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Questions from a prospective buyer (again...)
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<blockquote data-quote="p28006" data-source="post: 1363660" data-attributes="member: 54205"><p>Hello All!</p><p></p><p>First time poster here. I have been reading several threads from people asking questions about buying FedEx routes. I too am considering purchasing a route. I have spoken to a broker who specializes in selling routes in my area and he has given me a P & L sheet on a HD route he has listed for sale. It is an urban route in a very affluent area that comes with one older P500 that supposedly had the engine rebuilt last year. He says it is in need of a second vehicle/driver as it is pushing nearly 200 - 210 deliveries on some days. Gross income, excluding any bonus, averages $2,600/wk. I do not have current driving experience on a similar vehicle, but do have experience driving a similar vehicle many years ago. Broker says that he will have no problem getting my approved to drive. I want to drive the route so that I can be profitable and to get to know the business from the ground up as I hope to expand in the future. The route I am considering is owned by a Contractor who owns multiple routes and is consolidating his business into a new terminal that is to be opening next year and does not want routes running out of two terminals. I am going to go out on the route next week and have yet to see the financials other than the P&L Sheet.</p><p></p><p>My questions are:</p><p></p><p>1) What is a good rule of thumb on the value of this route (I have read 1.5 - 2x Net)?</p><p>2) Is the broker blowing smoke when he says he can get me approved to drive?</p><p>3) Is running a supplement on this route cost effective or just a drain on profitability?</p><p>4) Am I at a disadvantage being a one-route contractor in today's environment?</p><p>5) What other questions should I be asking (other than why not invest in real estate, etc...)?</p><p></p><p>Any constructive input from those in the business would be greatly appreciated.</p><p></p><p>Thanks in advance!</p></blockquote><p></p>
[QUOTE="p28006, post: 1363660, member: 54205"] Hello All! First time poster here. I have been reading several threads from people asking questions about buying FedEx routes. I too am considering purchasing a route. I have spoken to a broker who specializes in selling routes in my area and he has given me a P & L sheet on a HD route he has listed for sale. It is an urban route in a very affluent area that comes with one older P500 that supposedly had the engine rebuilt last year. He says it is in need of a second vehicle/driver as it is pushing nearly 200 - 210 deliveries on some days. Gross income, excluding any bonus, averages $2,600/wk. I do not have current driving experience on a similar vehicle, but do have experience driving a similar vehicle many years ago. Broker says that he will have no problem getting my approved to drive. I want to drive the route so that I can be profitable and to get to know the business from the ground up as I hope to expand in the future. The route I am considering is owned by a Contractor who owns multiple routes and is consolidating his business into a new terminal that is to be opening next year and does not want routes running out of two terminals. I am going to go out on the route next week and have yet to see the financials other than the P&L Sheet. My questions are: 1) What is a good rule of thumb on the value of this route (I have read 1.5 - 2x Net)? 2) Is the broker blowing smoke when he says he can get me approved to drive? 3) Is running a supplement on this route cost effective or just a drain on profitability? 4) Am I at a disadvantage being a one-route contractor in today's environment? 5) What other questions should I be asking (other than why not invest in real estate, etc...)? Any constructive input from those in the business would be greatly appreciated. Thanks in advance! [/QUOTE]
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