Illustrative example: a two-location family firm split between two buyers

The best single offer for this firm would have closed one of its two funeral homes. The family took a harder route and sold each location to a different buyer. This is an illustrative composite, not a real client deal: the family, both locations, and all figures are invented from patterns we see in multi-location sales, and the region, rural New England, is the only setting detail.

The owner is 67 and runs both locations through one S corporation. The main location sits in a small regional center and handles 340 calls a year. The branch, about 25 miles away in a farm town, handles 110. A licensed director has managed the branch for eleven years. The branch’s own preparation room closed long ago, so its embalming is done at the main location.

How did each location perform on its own?

Very differently, which is why the split worked. Separating the books took six weeks, because the firm had always reported one combined profit statement.

Above both locations sat $419,500 of shared overhead: the owner’s $185,000 salary, a $78,000 office and bookkeeping function, $52,000 of insurance, software and phones, general expenses, a shared removal van, and $16,500 of personal items. Combined, the firm reported $479,070 of earnings before depreciation and interest, a 17.6% margin.

What overhead did each buyer have to replace?

Each buyer priced its location as if the shared office no longer existed, because after closing it would not. That meant rebuilding overhead from scratch, not allocating the old bill.

The branch figure is seller’s discretionary earnings, because its buyer would run it himself. See our SDE definition for why the owner’s pay is added back for an owner-operator but not for an absentee buyer.

What was each location worth?

The main location supported about $2.37 million to $2.83 million and the branch about $608,000 to $795,000, both on assumed multiples. Buildings were appraised separately.

We know of no neutral published survey of funeral home multiples. The only verified figure we cite is Carriage Services’ 7x to 9x EBITDA guidance, from its Q4 2025 earnings call, for its own planned deals. The bands below are assumptions for this illustration.

The single buyer, a regional group, planned to close the branch and move its calls to a funeral home it already owned nearby. Funeral Director Daily’s 2025 business story of the year describes how actively regional groups like this have been buying. Its plan made the branch worth little to it.

The split produced $3,317,500 for the two businesses, $367,500 more. Subtract $38,000 of extra legal and accounting work and a $45,000 repair credit on the branch building, and the gain was about $284,500, at the cost of roughly four extra months.

How did the family separate what the locations shared?

With a written plan for every shared item, agreed in both letters of intent before either buyer started diligence.

1. Preneed: 388 contracts were sorted by the location named on each. The main location took 291 contracts with $1,310,000 of funding, and the branch took 97 with $402,000. Each book went through The Preneed Reconciliation Ladder on its own, which found the branch’s $17,500 shortfall.
2. Embalming: a three-year services agreement at $425 a case, with the main location’s buyer obliged to serve the branch.
3. The family name: the regional group bought the trade name; the branch received a perpetual, written license to use it at its address.
4. Staff: the office manager and the shared van went with the main location; branch staff stayed with the branch.
5. Phones and website: each location kept its own number, and the shared site was split into two before closing.

The family checked the name and staff terms against The Legacy Terms Ledger, so each was written into the purchase agreement with a stated duration.

How did the branch buyer finance his purchase?

With an SBA 7(a) loan and at least $106,750 of his own cash, 10% of the $1,067,500 price. SBA measures that minimum against total project cost, so his closing costs added a little more. His path fits the profile on our licensed director buying a first firm page.

Several rules in SBA SOP 50 10 8.1 shaped his deal. The lender ordered a business valuation from a credentialed appraiser and a separate real estate appraisal. Funeral homes are listed as an environmentally sensitive industry “unless no embalming or cremation at the Property,” and because the branch once had a working preparation room, the lender required a Phase I environmental review. A quality of earnings review was not required, because the price was under $3 million.

What risks did running two deals at once create?

Mostly the risk that one buyer would close and the other would not, leaving the family with a lone branch and no embalming arrangement. Three choices kept that risk small.

First, each purchase agreement was conditioned on the other closing, with a 30-day window to substitute a buyer if one fell through. Second, both closings were set for the same date, so the services agreement and name license took effect at once. Third, the branch manager signed a confidentiality agreement and a no-hire clause before he saw the main location’s numbers, because as a buyer he had become a party across the table from his own employer.

The branch building also needed a roof and a new boiler. Rather than fix them before the sale, the family gave a $45,000 credit against the building price, supported by two contractor bids, which kept the SBA appraisal and the closing date on schedule.

What did the family keep from the two sales?

About $3,212,978, or 66.7% of the $4,817,500 combined price, after debt, costs, and estimated taxes. Rates below are assumptions; your CPA must model your actual facts.

Both sales were asset purchases, so each buyer and the seller filed allocations under the IRS instructions for Form 8594. The IRS capital gains topic sets 20% as the top federal rate on long-term gain and 25% on unrecaptured section 1250 gain from building depreciation. We assumed 37% on ordinary income and a flat 5.5% state rate.

Ordinary income came from equipment recapture ($195,000) and the two non-competes ($75,000). Test your own numbers with the seller net proceeds calculator, and see taxes on selling a funeral home for how allocation choices shift the bill.

What does this split teach owners of more than one location?

Value often hides in the location a single buyer does not want. Finding it requires books that show each location’s profit and a plan for everything they share.

Owners usually learn this late, after the first offer arrives. Building location-level statements and pricing each location’s standalone overhead a year before going to market would have saved this family six weeks and given it leverage with the first bidder. Our page on selling one of several locations covers the timing questions, and our valuation hub sets out the wider method.