$10.2M
$864K
2.0x
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This established residential renovation company serves a broad territory across Eastern and Central Pennsylvania. Backed by a national franchisor, the enterprise specializes in wet-area modifications...
Why we like it
- Earnings quality is the standout: $864K of cash flow on a $1.75M ask is a 2.0x multiple, well below the 3x to 4x typical for established home-services operators. If even half of that cash flow survives an owner replacement and franchise fees, the cash-on-cash return at a normal acquisition leverage stack is exceptional.
- Bath and wet-area remodeling is genuinely durable demand. Aging homeowners need walk-in showers and accessibility conversions whether or not the economy is strong, and these are often need-driven jobs rather than purely discretionary kitchen-glamour projects.
- The national franchisor backing provides built-in lead flow, branded product, installer training, and an operating playbook. That infrastructure de-risks the transition for a new owner and reduces the key-person dependency that sinks most independent remodelers.
- Multi-territory coverage across PA and into MD means the platform already has geographic scale and is not a single-truck operation. That gives a buyer a foundation to add crews, densify existing markets, and potentially acquire adjacent franchise territories.
How to improve it
- Audit and optimize the franchise lead funnel within the first 90 days. Pull cost-per-lead and close-rate data by channel, then reallocate spend toward the highest-converting sources and kill the dead weight to lift booked-job volume without adding headcount.
- Tighten gross margin per job by reviewing labor scheduling and material procurement. Even a 3 to 5 point margin improvement on a business doing this kind of cash flow drops six figures straight to the bottom line.
- Build a sales follow-up and financing-attach process. Wet-area remodels are ticket items where offering consumer financing at the point of quote can meaningfully lift close rates and average job size.
- Install a real management layer so the business is not dependent on the seller. Promoting or hiring a general manager early protects the cash flow and sets up the option to run this semi-absentee or roll up additional territories.
- Layer in adjacent wet-area services like tub-to-shower conversions, accessibility retrofits, and tile work if not already offered. These extend the average ticket and increase the value extracted from each lead the franchise already pays to generate.
- Pursue territory expansion through the franchisor. If additional PA or MD territories are available, acquiring or developing them creates a clear roll-up path with shared overhead and a single management team.
Diligence notes
- Demand the franchise agreement and confirm transfer terms, royalty and marketing fee percentages, remaining term, and renewal rights. The 2.0x multiple may reflect franchise-transfer friction or fees that materially reduce true owner earnings, so model cash flow net of all franchisor obligations.
- Reconcile the $864K cash flow figure to tax returns and bank statements, and isolate how much is owner labor versus transferable profit. A working owner running estimates and sales could mean a large add-back that disappears when you hire a replacement.
- Get revenue, since it was not disclosed. Without the top line you cannot assess margin, job volume, seasonality, or whether the cash flow is sustainable, and this is the single most important missing number in the listing.
- Investigate customer acquisition dependency on the franchisor's national marketing. If most leads come from corporate spend, your real cost of customer acquisition and the durability of lead flow are dictated by a third party you do not control.
- Verify crew and subcontractor structure, including whether installers are employees or subs, retention, and any labor concentration. Remodeling quality and reputation live or die on installer reliability, especially across multiple territories.