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Merlin 200,000 Mile Shops Franchise Costs & Fees

Date of Incorporation: 1975
Franchising Since: 1975
Headquarters: Charlotte, North Carolina

Business Description: The franchisor is Merlin Franchisor SPV LLC. Franchisees engage in the business of owning and operating a Merlin 200,000 Miles Shop which specializes in vehicle longevity, preventive maintenance, and in the repair and replacement of brake systems and components, motor vehicle muffler and exhaust systems, ride control components, tires, and other motor vehicle services.

Franchise Offer: The franchisor offers franchises to qualified persons for shops that specialize in vehicle longevity, preventive maintenance, and in the repair and replacement of motor vehicle brake systems and components, mufflers and exhaust systems, ride control components, springs, other ride and steering control components, tires, and most other motor vehicle services exclusive of body and paint, and engine and transmission major overhaul.

Financial Assistance: The franchisor does not offer direct or indirect financing. The franchisor does not guarantee franchisees’ note, lease or obligation.

Training and Assistance: The Company will provide franchisees with a mandatory training program on the operation of a Merlin Shop to be conducted at the Company’s offices, training center or Merlin Shops and at times the Company designates. The initial training program presently has no fixed duration and runs for a minimum of 4 weeks. Training is intended to include exposure to the operation of the entire Shop. In addition, the training includes a 3-day intensified brake systems course which may be conducted by an outside service. Periodically, certain suppliers conduct seminars to familiarize franchisees and Merlin Shop managers with the installation and use of their products. As the need arises, the franchisor intends to make available additional training programs to franchisees and to change existing programs as necessary.

Territory: The Franchise Agreement grants franchisees the right to operate the Shop at a specific location. Once franchisees locate and the franchisor has approved this site, they will be granted the Territory. Franchisees will not receive an exclusive territory. Franchisees may face competition from other franchisees, from outlets that the franchisor owns, or from other channels of distribution or competitive brands that the franchisor controls. During the term of the Franchise Agreement the franchisor will not operate (either directly or through an affiliate) nor grant a franchise (except to that franchisee) for the operation of a Merlin Shop to be located within a 2-mile radius of the Shop.

Term of Agreement and Renewal: The length of the initial franchise term is 20 years. One additional term of 20 years is available, if franchisees are in compliance with the Franchise Agreement.

Obligations and Restrictions: The Franchise Agreement provides that franchisees must devote a minimum of 48 hours per week to the business of operating the Shop. Franchisees must spend 90% of that 48 hour period on the Shop premises. The Shop must be under franchisees’ direct supervision or that of one or more competent employees acting as the Shop manager at all times. The Shop manager must successfully complete the franchisor’s training program. Franchisees must offer all motor vehicle exhaust systems, tires, ride control components, brake systems and components, maintenance programs, and all other motor vehicle services and products which the franchisor periodically authorizes for the Shop. Franchisees may not, without prior written approval, offer any other services or products, nor may the Shop be operated or used for any purpose other than the operation of a Merlin Shop in compliance with the Franchise Agreement.

Estimated Number of Units: 40

Investment Tables:
Initial Investment
Name of Fee Low High
Initial Franchise Fee $30,000 $30,000
Leasehold Improvements $0 $20,000
Furniture, Fixtures, Equipment and Signage $140,000 $195,000
First 3 Months’ Rent $9,600 $24,000
Security Deposit $4,300 $10,000
Opening Inventory and Supplies $27,000 $35,000
Training Expenses $300 $4,000
Miscellaneous Opening Costs $10,000 $30,000
Additional Funds - 3 months $30,000 $60,000
ESTIMATED TOTAL (Excluding Real Estate Costs) $251,200 $408,000
Other Fees
Type of Fee Amount
Royalty Fee 6.9% of Net Revenues.
Marketing Fund Contribution 5% of Net Revenues.
Transfer Fee $9,000
Audit Fees Cost of inspection or audit, plus any deficiency and late payment charges.
Interest Charges on Late Payments Lesser of 21% per year or highest rate allowed by law.
Costs and Attorneys’ Fees Will vary under circumstances.
Indemnification Will vary under circumstances.
Customer Reimbursements Up to 200% of original repair amount.
Service Charges $25 to $100
Recruitment Fee $2,000
Service Charges for Specified Defaults $100 per day.
Service Charges for Failure to Furnish Financial Statements $25 per day.
Service Charge for Failing to Attend National or Regional Franchise Meetings $2,500 per occurrence.

The above information has been taken from the FDD of Merlin 200,000 Mile Shops. Year of FDD: 2016

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