Lower margins, higher price… and that’s the problem.
This FedEx Ground route portfolio is listed at $1.6M, generating about $1.85M in revenue and $460K in cash flow.
It’s also semi-absentee with a manager and drivers already in place.
At first glance, that sounds like a clean, scalable operation.
But once you break it down, the math doesn’t line up.
Deal Snapshot
Let’s run it through a standard SBA-style scenario.
Financing Overview
After debt, you’re left with about $223K per year.
That’s decent — but not what you’d expect at this size.
Where This Starts to Break
The margin is the first warning sign.
- Low margin: ~25% vs ~49% industry average.
- Operational drag: Likely from management + driver structure.
- Less efficiency: More overhead, less profit per dollar of revenue.
Even if the absentee setup explains part of it, that’s still a big gap.
The Real Problem
You’re paying a premium for a weaker business.
- Massively overpriced: 3.48x vs ~1.13x industry average.
- High revenue multiple: 0.87x vs ~0.55x.
- Below-average margin: Yet priced above market.
- No compensation: Returns don’t justify the premium.
This is the worst combination you can get.
Why This Happens
Route businesses often get mispriced.
Buyers see:
- Big revenue
- Established systems
- “Semi-absentee” setup
And assume it deserves a premium.
But routes are operationally heavy, margin-sensitive, and dependent on contracts you don’t fully control.
They rarely justify high multiples.
Risk Profile
This deal carries more risk than it looks.
- Contract dependency: FedEx controls terms and structure.
- Labor reliance: Drivers are critical to operations.
- Higher default rate: ~4.9% vs ~3.6% overall.
- Thin margin buffer: Lower profitability increases sensitivity.
You don’t have as much control as you think.
What This Really Is
This is a mismatch.
- Average business
- Below-average margins
- Above-average price
That’s not a deal — that’s a setup for disappointment.
BizHub Verdict
This deal scores a 5.1 / 10.
Not because the business is bad — but because the pricing completely disconnects from reality.
You’re paying more… for less.
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