Scooping Value: How to Assess Gelato, Sorbet, and Ice Cream Retailers

Australia’s love affair with frozen desserts is strong—but selling a gelato or ice cream business isn’t always a sweet deal. Whether you’re preparing to sell or buying into the sector, here’s what the numbers (and market realities) say.

Valuation Multiples: Reality vs. Aspiration

In today’s market, most frozen dessert outlets trade between:

1.8–2.3× SDE (for owner-operated, sub-$500k revenue)

2.5–3.0× EBITDA (for sub-$1m outlets)

3.0–3.5× EBITDA (for stable, multi-site or branded plays with year-round trade)

But beware: these are upper bounds. Multiples closer to 1.5–2.0× SDE are common when:

Lease terms are short or unfavorable

Locations are seasonal (e.g., beaches, holiday precincts)

Franchises impose fees and restrictions

Malls take an additional 4–8% of gross revenue as "turnover rent"

Franchisees in malls often face the double hit: royalty fees from the franchisor and revenue-share rent from the landlord. This erodes net earnings, limiting what a buyer will pay.

ROI: What Buyers Actually Expect

Serious buyers look for:

30–50% annual return on equity in small business investments

Payback periods of 2–4 years

A multiple discount to reflect buyer risk, transition cost, and capital outlay

That’s why even a business doing $150k SDE may only sell for $250k–$300k: the buyer wants room to de-risk the purchase, manage the handover, and still achieve an attractive yield.

Probability of Sale: The Tough Numbers

From current listing data and broker commentary:

>60% of listed gelato/ice cream shops don’t sell in the first 12 months

Median time on market is 7–9 months

Listings spike after summer, suggesting many operators wait for peak season numbers to boost sale appeal

Businesses with solid leases, documented year-round trade (think suburban strips, malls with good footfall), and clean books fare better. Still, price realism is the #1 sale driver.

Key Advice for Sellers

To maximise value:

Lock in longer lease terms with assignability

Normalize margins by trimming unnecessary staff hours or wastage

Have clear P&L statements with 2+ years of full financials

Package your sale with forward projections (ideally post-summer season)

Final Scoop

Buyers don’t just buy profit—they buy predictable, transferable, and understandable profit. If your business is seasonal, franchise-bound, or mall-tied, expect sharper buyer questions and leaner offers. If your store is suburban, stable, and documented—you're in the top 20% of sale-ready assets.