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Auto Franchise Fees and Costs - Business Report III

Auto Franchise Fees and Costs

Auto franchises come in all shapes and sizes. This is reflected in the variation in fees and capital required to start an auto franchise. Based on the sample in this report the typical franchise fee for a single unit franchise is $25,000.  A higher franchise fee may reflect a higher level of support from the franchisor or a business model with particularly high financial returns.  With a given franchise system there may also be a variation in the franchise fee depending on the size of territory.

The total initial investment required to start a franchise covers the initial franchise fee, leasehold improvements, fixtures and equipment, signs, opening inventory, training expenses, insurance fees etc. There is a big range in start up capital requirements.  For example, the total estimated initial investment required for a Dr Vinyl mobile appearance repair and reconditioning franchise is $55k while the total estimated initial investment for a Big O Tire retail tire and under-car service center franchise ranges from $225,800 to $543,300. 

The table below provides an overview of the estimated initial investment required to open a single unit of 30 auto franchises as well as the ongoing sales royalties payable to each franchisor.  It also contains a detailed profile of each franchise which presents these costs in more detail.  The profiles are extracted from the Uniform Franchise Offering Circulars (UFOC) or Franchise Disclosure Documents (FDD) of the 30 franchisors.  

Table 2: Auto Franchise Profiles


Name of Franchise  Business  Initial Franchise Fee  Estimated Initial Investment
(Low - High)
Royalty on Sales
Alta Mere Window Tinting & Auto Alarms (Moran Industries Inc)
Incorporated: 1990
High tech automotive accessories and window tinting $27,500 $131,600 - $164,382 7% weekly gross sales
American Tire Depot
Incorporated: 2001
Tire & wheel retail $25,000 $335,000 - $548,500 2% of gross sales
ATL International (All Tune and Lube)
Incorporated: 1985
Auto maintenance and repair $25,000 $100,000 – 150,500 Varies depending on product
Auto Appraisal Network Inc Incorporated: 2006 Auto evaluation and appraisal service $15,000 $24,700 - $69,750 $75 per certified report (see full profile)
Auto-Lab Franchise Management Corp.
Incorporated: 2004
Auto maintenance and repair $25,000 $110,000 - $291,000 7% weekly gross sales
Automotive Franchise System
Incorporated: 2003
Interior reconditioning services $10,000 $55,200 - $93,900 10% gross sales
Automotive Reconditioning Franchises Inc. (BumperDoc)
Incorporated: 2007
Auto reconditioning services $25,000 $185,608 - $284,025 7% of gross receipts
Automotive Service Franchising
Incorporated: 1998
Auto maintenance & repair $20,000 $50,300 - $114,000 8.5% of gross profit (see full profile)
Incorporated: 2006
Online inventory management to auto dealers $2,500 $19,137 - $47,910 Variable with a minimum of $3,500
Incorporated: 2004
Paint, dent, and interior repair $9,950 $45,750 - $80,450 Greater of $400 per month or 6% of all of franchisee's gross sales

Big-O-Tire Incorporated: 1982

Retail tire and under-car service centers $30,000 $225,800 - $543,300 2% gross sales
Cornwell Quality Tools
Incorporated: 1919
Mobile mechanics’ tool  distribution $10,000 $83,795 - $192,750 Nil
Dent Doctor Inc
Incorporated: 1988
Paintfree automotive dent removal business $13,900 $54,800 - $80,900 6% gross sales
Dentpro Car Care Franchise Services Inc
Incorporated: 2006
Dent & paint repair $25,000 $80,700 - $108,200 7% of total gross sales
Dr. Vinyl Incorporated: 1978 Repair and recoloring of automobile vinyl, leather, fabric and plastic covered surfaces $38,950 $55,770 7% of gross sales
Fast Undercar Franchise Corp
Incorporated: 1998
Sale of undercar parts, supplies and accessories $12,500 $485,000 - $794,500 The greater of 4% of the Cost of Goods Sold, or $2,000/month for the first 12 months
Monkey Shine
Incorporated: 2007
Car wash franchise $5,000 $166,950 - $320,400 3% gross receipts
Honest-1 Auto Care
Incorporated: 2003
Auto maintenance & repair $25,000 $156,500 - $231,500 6% weekly gross sales
Interstate All Battery Center
Incorporated: 2000
Batteries retail $30,000 $158,500 - $265,000 5% gross sales
Incorporated: 1999
Spray-on protective coating dealership $30,000 $140,183 - $252,450 N/A
Grease Monkey
Incorporated: 2006
Quick service automotive oil and lubrication centers $18,000 $18,150 - $321,200 5% of gross receipts
Incorporated: 1993
Automotive glass, repair and replacement $7,500 $48,140 -$200,320 8% gross revenues
Oil Butler
Incorporated: 1991
Mobile oil change and windshield repair franchise $15,000 $28,000 - $40,700 First six months of operation: $50; $65. Months 7-12; $85
One Stop Undercar Inc
Incorporated: 1993
Distributor of automobile parts, accessories and equipment $40,000 $574,000 - $871,000 Greater of (a) 5% of initial license fee or (b) 5% of each month's gross sales
Incorporated: 2002
Car wash and detailing service $25,000 $33,935 - $140,440 5% of gross sales
Speedy Clean
Incorporated: 2002
Distributor of  equipment, cleaning and accessory supplies $5,000 $14,500 - $38,500 $250 per month
Tire Pro Incorporated: 1988 Tire dealership $20,000 $103,885- $372,685 $495
Total Car  Franchise  (Colors On Parade)
Incorporated: 1991
Mobile vehicle exterior paint repair and refinishing $2,500 $50,004 - $75,454 30% of all gross revenues
Victory Lane Quick Oil Change
Incorporated: 1980
Oil change and associated services $30,000 $219,700 - $361,500 The greater of 6% of weekly revenues or $250


Other ongoing fees and costs

The typical recurring fees and payments for auto franchisees based on the report sample are outlined in the table below. Royalties vary according to the nature and size of the business, the level of ongoing support provided by the franchisor and expected financial returns. The average royalty charged by auto franchises is 5% of gross sales with a range of 2% - 30% of gross sales. Other franchisors charge a fixed monthly fee.

The typical advertising fee charged by auto franchisors is 2% of gross sales with some charging a flat fee. As with royalty fees there is wide variation among franchises with some franchises charging no advertising fee and others charging up to 5% of gross sales.

Most franchise terms are 5 -10 years. Many franchisors charge a renewal fee to extend the franchise license. The typical renewal fee is between $2,500 -$5,000 or between 10%-50% of the initial license fee. Should the franchisee decide to sell the franchise the franchisor will generally charge a transfer fee to cover the costs of training and developing a new franchisee. The transfer fee typically applying to auto franchises in this report is $5,500

The late charges and interest are fees that are paid if the franchisee is overdue in paying royalties or other monies owed.  The fee for auto franchises is generally 1.5% monthly on amount owed.


Table 3: Typical ongoing fees and payments


Royalty (% gross sales) 5%
Advertising fund (% gross sales) 2%
Additional training Ranges from $100- $600 per day plus expenses
Transfer fee $5,500
Renewal fees $2,500 -$5,000 (some franchises do not charge renewal fees)
Late charge 1.5% per month
Interest 1.5% per month

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