Buyer's Guide · Convenience Stores
What's a fair price for a convenience store?
Most independent convenience stores sell for 2.0× to 3.5× SDE, the owner's real take-home earnings, with branded franchise stores that have a strong prepared-food program reaching 2.5× to 4.0×, and inventory (usually $15,000 to $40,000) added on top. So an independent store with $150,000 of SDE is worth roughly $300,000 to $525,000. Where it lands comes down to the lease, the location, the product mix, and whether a franchise agreement transfers to you.
It's priced on SDE, not revenue
A convenience store is valued on a multiple of SDE: seller's discretionary earnings, the real take-home for a single owner-operator. That's net profit plus the owner's salary and any personal or one-time expenses run through the business. Revenue is the wrong yardstick. Two stores with the same sales can take home wildly different amounts depending on margin and rent.
New to SDE, or unsure whether your deal should use SDE or EBITDA? EBITDA vs SDE, explained →
The formula
Fair price ≈ SDE × multiple (2.0 to 4.0) + inventory
2.0 to 3.5× for independents · 2.5 to 4.0× for strong franchises · inventory ($15K to $40K) verified at closing
What moves the multiple up or down
Pushes toward 4.0×
- A high-traffic or corner location
- A long lease (10+ years remaining)
- A strong prepared-food program
- A branded franchise with a transferable agreement
- A loyal, repeat customer base
- Modern, well-maintained equipment
Pushes toward 2.0×
- A declining neighborhood or rising competition
- A short lease (under 3 years)
- Over-reliance on one category (e.g. 60%+ from tobacco)
- No prepared-food offering
- Aging equipment
- A non-assignable franchise agreement
A worked example
Say an independent store's books, after adding back the owner's salary and a few one-time costs, show $150,000 of SDE. At 2.0 to 3.5×, that's a $300,000 to $525,000 business. Add about $30,000 of inventory at closing, and you're looking at roughly $330,000 to $555,000.
Now suppose it's a branded franchise with a busy prepared-food counter and a loyal lunch crowd. That can justify the upper 2.5 to 4.0× band, but only if the franchise agreement actually transfers and the prepared-food revenue is real and verifiable.
If the seller is asking well above that range, it's not automatically a “no.” But the location, lease, and product mix had better justify it, and if they can't, you've just found your negotiating room.
Sanity-check the P&L against these benchmarks
| COGS (merchandise) | 65 to 75% of revenue |
|---|---|
| Overall gross margin | 25 to 35% (no low-margin fuel to drag it down) |
| Rent / lease | 5 to 10% of revenue |
| Labor (excluding you) | 8 to 15% of revenue |
| Utilities | 2 to 4% of revenue |
| Shrinkage / theft | 1 to 3% of revenue |
| EBITDA | 8 to 15% of revenue |
A P&L far outside these ranges doesn't automatically mean fraud, but it means you ask why. Either the situation is genuinely unusual, or the numbers have been massaged. Not sure how to walk a P&L line by line? How to read a P&L when buying a business →
The franchise-fee trap
The most common c-store valuation mistake: assuming the franchise fee is a percentage of revenue. It isn't. Branded c-store royalties (7-Eleven, Circle K, and the like) are charged on gross profit (revenue minus COGS). For a store doing $1.5M in revenue at a 28% margin, that gross profit is about $420,000, and a 7% royalty on it is roughly $29,000 a year: a real, recurring cost that has to be on the P&L before you value anything. If it's a branded store and there's no royalty line, the earnings are overstated.
Red flags that quietly wreck the valuation
- A franchise fee that doesn't appear on the P&L. Branded c-store royalties are charged on gross profit, not revenue. A 7-Eleven or Circle K store with no royalty line is hiding a real, recurring cost.
- Revenue that leans on one category. A store with 60%+ of sales from tobacco is one tax hike or regulation away from a very different business.
- Shrinkage that's suspiciously low or missing. Theft and spoilage are real for c-stores; a P&L showing none has been cleaned up.
- A short, expiring, or non-assignable lease. For a store with no land, the lease IS the business.
- Prepared-food revenue claimed but no matching equipment, labor, or supplier costs to support it.
- Suspiciously round, identical revenue every single month.
Want this done automatically for your deal?
Everything above is the manual version. Upload the seller's P&L, tax returns, and bank statements, and BizScore computes the real SDE, applies the right multiple, checks for the franchise fee, compares it to the asking price, and flags every red flag on this page, each backed by the exact document it came from.
Frequently asked
- What multiple do convenience stores sell for?
- Independent convenience stores typically sell for 2.0× to 3.5× SDE (seller's discretionary earnings), with branded franchise stores that have a strong prepared-food program reaching 2.5× to 4.0×. Inventory is added separately on top.
- Why do convenience stores have higher margins than gas stations?
- Because there's no low-margin fuel dragging the average down. A standalone c-store's overall gross margin typically runs 25 to 35%, versus a gas station where thin fuel margins pull the blended number much lower. Prepared food (50 to 65% margin) lifts it further.
- Does inventory come on top of the purchase price?
- Usually yes. Merchandise inventory (typically $15,000 to $40,000 for a convenience store) is counted separately and verified at closing, not weeks before. C-store inventory also turns over faster than a gas station's inside sales.
- How are convenience store franchise fees calculated?
- By a percentage of gross profit (revenue minus COGS), NOT gross revenue, a common and costly point of confusion. For a store with $420,000 of gross profit, a 7% royalty is about $29,000 a year. Always confirm the royalty is on the P&L before you value the deal.
About this guide
BizScore is built by first-time business buyers — people who watched someone close to them lose their life savings on a deal that looked clean on a spreadsheet and fell apart in the documents the seller never volunteered. That experience is why these guides exist, and why every BizScore report cites the exact document behind each finding.
Where the numbers come from: the benchmark ranges in our guides — SDE multiples, expense ratios, typical timelines — are widely-used industry rules of thumb, cross-checked against the analytical benchmarks BizScore applies inside its reports. Dollar figures such as a ~$15,000 quality-of-earnings review or a $5,000 deal attorney are representative of what buyers typically pay, not quotes; actual costs and multiples vary by deal. We review these figures periodically — last updated June 2026.
BizScore is an information service — think of it as a Carfax for a small business — not a CPA, an attorney, or financial advice. Use it to decide where to spend your professional dollars, and bring in a qualified professional before you sign anything.
This guide is general education, not a formal business appraisal or financial, legal, or tax advice. Every deal is different. Verify against the actual documents and talk to a qualified professional before you sign anything.