An overview of a business offered for sale, including the price, price rationale, outlook, as well as pros and cons.
The Business A charming, old-fashioned ice-cream parlor and family restaurant that sees roughly half of its sales from tourists. Located on a heavily traveled road near a popular vacation and retirement community in coastal Maine, the business operates year-round. The shop scoops more than 40 flavors of ice cream, frozen yogurt, and sorbet, which it churns out on the premises every day. Sales of the cold stuff make up 40% of revenues, while breakfast, lunch, and dinner account for 55%. The building and 1.3 acres of land are included in the sale. The owners wish to retire.
Recast earnings before $60,000 $92,000 $81,000depreciation, interest, taxes, and owner compensation
Price $625,000 plus inventory
Outlook Frozen desserts make up a sweet $10-billion industry in this country, half of it in products consumed away from home. (Ice cream is especially big with seniors.) This particular shop appears well positioned locally; only the Midwest can lick New England in terms of per capita ice-cream consumption. And although there are plenty of restaurants in the area, there's not much competition in ice cream.
Price Rationale Establishments like this tend to sell for 80% of sales when the deal includes the real estate. In this case, that's $316,000 -- about half the asking price. The seller values the real estate alone at $400,000 and puts a premium on the opportunity to grow the brand and expand into supermarkets. But given that the shop's ice-cream sales amount to just $160,000, insiders say there may not be much name recognition to go on. The seller wants a $250,000 down payment, with extended financing coming from the seller and a bank. Experts say the terms could make the price work. It would work a lot better if it were lower; most insiders would put it at around $400,000.
Pros Attractive locale. Good local market. The chocolate-smeared, gap-toothed smile of a satisfied customer. And just think how much fun research and development would be.
Cons Summer: Seven-day workweek. Winter: Nostalgia for the summer frenzy. Year-round: Negative fallout from all that R&D. (Say good-bye to that trim waist.) And the price. Will the owners get it? Not in a month of sundaes.
-- Christopher Caggiano
Inc. has no stake in the sale of the business featured. The magazine cannot confirm the accuracy of financial or other information offered by the seller. Inquiries should be directed to Country Business Inc., at 207-773-1745.