MULTIPLES VS EARNINGS
Seems a great deal of press on the subject of Automotive Franchise values. Most have to do with the MULTIPLE.
While the "assumed" multiple for a particular
franchise is important, the most important aspect of Franchise values is EARNINGS. We have now four sources, competitors, all posting quarterly
reports on current multiples. The bar is set!
To arrive at the value of any franchise, the multiple must be multiplied by earnings. Therefore, it is earnings that most drive the value. Arriving at the correct earnings is the Key in marketing any dealership. At Gill Automotive group, we believe that the stated multiple is simply the starting point, and the beginning point in our valuation process. To the stated multiple, several factors are considered to arrive at the adjusted multiple. Franchise, location, Reputation, length of time of ownership, etc. all affect the final multiple. Once determined, then earnings come into play.
Earnings are obviously key! However, Getting to the true earnings is the art of preparing a franchise for sale. Our summary valuation is the initial step in the process. Several of our competitors charge as much as $35,000 , our summary valuation is prepared at no cost! Secondly, our valuation is to the penny of the OEM Financial statement vs a "rounding factor" used by some of our competitors. Once the financials are summarized, we then begin to analize the production of the dealership, seeking areas of obvious improvement, which are reflected in our final analysis as "potential opportunities". With over 100 years of retail automotive experience, our staff can identify areas of opportunity and bring this addition income into the equation in arriving at the final earnings.
Now back go Profits. If the correct "massaged" multiple is then a factor of "massaged" earnings, the MAXIMUM VALUE is delivered to the selling dealer. This process is almost impossible for a firm that has never spent a day working in a franchised Automobile dealership!
The Gill Automotive Group Summary Valuation and Executive Summary "Package" rivals any marketing package offered in automotive Mergers and Acquisitions. Our "The Perfect Fit Process, connecting buyers and sellers for unparalleled success (r)" has been proven time and again! Our expertise in automotive M&A is proven time again. We are a signature close away (front page Auto News) from being on all sellers speed dial!
We are available to discuss at any time. Call or email Andy Gill at 678-232-1016 or andy@gillauto.com. I will promise, a person with the last name Gill will answer the phone.