Convenience stores in NSW and VIC trade at 2.0× to 3.0× EBITDA — but the 5% rent rule is the first filter every buyer applies. If your occupancy cost exceeds 5% of revenue, the margin for error disappears and the business becomes very difficult to sell at any reasonable price. The multiple is almost irrelevant if the rent structure is wrong.
What the market is paying
| Business type | Typical multiple | Key driver |
|---|---|---|
| High rent (above 8% of revenue), thin margins | 1.0–1.5× EBITDA | Rent risk makes the business hard to underwrite |
| Moderate rent (5–8% of revenue), stable revenue | 1.5–2.0× EBITDA | Marginal — buyers will negotiate hard |
| Rent under 5% of revenue, good location, stable revenue | 2.0–2.5× EBITDA | Viable margin structure |
| Low rent, high-traffic location, fuel or tobacco anchor | 2.5–3.0× EBITDA | Premium location + strong margin structure |
The 5% rent rule
Convenience store margins are thin — typically 25–35% gross margin on a mix of tobacco, beverages, snacks, and impulse purchases. When rent exceeds 5% of revenue, the remaining margin after wages, utilities, and cost of goods is insufficient to service a loan and provide a reasonable return to the buyer. Buyers know this, and they apply the rent test before they look at anything else.
If your rent is above 5% of revenue, the most important thing you can do before going to market is negotiate a rent reduction with your landlord. A successful rent renegotiation can add significantly more to the sale price than any other preparation step.
Tobacco and fuel: the anchors
Convenience stores with tobacco sales and fuel have a structural advantage — these are high-frequency, high-value purchases that drive foot traffic and basket size. Buyers will pay a premium for a convenience store with a fuel component, because the fuel revenue provides a volume anchor that supports the overall business.
Lease terms
A long-term lease with options to renew is essential. Buyers will not pay a meaningful price for a convenience store with less than three years remaining on the lease and no option to renew. The lease is the foundation of the business — without security of tenure, there is no business to buy.
NSW and VIC: where the deals happen
Western Sydney (Parramatta, Blacktown, Liverpool), the Central Coast, and Melbourne's outer suburbs are the primary markets for convenience store sales. Buyers include existing operators, migrant entrepreneurs with retail experience, and private equity-backed convenience store chains looking to acquire independent operators.
