Martial arts schools in Illinois — dojos, MMA gyms, Brazilian jiu-jitsu academies — are valued at 2x to 4x SDE with higher multiples for franchise concepts (ATA, Tiger Rock, Gracie) and lower multiples for owner-instructor-dependent independents. Tuition contract revenue is the primary value driver.
Student Count and Contracts
Active student enrollment under multi-month tuition contracts is the core asset of a martial arts school. Buyers evaluate active count, average monthly tuition, contract length, and attrition. A school with 200 students on 12-month auto-pay contracts is worth far more than one with 200 students on month-to-month memberships, even if monthly revenue is identical.
Instructor Certification and Brand
The selling owner's rank, lineage, and personal reputation matter differently depending on the discipline. For BJJ academies affiliated with a recognized lineage or for karate schools in branded systems, the instructor's credentials transfer value. For independent schools, the brand needs to be built on the school's name and culture rather than the individual instructor.
Summer camps, after-school programs, and birthday party revenue provide ancillary income that adds stability to the core tuition revenue and makes the business more attractive to a broader buyer pool.
Recast Seller’s Discretionary Earnings, then apply a planning multiple for this Illinois business. Replacement labor is subtracted. This is a planning tool, not an appraisal.
Before debt, working-capital peg, holdback, and tax. Educational only.
How Illinois buyers put a number on how to value a martial arts studio
This page is the valuation guide. It is not the sale-process playbook. Seller’s discretionary earnings (SDE) is the cash a full-time working owner can take after you normalize the books. Start with the tax return. Add owner pay and one-time costs. Subtract the wage you must pay to replace the owner.
SDE line items buyers actually use
- Reported net profit (tax return, not the marketing P&L)
- + Interest expense
- + Income taxes (not payroll, sales, or property tax)
- + Depreciation and amortization
- + Owner W-2, bonuses, and payroll taxes on the owner
- + Discretionary owner benefits that a buyer will not keep (auto, personal travel, family on payroll with no role)
- + Accepted one-time or non-recurring expenses
- − Market-rate replacement labor for owner work that will not transfer
- = Seller’s Discretionary Earnings (SDE)
Documents to gather this week
- Three years of signed business tax returns and matching P&Ls
- Year-to-date P&L, balance sheet, and three months of bank statements
- Current lease, amendments, and a plain-English remaining term
- License and permit list, including who holds each card
- Top-customer concentration (names redacted until an NDA)
A simple Illinois close calendar
Plan six to twelve months from cleanup to close on a prepared Main Street deal. Start CBS-1 and any Chicago or Cook notices at letter-of-intent, not the week of funding. Landlord consent often takes longer than the lender.
Related pages on this site
Educational only — not legal, tax, or a formal appraisal. Confirm bulk-sale notices, licenses, and tax allocation with counsel and a CPA.
Questions
No. This is education and planning math. A professional opinion of value is a confidential conversation. We work on a success fee if you engage a sale process. There is no file-upload portal.
Start with adjusted seller’s discretionary earnings, then a vertical planning band. A marketplace average is context, not your quote.
Personal professional licenses do not transfer. Municipal registrations and state notices have their own calendars. Confirm the path before you grant exclusivity.
Most prepared Main Street sales take about six to twelve months from cleanup to close. License transfers, landlord consent, and SBA underwriting add weeks.
CBS-1 is the Illinois bulk-sale notice. File it at least ten business days before an asset transfer that meets the statute. Late filing can put Illinois tax risk on the buyer.