2-Location Auto Paint & Collision Business, Southern California Franchise

$2.2M

Revenue

$900K

SDE

3.1x

Multiple

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Full Editorial Writeup

This is an established auto paint and collision operation running out of a 17,500+ square foot facility in one of Southern California's busiest automotive corridors. The shop is a branded franchise founded in 2013 that handles a balanced mix of retail, trade, and fleet work, which keeps the revenue book diversified and less exposed to any single channel drying up. The facility is purpose-built for high-volume body work with two drive-through paint booths sized for trucks, a frame machine, dual compressors, and solar panels that trim operating costs.

At $2.2M in revenue and $900K in EBITDA, this business runs at a roughly 41% margin, which is unusually strong for a collision shop and warrants scrutiny in diligence. The operation is already manager-run with a general manager and a full production crew of 10 full-time employees in place, so it fits either a passive-leaning investor or an owner-operator who wants to lead rather than turn wrenches. Estimating, production, and customer service processes are systematized and transfer to a new owner.

The seller is retiring and offering a structured three-week training program plus ongoing support, along with access to the fleet and commercial account channels and an established lead and marketing engine. The listing frames the shop as a defensible local player with few comparable independent competitors, positioned for a buyer looking to add a third location or fold in an existing shop. The building is leased at $15K per month with the lease running through 2038.

Why we like it

Earnings quality is the headline: $900K EBITDA on $2.2M revenue is a 41% margin, far above typical collision shop economics where 15-20% is common. High average tickets, low receivables, and an insurance/fleet mix support the cash flow, but that margin is high enough that verifying it against tax returns is the whole ballgame.
The revenue is genuinely recession-resistant because collision and body work is need-driven: cars get wrecked in good times and bad, and insurance covers a large share of the ticket regardless of the economy. The retail, trade, and fleet blend spreads the book so no single channel failure sinks the shop.
Southern California's dense automotive corridor with strong visibility gives real demand density, and the listing claims few comparable independent competitors nearby. Over a decade of local history plus a recognized franchise brand builds a defensible position that is hard for a new entrant to replicate quickly.
The asset is turnkey and already manager-run with a GM and full production crew, so it survives a transition without the owner working the floor. A buyer with an existing automotive group can bolt this on for immediate scale, and the systematized estimating and production processes reduce key-person risk.

How to improve it

Pull the DRP (direct repair program) relationships apart and pursue deeper insurance carrier partnerships. Getting on additional insurer preferred networks drives steady referral volume without marketing spend, and it is the single biggest lever for a collision shop to add captive demand.
Push cycle time down through better parts procurement and blueprinting. Faster turn means more cars through the two paint booths per month, which converts the existing fixed facility footprint into incremental revenue at high marginal profit.
Formalize and expand the fleet and commercial account book. Fleet contracts deliver predictable, repeatable volume at negotiated rates, and locking in more municipal, delivery, or rental fleet accounts shifts the mix toward higher-visibility recurring-style work.
Systematize the lead and marketing engine with tracked ROI on every channel. If the shop is running on brand and referral today, adding paid local search, review generation, and a CRM that follows up estimates will lift close rates on retail tickets.
Evaluate raising throughput with a second shift or additional certified techs. The facility already has capacity built for volume, so the constraint is labor, and staffing a second shift lets you monetize the booths during otherwise idle hours.
Explore adding ADAS calibration and EV repair capability in-house. These are growing, high-margin services that shops increasingly must outsource, and bringing them in-house captures revenue currently leaving the door while future-proofing the operation.
Renegotiate parts and paint supplier pricing on consolidated volume. If a buyer folds this into an existing group, combined purchasing power on paint, materials, and OEM parts drops COGS and directly widens an already strong margin.

Diligence notes

Verify the 41% EBITDA margin against three years of tax returns and P&Ls, because it is well above collision industry norms and is the entire investment thesis. Confirm whether the $900K EBITDA is truly clean of owner add-backs, franchise royalties, and rent, and reconcile it to bank deposits.
Scrutinize the franchise agreement in full: royalty rate, marketing fees, transfer approval, remaining term, and renewal rights. As a franchise this is not a fully independent asset, and franchisor fees and restrictions directly affect the real net you keep and your ability to expand.
Examine the customer and insurance concentration. Understand what percent of revenue comes from a single DRP carrier or top fleet account, because losing one insurance relationship can gut a collision shop's volume overnight.
Review the lease terms carefully given $15K monthly rent runs through 2038. Confirm the rent is at market, check for escalation clauses and CAM charges, and verify the lease assigns cleanly to a new owner without landlord veto.
Assess the GM and production crew stability and comp. The deal is sold as manager-run, so if the GM leaves post-close the value proposition collapses; secure retention terms and understand whether key techs are I-CAR certified and likely to stay.
Confirm the age and condition of the paint booths, frame machine, and compressors relative to the $60K FF&E figure. Collision equipment is capital-intensive and a near-term booth or frame machine replacement could be a six-figure surprise not reflected in the asking price.

Source

Originally listed on BizBuySell. View original listing →