Purchase Multiples

[ZIDAD]

I am looking for some advise on the nightclub industry. I am currently evaluating an existing nightclub in a large Midwestern city. I am wanting to know what multiples of cash flow are commonly used when purchasing nightclubs. I am not familiar enough with the valuation side of the industry to know what is too much or too little. I have searched the internet, but have not had much success in finding what is common in the industry. Although I do not want to get burned, I also do not want to insult the current owner and thus kill the deal.

Any advise would be helpful.

Thank you.

JS

[David]

I have heard that you can take the current tax years gross and multiply it by three. This should give you a ballpark figure.

If I was going to make an offer on a club, I would find out what others like it have sold for in that area. I would contact your local real estate business broker and ask for all of the info that you need. They can also help you broker the deal. My personel feeling is to use a professional realtor. If the seller doesn't want to use a realtor, sometime might be a little fishy.