Commercial Kitchen Hood Cleaning and Fire Safety Compliance Business
This deal analysis centers on a niche commercial services company specializing in kitchen exhaust hood cleaning, fire suppression system inspection, grease duct maintenance, and NFPA 96 compliance certifications. Operating for 18 years, the company services restaurants, cafeterias, food halls, food trucks, stadium vendors, school kitchens, and commissary operators throughout a major metropolitan area and its outlying counties.
The company has a deep roster of clients on recurring service contracts, averaging 2 to 4 cleanings per year per customer based on local fire codes. It also performs mandated fire suppression inspections and offers add-on services such as grease containment system upgrades, rooftop hinge kits, access panel installation, and compliance audits.
Annual revenue is $2.8 million with $610,000 in adjusted EBITDA. More than 80% of revenue is recurring, tied to compliance-mandated cleanings and inspections. The company has a strong reputation with local fire marshals, facilities managers, and multi-unit restaurant groups, positioning it as a reliable and sticky vendor in an otherwise fragmented industry.
This business is an ideal SBA 7(a) acquisition candidate due to its low customer churn, contracted services, asset-light model, and regulatory-driven demand. However, execution depends heavily on technician licensing, NFPA 96 familiarity, and route optimization—requiring strategic diligence and structured handover.
SBA 7(a) Transaction Structure
Given its cash flow profile and strong recurring revenue, the deal could be structured as follows:
Purchase Price: $2.3 million (3.77x EBITDA)
SBA Loan: $1.725 million (75%)
Buyer Equity Injection: $230,000 (10%)
Seller Financing (Subordinated): $345,000 (15%), amortized over 5 years with 12-month interest-only, linked to revenue continuity
Clawbacks and performance-linked provisions in the seller note:
20% clawback if client churn exceeds 15% within the first 120 days post-close
15% reduction if fire suppression licensing is not transferred within 90 days, impairing inspection revenue
Bonus payment of 10% if the buyer lands three or more new school or municipal clients within 12 months with seller’s referral support
Seller should remain on a consulting contract for 6–12 months to support licensing continuity, technician training, and key customer transitions.
Client Base and Revenue Breakdown
The business services over 500 commercial kitchen clients, including:
Restaurant groups (multi-location): 38%
Independent restaurants: 23%
Schools and universities: 14%
Healthcare, assisted living, commissaries: 15%
Government/city facilities and stadiums: 10%
Revenue streams include:
Hood and duct cleaning (required quarterly or semi-annually): $1.55M
Fire suppression inspection (bi-annual): $450K
Compliance reports and certifications: $200K
Grease containment upgrades, hinge kits, rooftop access: $300K
Emergency cleanings, repairs, grease abatement: $300K
Customers are billed per service or on quarterly invoices, with the top 50 clients generating 61% of revenue. No single customer represents more than 6%.
Client retention is over 87% year over year. All suppression inspection work is regulated by state fire marshal rules, and reports are filed digitally with AHJs (authorities having jurisdiction).
Technician and Licensing Requirements
The company employs:
4 field crews (2-person: tech + assistant)
1 fire suppression licensed technician
1 scheduler/dispatcher
1 general manager
1 part-time bookkeeper
Each crew services 4–6 clients per night (work is done between 10 PM and 6 AM). The suppression tech handles daytime inspection and compliance work.
Technicians must be trained on:
OSHA ladder safety
Rooftop access and ventilation clearance
Kitchen fire suppression systems (Ansul, Kidde, etc.)
NFPA 96 and local code variations
Digital reporting for inspection logs and before/after photos
Post-close, the buyer should:
Immediately sponsor at least one apprentice for fire suppression licensing
Retain the licensed tech on a bonus or long-term contract
Introduce tracking dashboards for compliance deadlines and re-inspection intervals
Cross-train assistants for tech lead roles
Route Management and Scheduling
Night crews operate with geographic route grouping and use an in-house built scheduling calendar. Each crew covers 20–25 clients per week, clustered for mileage efficiency and AHJ grouping.
Buyers should implement:
Digital CRM like FieldAware or Housecall Pro
Optimized scheduling based on prior service intervals
Auto-reminder systems for clients via SMS and email for upcoming inspections
“Red zone” alerts for missed cleanings approaching city fine windows
Financial Overview
Trailing twelve-month financials:
Revenue: $2.8M
COGS (labor, tools, chemicals): $1.42M
Gross Profit: $1.38M
SG&A: $770K
Adjusted EBITDA: $610K (21.8%)
AR is well-managed; most services are paid within 15–20 days of invoice. Some government contracts pay on net-45 or net-60, but they are reliable. Deferred revenue exists for some annual prepaid contracts.
Sales and Marketing
The company spends just $1,000/month on marketing.
Most new customers come from:
Health inspector referrals
Fire marshal compliance handouts
Restaurant industry networking groups
Word-of-mouth among property managers
Growth levers include:
Hiring a part-time BDR focused on stadiums, hospital kitchens, and universities
SEO targeting “hood cleaning + [city]” and “fire suppression inspection”
Offering white-labeled reporting portals for multi-location restaurant clients
Partnering with HVAC or fire protection firms for referral arrangements
Assets and Equipment
5 branded vans/trucks with rooftop access gear and water tanks
Power washers, vacuums, chemical sprayers, ladders, rooftop winches
Mobile tablets for field reporting
Facility: 3,200 sq ft leased warehouse with chemical storage and washout bays ($3,200/month gross)
CapEx needs in year one:
1 vehicle replacement: $45K
Tablet upgrades: $8K
Licensing and training reserve: $12K
Fire extinguisher recharge station upgrade (optional): $15K
Compliance and Risk Management
The company is in full compliance with:
NFPA 96 reporting standards
OSHA and local safety rules
EPA disposal protocols for grease and wastewater
DOT compliance for vehicle fleet
Insurance coverage:
$2M GL
$1M auto
$1M umbrella
$1M pollution liability (due to chemical use and disposal)
No outstanding legal claims or customer disputes.
Working Capital Needs
Payroll buffer: $60K
Licensing and training: $10K–$15K
Vehicle repairs and route optimization: $20K–$30K
CRM and scheduling software: $10K–$15K
Seller consulting contract: $25K–$30K
Ideal Buyer Profiles
B2B service operators looking to add compliance-driven revenue
Safety/fire services firms (alarm, suppression, security) expanding service stack
Entrepreneurs with facilities or janitorial background
Investors seeking sticky, contract-backed, recession-resilient businesses
Post-Close Execution Plan
Assign client contracts and notify all government agencies of vendor continuity
Retain licensed fire suppression techs and begin cross-training
Launch outbound calls to health departments and restaurant groups
Implement CRM with automated reminders for clients and staff
Evaluate regional expansion into adjacent counties with shared AHJs
Conclusion
This commercial kitchen compliance business presents a unique opportunity to acquire a service provider with built-in recurring revenue, municipal contract stability, and a deeply embedded reputation. SBA 7(a) financing enables a low-cash acquisition, and with seller support and technician retention, buyers can unlock steady cash flow and scale via licensing expansion, scheduling optimization, and proactive regulatory partnerships. It’s a highly defensible niche for buyers who value process rigor and contract longevity.
