AutoQual USA
Date of Incorporation: October 2003
Franchising Since: February 20, 2004
Address: Michigan
Description: Automotive Franchise Systems conducts business under the corporate name AutoQual USA. An AutoQual USA Business can be operated from a home office, as services are typically provided on-premises at Customers' businesses. The franchise System emphasizes the provision of effective and efficient interior cleaning, repair and protection services at an affordable price. The System includes the use of a customized workstation which is installed in a van used in the Business, stocked with proprietary products, instruction in patented techniques for the services offered by the Business, sales presentation and related products and services.
Franchise Offer: AutoQual USA offers franchises for the establishment and operation of a business ("AutoQual USA Business" or "Business") which offers interior reconditioning and repair services, including: (i) cleaning, repairing, deodorizing, dyeing and masking of carpets, seats and trim in the interior of vehicles; (ii) repairing carpet stains, odours, tears and cigarette burns in cloth, leather and vinyl areas in the interior of vehicles; and (iii) the sale and installation of floor mats and related products and services ("Interior Reconditioning and Repair Services"), primarily to new and pre-owned vehicle customers, automobile rental agencies, auctioneers and automotive sales and service businesses (collectively referred to as "Customers") to assist in selling vehicles within a specific geographic area ("Territory").
Financial Assistance: Neither the franchisor nor any agent or affiliate currently offers direct or indirect financing of the initial fees. Franchisor does not guarantee notes, van payments or other obligations.
Training and Assistance: Franchisor will provide an initial training program that will be conducted in Warren, Michigan and/or at an alternative location. The initial training program will consist of up to one week of classroom training at the designated training location and one week of field training. The franchisee must bring the van(s) that will be used in the business to the initial training program so that the franchisor may install the van workstation in the van(s). The franchisor will conduct the one-week on the job training either in the Territory of an experienced AutoQual USA franchisee or at the designated training facility. Up to two individuals are eligible to participate in the initial training program without charge of a tuition or fee.
Territory: The franchisee may operate the AutoQual USA Business out of a home office or at a lease space within the Territory. If the franchisee wishes to relocate the Business office outside of the Territory, franchisee must first obtain the franchisor's written approval. The franchisee will be given a designated area ("Territory"). The franchisor will not establish and operate, nor license anyone else to establish and operate, an AutoQual USA Business offering Interior Reconditioning and Repair Services within the Territory.
Franchise Term and Renewal: The term of the Franchise is 10 years. The renewal or extension of the term is for up to two additional terms of 10 years each. Requirements to renew or extend depends on upgrading the Business to the current standards, pay fees and have been in substantial compliance with Franchise Agreement.
Obligations and Restrictions: The franchisee must offer for sale and sell through the business only those products and render all services that the franchisor prescribes. The franchisee is obligated to offer the Interior Reconditioning and Repair Services, the AutoQual Certified Warranty Program and any other products and services that the franchisor designates. The franchisee may not offer for sale any products or perform any services that the franchisor has not approved, nor can engage in any other business enterprise through the entity that is used to operate the Business without prior written consent.
Total Number of Units: 91 franchised outlets at the end of the financial year 2006.
Financial Statements: Net income of $143214 for the year ended 2006.
Earning Claim: Average total annual sales of $202,223 for a unit for the year ended 2006
Investment Table:
Initial Investment:
| Name of Fee |
Low |
High |
|---|---|---|
| Initial Franchise Fee |
$10,000 |
$10,000 |
| Territory Fee |
$30,000 |
$38,000 |
| Training and Follow-up Operational Assistance |
$950 |
$2,850 |
| 1 or 2 Vans per Territory |
$1,200 |
$3,600 |
| Plastic Carpet Mask, Floor Mats, Seat Repair Materials, and Other Supplies per Territory |
$5,700 |
$7,620 |
| Equipment per Territory |
$1,200 |
$12,000 |
| Insurance |
$300 |
$3,000 |
| Training Fee |
$850 |
$850 |
| Additional Funds per Territory |
$5,000 |
$15,000 |
| Rent (for first 3months) |
$0 |
$2,400 |
| Total |
$55,200 |
$95,320 |
Ongoing Fees:
| Name of Fee |
Amount |
|---|---|
| Royalty |
10% of Gross Sales. The Royalty is reduced to 5% of Gross Sales if, at any time before the first day of December in any calendar year, the franchisee’s Gross Sales for a particular Territory has exceeded $300,000 for that calendar year. |
| Supplies and Equipment |
Approximately $800 - $5,000 per month per Territory |
| Inspection and Audit |
Cost of inspection and audit |
| Transfer Fees |
$5,000 per Territory plus $3,500 for initial training expenses incurred by the franchisor in training the franchisee’s transferee |
| Renewal |
$3,000 per Territory |
| Office Equipment |
Will vary |
| Interest and Late Charge |
$50 per month plus 18% interest per annum for all amounts except for supplies and equipment; $50 per invoice on supplies and equipment plus 18% interest per annum |
| Additional and Refresher Training |
Published rates, Currently $500 |
| Additional Assistance |
Current published rates |
| Costs and Attorneys' Fees |
Will vary depending on circumstances |
| Indemnification |
Will vary depending on circumstances |
| Insurance Premiums |
Will vary depending on circumstances |
The above information has been taken from the UFOC/FDD of the Automotive Franchise Systems.
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