Fast Undercar
Date of Incorporation: July 6, 1998
Franchising Since: 1998
Address: California
Description: Fast Undercar® outlets sell primarily to professional installers ranging from independent garages with a single service bay to well-known national repair chains servicing high volumes of business. Fast Undercar specializes in the sale of undercar parts, supplies and accessories. These parts and supplies are for installation or use in automobiles and other light vehicles in accordance with manufacturers' specifications. Most undercar products are subject to constant wear and tear and most professional installers can install these products without special training.
Franchise Offer: Fast Undercar® Franchise Corporation grants the right to franchise a distribution outlet specializing in the sale of undercar parts, supplies and accessories. The franchisee’s inventory will include popular-brand brake parts, steering, chassis and suspension components, power transmission parts and other automotive parts and supplies that the franchisor specify. The franchisor primarily offers single unit franchises for one outlet only. Fast Undercar Franchise Corp. offer franchises to conversion operators, i.e., to persons meeting the franchisors experience and financial qualifications who own an independent automotive aftermarket parts supply business in a market area they desire to expand into. Conversion operators must have a minimum of 2 years operating history in their current market area.
Financial Assistance: Fast Undercar® Franchise Corp. does not offer any direct or indirect financing nor do they guarantee any note, lease or obligation.
Training and Assistance: The initial training program for start-up franchisees is a 104 hour course generally taught in 3 consecutive weeks. The franchisee may send up to 4 individuals (including themselves) to the same pre-opening training session without paying a training fee. The training covers such things as product knowledge, purchasing and inventory Systems.
Territory: The Franchise Agreement grants the franchisee the right to operate a Fast Undercar® outlet at a specific location only. The franchisor assigns the franchisee a geographic area within which the franchisor will agree not to open, or permit any other person (including affiliates and franchisees) to open, another Fast Undercar® outlet. The franchisor will also promise not to open or franchise another business selling similar products or services under a different trademark.
Term of Agreement and Renewal: The term of franchise is 10 years with an option to renew for an additional 10 years if the franchisee is in good standing with the franchisor. The renewal fee is 25% of the then current initial franchise fee
Obligations and Restrictions: If the franchisee is an individual, they must devote full time and attention to supervising all administrative and operational activities of the franchise business. If a legal entity owns the franchise rights, such as a corporation, partnership or limited liability company, the person who owns a controlling interest in the equity or voting rights of the entity, or a general or operating partner, must devote full time and attention to franchise activities.
The franchisee will need at least 1 full-time approved manager on the staff at all times (the franchisee may designate themselves for this position).
Total Number of Units: Number of franchised Units for year ended 2007: 24
Investment Table:
Initial Investment:
| Name of Fee | Single Unit – Low | Single Unit - High | Conversion Operator – Single Unit - Low | Conversion Operator – Single Unit - High |
|---|---|---|---|---|
| Initial Franchise Fee | $12,500 | $12,500 | $12,500 | $12,500 |
| Outlet Development | $0 | $5,000 | $0 | $5,000 |
| Lease Deposit and Rent for First 3 months | $10,000 | $20,000 | $10,000 | $20,000 |
| Construction and Leasehold Improvements | $0 | $5,000 | $0 | $5,000 |
| Equipment, furniture, furnishings, office equipment and initial supplies including POS system | $38,000 | $60,000 | $5,800 | $60,000 |
| Initial Inventory | $350,000 | $550,000 | $0 | $550,000 |
| Professional fees | $2,000 | $7,500 | $2,000 | $2,000 |
| Utility Deposits | $500 | $1,500 | $500 | $0 |
| Insurance | $5,000 | $15,000 | $5,000 | $0 |
| Delivery Vehicles | $15,000 (based on 5 trucks) | $30,000 (based on 10 trucks) | $0 (based on 5 trucks) | $30,000 (based on 10 trucks) |
| Employee Expenses During Training | $5,000 | $8,000 | $2,000 | $4,000 |
| Promotional Expenses | $2,000 | $5,000 | $2,000 | $5,000 |
| Additional Funds | $45,000 | $75,000 | $15,000 | $30,000 |
| Total Initial Investment | $485,000 | $794,500 | $54,800 | $723,500 |
Ongoing Costs:
| Name of Fee | Amount |
|---|---|
| Royalty Fee | The greater of (i) 4% of the Cost of Goods Sold, or (ii) $2,000/month for the first 12 months after the outlet opens for business and $2,500/month for the balance of the franchise term. Same rate applies to start-up and conversion franchisees. |
| Advertising Fee (if created) | None at this time. However, the franchisor reserves the right to establish a Promotional Fund and to charge up to 1 % of the Cost of Goods Sold as an Advertising Fee. |
| Cooperative Advertising Fee (if created) | None at this time. However, the franchisor reserves the right to establish a regional cooperative. Cooperative Advertising Fee will not exceed 1 % of the Cost of Goods Sold. |
| Training of Additional Personnel (More than 4 at one time) or for Replacement Managers re: initial training | Presently $50 per hour per person plus actual expenses that the franchisees’ personnel incur to attend training. |
| Additional Training | Presently $50 per hour plus the franchisors actual expenses. |
| Licensing Fees for Access to Web-Based Training Solutions | The franchisor does not expect the initial license fee to exceed $1,500 or continuing license fees for maintenance and upgrades to exceed $300/month. The franchisor expects to charge a two-tier fee for franchisees with more than 20 employees and for franchisees with 20 employees or less. The franchisor may increase continuing license fees once every 12 months upon 30 days notice by an amount not to exceed 10% of then-current continuing fees. |
| Renewal Fee | 25% of the then-current Initial Franchise Fee that the franchisor charges when you renew. |
| Transfer Fee (Single Unit) | $2,500 Additionally, the transferee must pay the franchisors then-current license fee for access to the Web-Based Training Solutions if in place at the time of transfer. |
| Securities Review Fee | Reimbursement of the franchisors actual cost to review the securities registration or offering documents, not to exceed $25,000 (subject to cost-of-living adjustment). |
| On-Site Review Fee | $250 per day |
| Alternate Supplier Testing Fee | $1,000 |
| Inventory Items | The franchisors cost plus 10% |
| POS Maintenance Fee | The monthly POS Maintenance Fee will range between $900 - $3,500. |
| Administrative Support Services | $30/hour |
| Maintenance or Repair Work | 15% service charge (based on cost of remedial work) payable to the franchisor if they elect to perform needed maintenance or repair work at the franchisees’ outlet after they fail to do so following the franchisor’s written request. Additionally, the franchisee must reimburse the franchisor for all of their actual direct costs in performing the work. |
| Insurance | 15% service charge (based on cost of obtaining required insurance) payable to the franchisor if the franchisee fails to maintain required insurance. |
| Replacement of Operations Manual | $1,000 per volume, plus shipment |
| Audit | Cost of inspection or audit, including the franchisor’s reasonable accounting and attorney fees |
| Late Payment | Late charge equal to 10% of the payment, together with interest at 1-1/2% per month (not to exceed highest rate of interest allowed by law) |
| Indemnification | Will vary under circumstances |
| Costs and Attorneys Fees | Will vary under circumstances |
The above information has been taken from the UFOC/FDD of Fast Undercar® Franchise Corporation.
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