Retail Stores (clothing, convenience, hardware, florists, auto related etc)
* 1.3 to 2.3 times SDCF, plus inventory
* 3 0% to 50% of Annual Sales, plus inventory
Key Drivers to examine
* Location, Location. high traffic area, growth area, parking
* Lease (term and rate), how it compares to market rates
* Knowledge of market (is it part of successful franchise with market data or independent)
* Employees (length of service and trained or excessive turnover)
* Relationship with suppliers
* Competitors in close proximity
* Gross Margin earned
* Clothing stores at lower end due to fashion changes and inventory risk
Structuring the Deal
* Downpayment 50%, Vendor 25%, Bank financing for capital assets
25%, and 70% of the inventory value