Commercial Exhaust Cleaning, Memphis Foodservice Contractor Since 2009

$2.0M

Revenue

$506K

SDE

1.0x

Multiple

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Full Editorial Writeup

This is a Memphis-based commercial kitchen exhaust cleaning operation serving foodservice and institutional customers on scheduled service cycles. Restaurants, cafeterias, and other high-use kitchens are required by fire code and insurance mandates to keep exhaust hoods, ducts, and ventilation systems cleaned on a disciplined calendar, which is exactly the work this company delivers. Founded in 2009, it runs eight employees (six full-time, two part-time) with field crews completing jobs at customer sites while the owner coordinates estimates, scheduling, crews, and documentation.

Revenue of roughly $2.0M is anchored by repeat cleaning visits and supplemented by preventative maintenance, technical repair, and consulting work. Reported cash flow of $506k implies an unusually fat 25 percent SDE margin for a field-services business, which is the number that needs the hardest look in diligence. The asking price of $522,500 pencils to a striking 1.03x cash flow, well below typical multiples for a recurring commercial-services business.

The operation is asset-light on real estate but depends on service vehicles, cleaning equipment, chemicals, and trained technicians who understand fire-code and safety requirements. The moat here is regulatory: kitchen exhaust cleaning is not optional, it is compliance-driven and repeats on a fixed cadence, which makes the account base sticky if the relationships transfer cleanly.

Why we like it

Earnings quality looks strong on paper with $506k of cash flow on $2.0M revenue, a 25 percent margin that is high for field services and signals either genuine pricing power or an owner doing significant billable work. If the margin holds under scrutiny, buying it at 1.03x cash flow is aggressively cheap for a recurring-revenue services business.
The moat is regulatory and non-discretionary: NFPA 96 fire code and insurance requirements force commercial kitchens to clean exhaust systems on a fixed schedule, so demand does not evaporate in a downturn. Customers cannot skip this work without risking fire liability and failed inspections, which makes the revenue base durable.
Kitchen exhaust cleaning rides a stable tailwind of code enforcement and a large installed base of restaurants, cafeterias, hospitals, schools, and institutional kitchens across the Memphis market. The listing explicitly notes room to grow by broadening use of related maintenance and repair services within the existing account base.
An operator advantage exists for a buyer who can systematize scheduling and sales, because the current owner personally handles estimates, calendars, crews, and documentation. Installing a route-based CRM and a dispatcher frees the owner role and creates a repeatable playbook for adding accounts.

How to improve it

Convert loose repeat relationships into formal recurring service agreements with defined cleaning frequencies (monthly, quarterly, semi-annual) and auto-renewal terms. Contractual cadence increases visibility, supports the multiple on resale, and reduces the risk of accounts churning after the owner leaves.
Build out the preventative maintenance and technical repair lines, which are already mentioned but appear underdeveloped. Cross-selling hood repairs, fan replacements, filter programs, and rooftop grease containment to the existing exhaust cleaning base lifts revenue per account without new customer acquisition cost.
Implement route density optimization and job-costing software to squeeze more revenue per crew day and confirm true labor margins. Tighter routing across Memphis and Shelby County cuts windshield time and directly expands the field team's utilization.
Replace the owner's estimating and scheduling role with a hire or a service manager plus a CRM within the first 90 days. Documenting the estimating logic and account-handoff process protects continuity and makes the business genuinely operator-optional.
Pursue certification and marketing around NFPA 96 compliance to win insurance-driven and multi-location foodservice accounts. Selling compliance documentation and inspection reports as a value-add differentiates against low-bid competitors and justifies premium pricing.
Expand geographically into adjacent Tennessee, Mississippi, and Arkansas markets using the existing crew model, since the tri-state area around Memphis is a natural service radius. Add a second crew before adding overhead to keep incremental margins high.

Diligence notes

Stress-test the 25 percent SDE margin, which is high for a labor-intensive field-services business. Determine how much of the $506k cash flow reflects the owner personally performing estimating, sales, or field work that a buyer would have to replace with paid staff.
Analyze account concentration and retention: pull the customer list, revenue by account, and multi-year retention to confirm the revenue is genuinely recurring rather than dependent on a few large foodservice clients. Verify whether service is under written contract or handshake repeat business.
Review NFPA 96 compliance, technician certifications, safety records, and any insurance or bonding requirements. Fire-code work carries liability exposure, so confirm there are no open claims, OSHA issues, or lapses that transfer to a buyer.
Confirm the condition, ownership, and value of the service vehicles, cleaning equipment, chemicals, and storage arrangement. Understand what capex is deferred and whether the modest office and secure storage are leased on transferable terms.
Clarify the reason for sale and the extent of owner dependency, since the owner coordinates nearly every non-field function. Map exactly which relationships and tribal knowledge leave with the seller and whether the offered transition period is sufficient.
Validate the low 1.03x multiple, which is suspiciously cheap for recurring commercial services. Investigate whether it signals a motivated seller, unverified financials, undisclosed liabilities, or a soft customer base that a buyer must confirm before offering.

Source

Originally listed on BizBuySell. View original listing →