Auto-Lab
Date of Incorporation: April 2, 2004
Franchising Since: June 2004
Address: Michigan
Description: Auto-Lab franchise Management Corporation grants franchises for the operation of a business offering automotive and engine diagnostics, electrical system repair, air conditioning repair, engine repair and other automotive related repair and maintenance services.
Franchise Offer:
i) Single-unit franchises that open a new automotive repair facility using the system at a single location.
ii) Option to convert an existing automotive repair facility to a single-unit franchise using the System ("Conversion").
iii) Master Franchises to Master Franchisees, who will develop, operate and recruit franchisees to develop Auto-Lab stores within a geographic region.
Financial Assistance: Auto-Lab does not offer direct or indirect financing and does not guarantee note, lease or other obligation.
Training and Assistance: 4-week course of instruction at a designated location that will cover all operating phases of the franchised business. Auto-Lab will administer the training program at its home office and/or at an Auto-Lab location. Generally, the curriculum includes general business procedures, advertising and promotion, nature of the franchise business and effective methods and techniques for servicing customers. Auto-Lab will not charge for the initial training program apart from the initial franchise fee.
Territory: Auto-Lab grants the right to operate one franchise location at a site approved by them in a designated area, which will generally be approximately 3 miles in radius, depending upon the demographics of the region. Auto-Lab will not operate stores or grant franchises to other "Auto-Lab" franchisees, in the Designated Area.
Franchise Term and Renewal: The term of franchise is 15 years. If in good standing, the franchisee can renew for an additional 15 year period.
Obligations and Restrictions: The franchisee does not have to personally supervise the franchised business. But the business must be directly supervised "on-premises" by a manager who has successfully completed the training program.
Total Number of Units: 29 franchised units at the end of the year 2006.
Financial Statements: Net income of $18,439 for the year ended 2007.
Investment Table:
Initial Investment:
| Name of Fee | Low | High |
|---|---|---|
| Initial Franchise Fee | $25,000 | $25,000 |
| Equipment | $60,000 | $119,000 |
| Inventory | $2,500 | $5,000 |
| Leasehold Improvements | $5,000 | $40,000 |
| Training Expenses | $2,000 | $5,000 |
| Pre-Opening Expenses | $3,000 | $20,000 |
| Real Estate Costs (3 months) | $0 | $24,000 |
| Additional Funds | $10,000 | $50,000 |
| Insurance (3 months) | $2,500 | $3,000 |
| Total | $110,000 | $291,000 |
Ongoing Fees:
| Name of Fee | Amount |
|---|---|
| Royalty | 7% on weekly Gross Sales. The franchisor permits a 1% Royalty discount if paid timely. |
| Advertising | Up to 3% of weekly Gross Sales |
| Yellow Pages | $800-1900 per month |
| Local Advertising | 3% of Gross Sales |
| Software Licenses | $150 per month |
| Additional Training/Assistance | $600 per day per trainer, plus expenses |
| Late Charge | 1.5% per month or maximum legal rate, whichever is lesser amount |
| Cost of audit | ($12,000 in 2004), plus Royalty and Advertising Fees due on understatements, plus Late Charges |
| Supplier and/or Product Approval | $500-$ 1,000 payable to the franchisor and non-refundable |
| Transfer | 50% of the then initial franchise fee charged to new franchisees |
| Management Fee | 10% of weekly Gross Sales |
| Renewal | 50% of the initial Franchise Fee for new franchisees |
| Attorneys' Fees | Actual expenses |
| Website Fee | $25.00 per month |
The above information has been taken from the UFOC/FDD of the Auto-Lab Franchise Management Corporation.
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