Description

This opportunity involves the sale of an established Franchise location of a top-rated leader in the wholesale/distribution of Automotive Component Parts utilized by the aftermarket. This 13-year old franchise operation is a Distributor for major brand name Manufacturers for the Southern California marketplace. Existing exclusive territory, capable of providing 10 to 15% organic growth annually.
A combination of exceptional customer service and support, competitive pricing, and a strong marketing and promotional calendar have made this company the leading distributor of Brake, Chassis, Ride Control and Clutch components. Existing Warehouse is about 12,900 Sq Ft of Space. Owner is also the landlord and is willing to extend a long term lease at favorable terms.
Annual revenues of close to $4.2MM, and Seller's Discretionary Cash Flow of close to $470K. Sale includes $800,000 worth of Inventory (at Cost), $50,000 worth of FF&E at fair market value, and $350K of receivables over payables.
This Franchise has an exclusive 15 sq. miles radius, a well-defined and well-protected territory. Customers comprise of various Auto Repair Shops as well as well known Auto Retail Chains, such as Goodyear , Firestone and Sears . It is estimated that in the current territory this Franchise has 60% market penetration. Recently won a bid from an Orange County government authority with a large fleet of vehicles, that would potentially open up new channels.
Recent product additions will enhance value offering to clients. Products are added in categories such as brake pads, TRW chassis and suspensions, Hitachi & Empire axles etc. Company imports rotors from South America directly from manufacturers at very competitive prices which allows a unique market differentiation. Other product categories presently enhanced are clutches and diesel related products.
A recent IBISWorld Industry report predicts that industry revenue is expected to increase at an annualized rate of 4.3% to $177.6 Billion by end of 2015, fueled by improved demand from car and automobile manufacturers. The same report projects industry revenue to grow to $198.4 Billion in the five years to 2020. As consumers’ vehicles depreciate, demand for new cars will increase. As a result, automakers will increase demand for components from auto parts wholesalers as new vehicle production increases. The average age of vehicle fleets is expected to increase in 2015.
Support from the Franchisor is excellent, including an integrated system for inventory control and financials. Within the warehouse there is a front office, where administration, accounting, orders and scheduling are handled, which occupies approximately 2,000 square feet. The remainder space is used as a warehouse, which contains 95% of the products shipped to customers.
The business is open seven days a week: Monday to Friday, from 8 am to 6 pm, Saturday from 8 am to 4 pm, and Sunday from 9 am to 3 pm. It operates with about 14 employees as well as an outside delivery service with 16 contract drivers.

Financial Summary

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