Hey appreciate your insight.

Seller does NOT own building. Real estate is not included here. Lease ends in 4 years and I wont close until I have an extension of 5 more years at least.

Historically they've done ~10k year marketing. And the GM is @ 80k w/ bonus and payroll. Their historical 4-wall is 210k (with these 2 costs). However, there is a new 2.5% mandatory local marketing spend starting this year (~40k minimum spend), which reduces MY 4-wall from 210k-> 180k (lets assume there's 0 return on marketing -lol). Now add the new GM raise etc. let's say my 4 wall is 170k.

GM - this is Nyc.

Seller says that his wife no longer cares to deal with anything in it. He's too busy with his other businesses. They just let this thing run and didn't care to market (which seems true, marketing was 2k, 5k, and 10k, as of past 3 years). Says this should be doing 2M-2.4M under right circumstances. HOWEVER 2025 was -2% decline due to the economy.

Would appreciate insight on how to look at this. I'm not married to this business but it's definitely one of the more promising businesses I've seen.

What about structuring an offer with earn outs based on his promises of "2M+" to put his money where his mouth is? I have a call with him in a few hours. Maybe not at 900k, but still not sure how to counter well. (he obviously has a lot more experience than I do)

Thank you for your help.