
Increased overall business valuation by $2 million through lease restructuring and branding adjustments.
Found a buyer willing to retain all employees, maintaining business stability.
Structured a 5-year seller earn-out agreement, allowing the owner to exit gradually.
Optimized financial records and projections, making the sale seamless for investors.
Results & Impact
Business sold for $7.8 million, exceeding expectations.
Employee retention rate remained at 90%, ensuring operational continuity.
Customer retention stable, maintaining business reputation.
Owner successfully transitioned out within three years, allowing for a smooth exit.
Client Feedback
"Selling my fitness business felt overwhelming, but this exit plan gave me a clear roadmap. I walked away with a great deal and peace of mind!"
Development Theory Can Help Business Owners Like You
Looking to retire one day like this business owner? Our Exit Planning service provides you with an estimate of your business's current value and insights on how to leverage that value to retire. Don't miss out on the opportunity to plan for your future.
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