The company is the highest quality service provider of commercial kitchen exhaust cleaning (KEC) located in Northern Virginia and servicing the Washington, DC/Baltimore region. The company serves hundreds of commercial and government customers. Their core service is removing grease from the kitchen exhaust hood, duct work, and fan to limit the accumulation of flammable cooking byproducts. Their customers are required by law to have professional 3rd party grease removal services performed on a routine basis.
The company executed a management change at the end of 2012 that improved the company margins and profitability, and put the company on a solid growth path. The company continued to do well in 2015. With a number of growth initiatives in place, the company expects continued growth in 2016 of about 10% in revenue. The company has an extensive data base of over 600 hood and duct configurations for key customers. This is augmented with a 22 GB file of photos showing before and after cleanings at each customer. This is a clean company which is well run and has a very positive culture.
The current lease is for 2,314 square feet in a good location in an industrial park with excellent access to interstate highway system. The leased space is approximately 1/3 office space and 2/3 warehouse/garage. The facility is well suited to the needs of the business. The lease expires in Sept 2016. The facility is a good location and the price is reasonable.
The KEC industry is extremely fragmented nationwide due to low barriers to entry. As a result, dozens of small, owner-operator companies typically compete for the least profitable and most price-sensitive customers in each local market. Likewise, the KEC industry is extremely fragmented in the DC/Baltimore region and this company is one of the largest players in the market. Larger operators like this company are usually certified by the International Kitchen Exhaust Association. There are just a handful of $500,000+ revenue operators in the DC/Baltimore market, and they compete for the higher value customers. Among the larger operators, this business has captured ~450 high quality active/recurring customer locations via several competitive advantages.
Growth & Expansion:
2016 expected to yield about 10% revenue growth. The region is experiencing strong restaurant industry growth (approximately 4% growth in # of locations each year), which is increasing demand for KEC services across the region. Since the KEC market is so fragmented, growth could come from gaining market share in their large, existing market rather than geographical expansion. Additionally, growth could come from expansion into other pressure washer related services (decks, sidewalks, walls, garages, etc). This would be a natural place to add services since most existing customers are serviced at night and the pressure washers and vehicles could be used during the day to perform these services.
Support & Training:
Current General Manager is willing to work with a new owner post-closing to ensure a successful transition.
Reason for Selling:
Other business and career interests
Asking Price $695,000
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