⚠️ Red Flag Case Study: Strong on Paper, Weak on Infrastructure

~ Certified Business Appraiser

This boutique gym priced at $795K based on $215K SDE.

But: ❌ 72% of clients joined after a Groupon campaign
❌ Owner taught 80% of classes—no replacements lined up
❌ No CapEx for equipment or software
❌ Addbacks included personal training certifications + phone

Adjusted cash flow: ~$110K
Final valuation: ~$435K

📌 Valuing sweat equity without infrastructure? That’s a workout in risk.