How much is a dry cleaner worth?

Most established dry cleaners sell for roughly 2 to 4 times EBITDA. Run your own numbers, or read on for how the calculation works and what happens when the business does not earn.

Start with EBITDA

EBITDA is what the business earns in a normal year after every operating cost: all revenue in, minus rent, utilities, payroll, solvent and supplies, insurance, and everything else it takes to open the doors. A business with $200,000 in EBITDA lands somewhere around $400,000 to $800,000. A business with $75,000 lands around $150,000 to $300,000.

If you work in the plant, read this first

Dry cleaning runs on labor in a way coin laundry does not. If you press, spot, run the counter, or open and close, a buyer has to pay someone to do all of it. That salary comes out before the multiple. Owners who leave it out arrive at a number no buyer can pay, and then hear offers that feel insulting. Put it in, and the figure you calculate is one a real buyer can meet.

What moves a dry cleaner up the range

Payroll as a share of revenue moves it more than anything else. A plant running payroll near a third of sales prices very differently from one running payroll at two thirds. It is the first line a buyer looks at, and usually the line an owner has never framed that way.

Route and commercial accounts carry real weight. Hotels, restaurants, uniform contracts, and a delivery route are repeat revenue with a name attached to it. Counter traffic is repeat revenue with nobody's name on it.

Equipment age sets the next five years of spending. The machine and its solvent, the boiler, the presses, and the year each went in. A plant running old equipment still sells, and the buyer prices the retooling.

Clean records close the gap between what you say and what you get. Filed returns that agree with your P&L let a buyer pay for everything the business actually earns. Our document checklist covers what to gather.

When the business does not earn

Plenty of plants that have been open for decades do not clear a profit once a manager is priced in. That is common in this industry right now and it is not a verdict on the owner. It does mean the multiple has nothing to work on.

It does not mean you have nothing to sell. The equipment has value. The customer list and any route have value. The real estate, if you own it, is very often the largest asset in the picture and is valued on its own terms. A business in this position is priced off its parts, and that price can still be a real number. It is worth knowing which of the two situations you are in before anyone puts an offer in front of you.

Where the range comes from

The 2 to 4x range is where deals for established garment care businesses clear, year after year. Plants with heavy payroll, short leases, and aging equipment trade below it. Plants with a route book, controlled labor, and clean records push the top of it.

What to do with this

We are Valemont Group. We buy dry cleaners and laundromats, and we operate them after closing. We will tell you which of the two situations above your business is in, and show the arithmetic either way. A first conversation is confidential and commits you to nothing.