How to Buy a Yogurt Business - Three Guidelines

Considering the popularity of the product and the industry’s history of maintaining solid business during recessions, it should come as no surprise that many entrepreneurs seek to buy a yogurt business. And with warm weather approaching, the opportunity to sell cold refreshment is an added incentive to get involved in this industry--either with a franchise company or an independent enterprise that sells yogurt in carton, cone and cup.

To buy a business in this category that will succeed and provide a reasonable return on investment, an entrepreneur needs to be prepared with a bit of knowledge, including these three guidelines.

A critical ingredient in a successful yogurt business is a high traffic location. But a visible position on a popular street or in a busy strip or shopping mall often comes with lease terms that benefit the owner of the property rather than the business.

The smart buyer seeks businesses with long-term leases--at least seven years--at a rate that is readily supported by the business income.

Rent Ratio

A small shop with a low level of business may struggle to support a rent amount of a few hundred dollars per month. Meanwhile, the operator of a large yogurt business with high volume may have no trouble writing a rent check in the thousands.

Rather than getting confused by the wide variations in rent amounts, the informed investor seeking to buy a yogurt business looks at the rental amount--more specifically, the total occupancy costs--in terms of their relationship to gross revenues. The sum of rent, maintenance and utilities should not exceed 20% of total income. A business owner paying in excess of that ratio is probably working more for the landlord than for him or herself. The operator enjoying a solid return on investment is probably incurring occupancy expenses that add up to less than 18% of total revenues.

Product Cost

The amount an owner spends on product also can vary widely as a percentage of gross, depending on the type of business. A high volume store that sells mostly prepackaged product, or sweet dessert extruded by machine, and pays close to minimum wage for employees to handle the transactions--the fast-yogurt approach--can afford to expend up to one third of its total gross sales on its product.  The other way of looking at this, of course, is that this model yields a slim margin, and the company will need to maintain that high gross to cover overhead and be profitable.

By contrast, the company offering more flavor choices and requiring more labor to serve the product will probably collect a higher dollar amount per transaction than the fast-yogurt model, and will need to keep its inventory costs closer to the 20% to 25% range.

Business Pricing

Many business appraisers and experienced brokers believe that the best rule-of-thumb approach for valuing a yogurt business is to use a factor of 2.5 times owner’s annual net earnings, as calculated before the deductions for interest, taxes, depreciation and amortization.

The owner making $100,000 per year according to the EBITDA formula will likely be justified asking $250,000 for the business.

It may be appropriate for the investor who wants to buy a yogurt business to pay more than the rule-of-thumb figure if the seller is earning in excess of the 15% of gross, standard in the industry.

Added value is also indicated by a longer-than average lease--10 years or more, and a particularly attractive rental rate.

Willingness of the seller to carry back 25% to 35% of the purchase price also contributes value to the business. The price can climb another 10% or so if the package includes attractive financing terms offered by the seller.

The entrepreneur looking for an investment with a good future should consider the idea of buying a yogurt business, using these three guidelines to help determine the viability of each offering.

If you are searching to buy a yogurt business make sure you see all yogurt, frozen yogurt shops for sale throughout California that are currently on the market.

About the Author:  Peter Siegel, MBA is the Founder of (established 1994 - 7000+ California businesses for sale, 200 new listings daily) and the Director of the BizBen Network (16,000 business buyers, 4,000 small business owners, 1,800 California business brokers & agents). He consults daily with business buyers, business owners, small business advisors, business brokers and agents on selling and buying California small businesses. He is also the author of three books on the topic of how to buy and sell California small to mid-sized companies. For a FREE consultation on the best way to buy or sell a California business, phone Peter Siegel direct at 925-785-3118.

Categories: BizBen Blog Contributor, Buying A Business, How To Buy A Business

  Helpful Resources To Assist In Selling And Buying California Businesses
Michael Davidson, Business Broker - Southern California

Los Angeles Business Broker providing M&A quality services for Small Business Owners. We leverage our technology and expertise to Simplify & Expedite the Business Sales Process. Matching the right buyer with the right business is how we define success.

Shalonda Chappel: Escrow & Bulk Sale Services - Southern California

Escrow services to brokers/agents, sellers, & buyers. Established 43 years. Extraordinary service. Experienced with handling difficult transactions. One stop for all your escrow needs: Bulk sales, lien searches, UCC searches, liquor license transfers, publishing & recording services. 951-808-3972.

Steve Zimmerman: Restaurant Broker Specialist, California

Steve founded Restaurant Realty in 1996. He has personally sold/leased over 1000 restaurants, bars & clubs, & completed over 3000 valuations. The author of "Restaurant Dealmaker- An Insider's Trade Secrets For Buying a Restaurant, Bar or Club" available on Amazon. Reach Steve direct at 415-945-9701.

Cheryl Maloney, Business Brokerage Services: City Of San Francisco

I have over 20 years of small business experience, a law degree and well-versed in real estate regulations and best practices. I work tirelessly to create successful strategies & effective negotiations for those wishing to sell or buy a SF business. Call 415-309-2722 (Cell/Text).

Diane Boudreau-Tschetter: Escrow & Bulk Sale Services - CA

California Business Escrow, Inc. is a full service independent escrow company serving all of California and has expertise in a wide range of escrows. Our team prides itself on providing an exceptional escrow experience. For more info phone Diane Boudreau-Tschetter at 888-383-3331 or 209-838-1100.

Mike Nova, Business Broker: North Bay Restaurant, Retail Specialist

I have over 30 years of direct restaurant industry experience, including my personal experience as a restaurant owner. For the last 7 years I have worked as a Broker specializing in this challenging and ever changing field of restaurant and bar sales. Contact me at 510-708-6682 Cell.

AJ Rana - Business Broker, San Francisco Bay Area

Professionals who understand the importance of world class business brokerage service and the value it can create. Specializing in assisting sellers and buyers with retail stores, restaurants, hospitality & lodging, manufacturing operations, distribution companies, e-commerce and service businesses.

William Park, Business Broker: Southern California

Highest Volume Broker in California, Simply Check our HUNDREDS of Listings! Over 25 Associates, Speaking Dozen Languages, Helping Buyers and Sellers of Small Business since 1982, Centrally Located between Los Angeles and Orange Counties, while Riverside & San Bernardino Counties are Very Accessible.

  Related Articles, Events, Blog Posts, Discussions, Videos, Interviews
Buying A Pizza Restaurant, Pizzeria Tips: What Pizzeria Buyers Need To Know

Peter Siegel, MBA discusses buying pizza restaurant for sale tips and what to watch out for. Topics: Owner involvement in the business as pizzerias are most successful when the owner is onsite.

Financing The Purchase Of A Frozen Self-Serv Yogurt Shop - Tips For Buyers

Financing a frozen self-serv yogurt shop for can be challenging. Here, you'll learn the real scoop behind financing a yogurt shop purchase to help it be profitable from the start. Peter Siegel at

Don't Buy A Restaurant Without Checking The Competition - Key Buying Tips

Looking to buy a restaurant business? Check out these tips first to avoid getting blindsided when you buy any type of small or mid-sized California restaurant. Peter Siegel, MBA (BizBen's ProBuy & ProSell Programs & Restaurant Purchase Financing Expert) at 925-785-3118 covers this topic for buyers.

Restaurant And Fast Food Franchises - Successful Tips From Franchise Buyers

Restaurant franchise offerings are among the most popular of the business types potential business buyers seek. What many would-be owners don't realize is that there are specific tips for buying fast food or restaurant franchises that don't necessarily apply to independent restaurants for sale.

Top 100 List: This Week's Top Motivated Business Buyers & Their Requests!

If you're trying to sell a business - check out this week's top 100 business buyers - one of these buyers may be looking to buy your type and location of business! This list is updated weekly - make sure you check it frequently! Are you searching to buy - get on this list and reach seller direct!

What Is The Typical Business Broker Fee For Sellers And Buyers? Who Pays It?

Was just asked the question from a business owner what the "typical commission" amount is for a broker or agent and if upfront fees are common? Thought this might be a great Discussion topic on BizBen for both business owner/sellers and potentially for business buyers (buyer representation).

Buy A Business Or Start From Scratch? 5 Key Differences For Business Buyers

Some buyers believe it's better to start a business from scratch rather than buy an existing enterprise. While this may be good advice in some cases, usually it's not the best strategy. Here are five tips to help a buyer make the right decision from from Peter Siegel, MBA (BizBen Director).

Business Sellers: Do Not Make It Hard To Buy Your Small Business: Owner Tips

Successful sellers of small businesses need a game plan to sell their California small business for maximum price and for the best terms. Peter Siegel, MBA discusses these seller strategies with BizBen Blog readers based on his experience as the lead Advisor with the ProSell Program on

Escrow Services Diane Boudreau-Tschetter
Bill Ziprick Legal Advise
Joe Ranieri Orange County Business Broker
Inland Empire Area Business Broker Mani Singh
Vlogs and Podcasts
BizBen Blogs And Articles
BizBen ProSell Program
California Educational Events Buying And Selling Businesses
BizBen ProBuy Program
Advertise On BizBen
Instant Email Alerts On BizBen

BizBen - Where California Deals Get Done! 888-212-4747
7172 Regional Street #364 · Dublin, CA. 94568
BizBen · Copyright © 1994 - 2020, All Rights Reserved

Clost Login

Please confirm your registration by clicking the link we've sent to .

If you can't see it, please check your junk mail folder.

If you have any problems registering, or need assistance with your new BizBen User Account please phone BizBen Customer Support at 888-212-4747.

First Name:*
Last Name:*
Email Address:*
Confirm Email:*
Create Password:*
Confirm Password:*

You Are A:

Email Address:

500 New & Refreshed Detailed Postings Daily
Over 2500 Resources Available On BizBen
Since 1994. Where California Deals Get Done!
Restaurant And Fast Food Franchises - Successful Tips From Franchise Buy...
Read More News
Don't Buy A Restaurant Without Checking The Competition - Key Buying Tip...
Read More News