Private equity pays for much larger businesses (>10M up to 50M) up to 6xEBITDA (debt-free), if depreciation isn't too much.
At 14k operating income that's 84k. But that's unfairly high because you are sitting on land for free (cf. below).
Land value should be assessed separately. Assuming it's 100k, you're looking at max. 190k price. The land value however could just as easy be half that.
In any case I wouldn't buy the land but rent instead, and for a correct valuation deduct the rental price from the operating income. Assuming that a decent rent (6%) needs to paid, that's 6k per year. So the actual value of the business is more around 30k-50k, which probably equals liquidation value or even less (oops).
In addition like others said, you need multiple years revenue and a recent balance sheet. The ice cream machines for example seem to be valued too high in the books, owner claims less than 10% depreciation vs. new value while one machine is 12 years old, the other two 2+.
Then consider strategy: what's stopping anyone else in opening an ice cream business right next door to you?
A few other observations:
* Do salaries include owner salary?
* I don't understand why the land isn't used the other six months. In my street there is an ice cream business (small shop) that converts to a winter-meal take-out outlet in winter.
* What is the average price and volume here? It doesn't seem that high. Assuming 2$ and 150 days a year open, they sell 320 portions a day. Can it be increased?
Apologies if I sound too strong here, but asking price seems delusional and I wouldn't even want to negotiate with someone that far out the ballpark.
[Edit] Realize you are basically buying land which incidentally has a small ice cream business in the proposed offer.