Route value calculator
A route sells on a multiple of monthly gross. That multiple is a market convention, not a law, and two routes with identical revenue can be worth very different money once churn and drive distance are in the picture.
Brokers quote a multiple of monthly gross. What that multiple is worth depends entirely on churn and density — this shows both adjustments separately so you can argue about them.
Route is worth about
$97,390
- Monthly gross
- $9,300
- Base at 11×
- $102,300
- Churn adjustment
- $-4,910
- Density adjustment
- $0
- Price per stop
- $1,623
- Months of gross to repay
- 10.5
The multiple is an input, not a fact: it is whatever your market is trading at this quarter. Ask two brokers and a seller before you accept one.
Why a multiple at all
Nobody buys the pools; they buy the invoices that keep arriving. A multiple of monthly gross is a rough proxy for how long those invoices keep arriving after the seller stops answering the phone. That is why churn hits the value so hard: at 30% annual churn you are buying a third fewer stops than the spreadsheet shows, eighteen months out.
How to use it
- Enter the number of stops and the average monthly bill, both taken from the seller’s billing records rather than the listing. Check the average against the going rates owners pay.
- Enter the multiple the broker or seller is asking, as a multiple of monthly gross.
- Enter annual churn (accounts lost per year as a percentage of the book) and the average miles between stops.
- Add the equipment at what you would pay for it used, then read the value, the price per stop and how many months of gross it takes to repay.
Worked example
A 40-stop route billing $140 a month on average, offered at 10× monthly gross, with 25% annual churn, stops 1.8 miles apart and $6,000 of equipment included:
| Step | Working | Result |
|---|---|---|
| Monthly gross | 40 × $140 | $5,600 |
| Base at 10× | $5,600 × 10 | $56,000 |
| Churn adjustment | (25 − 10) × 0.6% = −9% of base | −$5,040 |
| Density adjustment | 1.8 mi is under 2 mi: +8% of base | +$4,480 |
| Equipment | as entered | +$6,000 |
| Route value | 56,000 − 5,040 + 4,480 + 6,000 | $61,440 |
| Price per stop | $61,440 ÷ 40 | $1,536 |
| Months of gross to repay | $61,440 ÷ $5,600 | 11 |
Here the tight routing roughly cancels the churn. Spread the same stops 5 miles apart and the density line flips to −$5,600.
The two adjustments, in the open
| Factor | Trigger | Effect on the base |
|---|---|---|
| Churn | Every point above 10% a year | −0.6% per point |
| Tight density | 2 miles or less between stops | +8% |
| Loose density | 5 miles or more between stops | −10% |
| Equipment | Truck, poles, vac included | added at cost you enter |
These are the calculator’s stated rules, not a published index. They are here so you can argue with them rather than with a black box.
Ask for the cancellations, not the customers
Any seller can print a customer list. Ask instead for twenty-four months of billing so you can count the accounts that stopped. That number is the whole valuation.
Before you sign
Ride the route for a week, price a sample of the stops with the pricing calculator, and check whether the current bills would even be profitable at your cost base. A cheap route full of under-priced accounts is not a bargain — it is a repricing project with a churn cliff at the end of it. The diligence checklist has the rest.