Confidential — Acquisition Brief
The Deal Sheet · Feb 2026
Business-Level Analysis — Deal #113
Omaha-Iowa Four-Unit Salon Studio Rental Portfolio
Full acquisition analysis: financials, market context, valuation, risk assessment, and 100-day integration plan.
View Original Listing ↗ Conditional Recurring rent base, but the $2.2M ask (5.5x SDE) leaves 1.25x DSCR only if the owner takes no pay. Pursue at ~$1.45M with a seller note and an occupancy earnout.
$1,300,000
2024 Revenue
$400,000
Est. SDE (reported)
3.25x-4.1x
Est. Fair Multiple (Est.) SDE
$1.30M-$1.65M
Est. Fair Value (Est. midpoint ~$1.48M)
01 — Business Overview
At a Glance
Four franchised salon studio sites (115 studios, ~23,400 SF): two in Omaha, one in Lincoln, one in Sioux City. Est. 2021. $1.3M revenue, $400K reported SDE, ~90% occupancy, leases to 2036.
7.0
Revenue Quality
Diversified commercial + residential mix with strong recurring base
6.0
Market Position
Las Vegas: extreme heat demand, population boom, construction surge
4.0
Information Quality
Limited public data — full financials behind NDA; requires verification
Key Strengths
- Weekly studio rent from ~104 independent tenants. No single tenant is above ~2% of revenue.
- ~90% occupancy across 115 studios, with lease-up upside at the newest, largest site.
- Master leases run to 12/31/2036, giving 10+ years of site control with no development or ramp risk.
- Light labor model (2 FT + 4 contractors). No commission payroll or service delivery.
- Three metros with affluent trade areas ($85K-$120K+ median HHI) diversify site risk.
- Seller financing is offered and the sale is retirement-driven, which supports structured terms.
Key Questions
- Which franchise brand is this? What are the royalty, brand fund, transfer fee and remaining term per unit?
- Is the $41,667/mo rent the total for all 4 leases? Need per-site rent, escalators, CAM, renewal options and guarantors.
- Provide the rent roll: studio, weekly rate, tenant start date, deposit and delinquency for each studio.
- Provide trailing 36-month P&Ls by location. Is the newest site cash-flow positive yet?
- How is the $400K SDE built? List the owner comp, perks and one-time add-backs.
- Will the franchisor require a remodel, refresh or new-equipment package on transfer?
- Who holds the NE/IA cosmetology establishment licenses: the operator or each tenant?
- Is there outstanding build-out debt, equipment leasing or landlord TI clawback on any site?
02 — Financial Analysis
Reconstructed P&L
Estimated Income Statement
| Line Item | Amount | % Revenue | Benchmark |
|---|---|---|---|
| Master Lease Rent (4 sites, reported $41,667/mo) | –$500,000 | 38.5% | Est. salon-suite range: 30-40%; $21.74/SF on 23,000 SF |
| Est. CAM / NNN / Utilities | –$91,000 | 7.0% | Est. range: 6-10% |
| Est. Franchise Royalty + Brand Fund | –$91,000 | 7.0% | Est. range: 6-9% (brand-dependent) |
| Est. Staff Payroll (2 FT + 4 contractors) | –$91,000 | 7.0% | Est. range: 5-8% |
| Est. Owner Salary (add-back) | –$120,000 | 9.2% | Policy add-back: $120K ($500K-$2M revenue) |
| Est. Repairs, Maintenance, Janitorial | –$39,000 | 3.0% | Est. range: 2-4% |
| Est. Insurance (GL, Property) | –$19,500 | 1.5% | Est. range: 1-2% |
| Est. Local Marketing | –$13,000 | 1.0% | Est. range: 1-2% |
| Est. Admin / Software / Professional | –$26,000 | 2.0% | Est. range: 1.5-3% |
| Est. Other Overhead | –$29,500 | 2.3% | Est. range: 1-3% |
| Est. Depreciation & Amortization | –$30,000 | 2.3% | Est. $150K FF&E plus leasehold improvements |
| Est. Net Profit | $250,000 | 19.2% | Calculated: $1.30M - $1.05M total expenses |
| EBITDA (Est.) | $280,000 | 21.5% | Benchmark: 15–20% healthy |
| Estimated SDE | ~$400,000 | 30.8% |
SBA Financing Model
Estimated SDE of ~$400,000 can support SBA 7(a) debt service on a $2,200,000 acquisition. Assuming 10% down ($220,000) and a 10-year term at ~10.5% SBA rates, annual debt service is approximately $320,606. Estimated pre-tax income to owner: ~$79,394+ after debt service.
03 — Working Capital & Seasonality
Cash Flow Reality Check
$65,000 (Est.)
Est. Working Capital Needed
$91,000 (Est.; ~1.8 months of master rent + CAM)
Peak Capital Requirement
Low
Seasonality Risk
Monthly Revenue Seasonality (1.0 = Average Month)
Jan
0.98x
Feb
0.98x
Mar
0.99x
Apr
1.00x
May
1.01x
Jun
1.01x
Jul
1.00x
Aug
1.01x
Sep
1.01x
Oct
1.01x
Nov
1.01x
Dec
0.99x
Cash Conversion Cycle
Days Receivable
Est. 5 days
Days Payable
Est. 20 days
Net Cash Cycle
Est. -15 days
Assessment
Salon suites typically run a negative cycle because rent is billed in advance
Working Capital Recommendations
- Fund Reserve at Close: Hold $91K in reserve to cover ~1.8 months of fixed occupancy cost (~$50K/mo rent + CAM).
- Weekly ACH in Advance: Require autopay billed weekly in advance to keep receivables near zero and catch delinquency early.
- Deposit & Prepaid True-Up: Credit the buyer at closing for all tenant security deposits and prepaid rent the seller holds.
- Budget CAM Reconciliations: Reserve for annual landlord CAM and tax true-ups, which can hit as $5K-$20K lump sums per site.
04 — Revenue Quality
How Sticky Is the Revenue?
Revenue Breakdown by Type
Studio rent: tenants with 12+ months tenure (Recurring) 62%
Studio rent: tenants under 12 months (Repeat) 30%
Ancillary fees (retail, storage, amenities) (Repeat) 5%
Move-in, admin and late fees (One-Time) 3%
Customer Concentration (Est.)
Top 1 Customer
~2%
Top 5 Customers
~6-8%
Top 10 Customers
~11-13%
Concentration Risk: Low — Tenant risk is minimal. Site risk matters more: the newest, largest location likely holds an Est. 30-35% of studio capacity.
Revenue Retention Estimate: Est. 75-85% annual tenant retention; each 1 pt of occupancy is worth ~$14.4K revenue. Verify against the rent roll.
Estimated percentage of revenue retained after an ownership transition, based on industry benchmarks and business characteristics.
Churn Risk Factors
Competing suite brand opens nearby with free-rent promotions (Medium likelihood)
Mitigation: Lock in 12-month agreements with renewal incentives; monitor permits near each site.
Ownership change unsettles tenants (Medium likelihood)
Mitigation: Seller transition support of 90+ days, early tenant meetings and no rent increase for 6 months.
Consumer slowdown cuts stylist bookings (Low likelihood)
Mitigation: Affluent trade areas; offer short-term payment plans rather than losing tenants.
Stylists retire or leave the industry (Medium likelihood)
Mitigation: Run a steady recruiting pipeline with local beauty schools and maintain a waitlist.
03 — Valuation Assessment
What's This Business Worth?
Valuation Triangulation
| Method | Low | Mid | High |
|---|---|---|---|
| SDE multiple (3.0x / 3.5x / 4.0x on $400K) | $1,200,000 | $1,400,000 | $1,600,000 |
| EBITDA multiple (4.5x / 5.25x / 6.0x on Est. $280K) | $1,260,000 | $1,470,000 | $1,680,000 |
| Revenue multiple (1.0x / 1.15x / 1.3x on $1.3M) | $1,300,000 | $1,495,000 | $1,690,000 |
| SBA debt capacity (DSCR 1.50x / 1.25x / 1.15x on Est. EBITDA) | $1,281,000 | $1,537,000 | $1,671,000 |
Blended Fair Value
$1.30M-$1.65M; midpoint ~$1.48M (3.7x SDE / 5.3x Est. EBITDA) vs. $2.2M ask (5.5x SDE / 7.9x Est. EBITDA)
Premium Factors
Contractual weekly rent; tenant base is highly granular
8%
~90% occupancy with identifiable lease-up at newest site
7%
Lease term to 2036; no development or construction risk
7%
National franchise brand supports tenant attraction
6%
Seller financing available
6%
Discount Factors
Rent is 38.5% of revenue (~$5M remaining lease obligation)
8%
Short operating history (est. 2021); newest site still ramping
7%
No EBITDA, per-site P&L, rent roll or brand disclosed
7%
Owner-operated today; semi-absentee model is unproven
5%
Low barriers: competing suite brands can open nearby
6%
04 — Market Context
Market & Comparable Transactions
Omaha metro is above 1M people (1.2% in-migration), with 3.2-3.8% unemployment and wages below the US average. The stylist shift to suite rental supports demand; new suite supply is the key risk.
| Comparable | Revenue | Multiple | Location |
|---|---|---|---|
| BizBuySell national benchmark: small property management firms sold 2021-2025. Median price $397.5K; half sold at 2-3x SDE. | ~$566K avg; ~$167K median SDE | ~2.58x SDE median; ~0.80x revenue | National (US) |
| Est. analyst range for multi-unit salon suite franchise resales with leased sites. This is not a closed, verified transaction; use as a directional guide only. | Est. $0.8M-$2.5M | Est. 3.0x-4.5x SDE | National (US) |
| Century Sales affiliate bought 84-unit LaSeville Apartments. This is an owned-real-estate cap rate, not comparable to a leasehold operating business. | Not disclosed | ~7.1% cap rate (Omaha multifamily) | Omaha, NE |
| Seldin Company merged with OMNE Partners and USG to form a full-service management platform. Shows regional consolidation appetite; terms not disclosed. | Not disclosed | Not disclosed | Omaha, NE |
Bull Case
Newest site reaches 95% portfolio occupancy (+$72K revenue) and rents rise 3% (+$39K). SDE climbs to ~$500K, and a $1.45M entry becomes a ~2.9x multiple on stabilized earnings.
Bear Case
A competing brand opens near two sites and occupancy falls to 82%. Revenue drops ~$116K, and fixed rent of $500K cuts Est. EBITDA to ~$172K, below debt service at the asking price.
06 — Competitive Landscape
Who You're Up Against
Est. 25-40 salon suite facilities across Omaha, Lincoln and Sioux City, plus booth-rental salons (verify locally)
Est. Local Competitors
Consolidating
Market Structure
Est. 55-70% of regional suite capacity is franchise-branded
Franchise Penetration
Key Local Competitors
| Company | Type | Est. Revenue | Threat Level |
|---|---|---|---|
| Sola Salon Studios (if not the subject brand) | Franchise | Est. $300K-$500K per location | High: largest national suite brand; local presence to be verified |
| Phenix Salon Suites (if not the subject brand) | Franchise | Est. $250K-$450K per location | Medium-High: competes on amenities and move-in promotions |
| MY SALON Suite (if not the subject brand) | Franchise | Est. $250K-$400K per location | Medium: growing franchise footprint in the Midwest |
| Independent local suite operators | Independent | Est. $100K-$300K per location | Medium: undercut on price, often in older strip centers |
| Traditional booth-rental salons | Independent | Est. $150K-$600K per salon | Low-Medium: cheaper chairs but less privacy and autonomy |
Competitive Advantages
National franchise brand and stylist recruiting tools
Moderate
Turnkey build-outs in high-visibility, affluent centers
Moderate
Established tenant base; stylists' clients follow them, so relocating is costly
Moderate
Site control through 2036 master leases
Strong
Pricing power on weekly rent
Weak
Moat Assessment
Narrow moat. Tenant switching costs and prime sites help, but rival brands can replicate the model nearby. Value depends on occupancy discipline, not structural barriers.
05 — Risk Assessment
Risk Scores & Due Diligence
5.5
Market Risk
Medium — HVAC is essential in Las Vegas
5.5
Operational Risk
Medium — Labor + owner dependency unknown
3.0
Financial Risk
High — Estimated financials only
Due Diligence Priorities
- 1. Rent Roll Reconciliation: Tie the studio-level rent roll to bank deposits for 24 months. $1.3M / 103.5 occupied studios implies ~$1,047/mo (~$242/wk) per studio.
- 2. Master Lease Audit: Confirm per-site rent, escalators, CAM caps, renewals, assignment terms and guaranties. Model the full obligation to 2036 (~$5M+).
- 3. Franchise Agreement Review: Identify the brand and review the FDD. Confirm fees, transfer approval, remaining term, remodel obligations and SBA Franchise Directory eligibility.
- 4. Per-Location P&L: Isolate the newest site's occupancy, burn and ramp curve. Confirm each of the 4 sites covers its own rent and CAM.
- 5. Quality of Earnings: Validate the $400K SDE add-backs. Est. EBITDA is $280K after a $120K manager; check for deferred maintenance and owner perks.
- 6. Tenant Tenure & Churn: Measure 24-month tenant turnover, average tenure, delinquency and move-in concessions by site.
08 — Transfer Checklist
What Needs to Transfer
Est. $70K-$135K
Total Estimated Transfer Cost
Est. $70K-$135K (excl. working capital and deposits)
Est. 75-120 days
Estimated Time to Complete
Deal Transfer Checklist
✓
Contract Franchise agreement transfer (4 units) Critical
Cost: Est. $20K-$60K transfer fees Time: 45-90 days Franchisor approval, training and possible remodel requirements
✓
Contract Master lease assignments (4 sites) Critical
Cost: Est. $5K-$15K legal and landlord fees Time: 30-60 days Landlord consent, estoppels and buyer guaranty substitution required
✓
Contract Tenant studio rental agreements Critical
Cost: Minimal Time: At closing Assign agreements; transfer deposits and prepaid rent
✓
Contract Vendor contracts (janitorial, security, software)
Cost: Minimal Time: 15-30 days Review auto-renewals and termination terms
✗
License Local business licenses and occupancy certificates Critical
Cost: Est. $500-$2K Time: 15-30 days Reissue under the new entity in Omaha, Lincoln and Sioux City
✗
License NE and IA sales tax permits
Cost: Minimal Time: 7-14 days Needed only if retail products or taxable fees are sold
✗
License Cosmetology establishment licensing (NE DHHS / Iowa Board) Critical
Cost: Est. $0-$2K Time: 30-45 days Confirm whether the operator or each tenant holds the establishment license
✗
Insurance General liability and property policy Critical
Cost: Est. $15K-$25K per year Time: 14-30 days Must meet franchisor and landlord minimums; bind before closing
✓
Insurance Tenant certificate of insurance (COI) tracking
Cost: Minimal Time: 30 days Audit that all tenants carry professional liability naming the operator
✗
Regulatory Iowa foreign entity registration Critical
Cost: Est. $100-$500 Time: 7-14 days Required to operate the Sioux City location
✓
Regulatory Fire, ventilation and ADA compliance review
Cost: Est. $2K-$8K Time: 30 days Salon chemical ventilation and accessibility checks
✓
Regulatory Real estate license applicability
Cost: Est. $1K legal opinion Time: 14 days Likely not required for subleasing its own master-leased space; confirm with NE counsel
✓
Operational Access control, rent billing and franchise software Critical
Cost: Est. $2K-$5K Time: 30 days Migrate tenant ACH authorizations without billing gaps
✓
Operational Staff retention (2 FT + 4 contractors)
Cost: Est. $5K-$10K stay bonuses Time: At closing Community managers hold tenant relationships
✗
Operational Utilities and service accounts
Cost: Est. $2K-$10K deposits Time: 14-30 days Transfer all 4 sites to the buyer entity
Potential Deal Breakers
- Landlord refuses assignment or demands untenable guaranty terms
- Franchisor denies transfer or requires a costly remodel
- Rent roll does not support ~90% occupancy and $1.3M revenue
- Newest site loses money materially with no credible ramp
- Lease escalators push rent above 40% of revenue before 2036
06 — Post-Acquisition Plan
100-Day Integration Playbook
Phase 1 (Days 0-90)
Stabilize & Retain
Secure tenant confidence and continuity through the ownership change.
- Meet every tenant in person within 30 days
- Retain both FT staff with stay bonuses
- Move all tenants to weekly ACH in advance
- Install KPI dashboard: occupancy, churn, delinquency by site
Phase 2 (Months 3-12)
Lease-Up Newest Site
Close the occupancy gap at the largest, newest location.
- Recruit stylists via beauty schools and social channels
- Offer referral credits to existing tenants
- Test targeted move-in incentives with 12-month commitments
- Target 95% portfolio occupancy
Phase 3 (Months 12-36)
Optimize & Professionalize
Lift pricing and build true semi-absentee management.
- Implement 3% annual rent increases at renewal
- Hire or promote a GM for absentee operation
- Add ancillary revenue (retail, storage, laundry)
- Evaluate adding a fifth unit in the region
Value Creation Waterfall (3-Year Outlook)
Acquisition Price
$2.2M
+ Organic Revenue Growth (15%/yr)
+$2.1M Rev
+ Margin Expansion (to 20% EBITDA)
+$250K EBITDA
+ Multiple Expansion (3.5x → 5.5x)
+$2.0M uplift
Est. Enterprise Value (Year 3)
$5.5M – $7.0M
07 — Final Recommendation
Our Verdict
Verdict: Conditional — Proceed to LOI
Proceed to LOI at $1.45M base plus up to $150K earnout, contingent on the rent roll, per-site P&Ls, lease assignment and franchisor approval. Walk away above $1.65M.
Recommended Next Steps
- Request the rent roll, 36-month per-site P&Ls, tax returns and bank statements under NDA
- Obtain all 4 master leases and the franchise agreements; identify the brand and pull the FDD
- Call the franchisor to confirm transfer process, fees and any remodel requirements
- Pre-qualify with an SBA lender experienced in franchise and leasehold deals
- Commission a QoE review ($15K-$25K) before signing the purchase agreement
- Engage counsel on landlord estoppels, assignment consents and guaranty substitution
Suggested Offer Structure
$1.45M base (3.6x SDE): 80% SBA, 10% seller note on full standby, 10% buyer equity, plus up to $150K earnout tied to 95% occupancy at the newest site.
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Related Resources
Sources
BizBuySell listing #2522272 (bizbuysell.com) · Lee & Associates Omaha Multifamily Reports, Q2 and Q4 2025 · U.S. Bureau of Labor Statistics, Omaha MSA employment and wages, 2025-2026 · BizBuySell property management transaction benchmarks, 2021-2025 · Analyst note: supplied generic labor/COGS P&L template replaced with a salon-suite cost structure reconciled to reported SDE · SBA 7(a) terms assumed: 10% down, 10-year amortization, 10.5% rate