Snap-on Tools Franchise Cost & Fees

 Date of Incorporation: 1920

Franchising Since:  1990

Headquarters: Kenosha, Wisconsin

Business Description: Snap-on Tools Company, LLC offers a license to operate a franchised retail mobile store selling high quality repair and diagnostic tools and equipment.  Its parent corporation is Snap-on Incorporated.  Snap-on manufactures and/or distributes these tools and equipment to professional mechanics and other tool users in the automotive aftermarket and related businesses throughout the United States.

Franchise Offer: There are two franchises offered.  
1)    The standard franchise offering is for a 10-year license (in the case of a renewal franchise a five year license) to operate a Snap-on retail mobile store through a Snap-on Tools franchise agreement between a franchisee and Snap-On.  The franchisor makes available to existing standard franchisees who qualify the opportunity to purchase an additional franchise or add an additional van for an existing franchise.
2)    The Gateway franchise offering affords a franchisee a license for two years to operate a Snap-on retail mobile store as a Snap-on franchisee.  Gateway franchisees will have the option at the end of the term to become a standard franchisee if he/she meets the requirements for conversion set forth in the gateway franchise agreement.
The license under both agreements grants the right to purchase products at a discount from suggested retail products, and the right to resell the products at prices of the franchisee’s choosing, to customers at business locations identified on an assigned list of calls attached to the franchise agreement.

Financial Assistance: Snap-on Credit may, at its option, offer the franchisee direct financing assistance. Financing options are available for standard franchises and gateway franchises.  If the franchisee meets all the requirements, Snap-on Credit may lend funds to cover certain initial investment costs and expenses of the franchise.  Snap-on Credit may also lend the franchisee funds to cover initial investment costs and expenses for an additional franchise or to add an additional van under the expansion program.  Snap-on Credit may also lend funds to purchase additional inventory finance RAs, or recapitalize the business. Snap-on Credit is owned by Snap-on Incorporated.  

Training and Assistance: Before the franchisee begins operation of the franchise, the franchisor provides New Franchisee Training.  Gateway Franchisees who convert to a Standard Franchise will not be provided training at the time of conversion, since the franchisee will have received substantially the same training prior to becoming a Gateway Franchisee.  All Standard Franchisees, Gateway Franchisees and employees of a Standard Franchisee who operate an Expansion Franchise or additional van must satisfactorily complete New Franchisee Training, or in the case of an employee operating an additional van, the portions of New Franchisee Training applicable to that employee.  New Franchisee Training is not provided to you if you are purchasing a Renewal Franchise.  New franchisee training currently consists of approximately 55.5 hours of classroom training and 135 hours of on-the-job training.  About 5-6 months after the franchisee begins operating the business an additional training session will take place to reinforce the previous training.  Additional training programs will be at the times and places designated by Snap-on.

Territory: The franchisor grants the right to sell products to locations on a “list of calls”, which consists of a series of business addresses at which the franchisor has determined that there are, or should be, tool users who purchase their own tools. The franchisee will receive the list of calls at least seven calendar days prior to signing the franchise agreement.  It is the intent of Snap-on that the list of calls contains at least 200 potential core customers at the time the franchise agreement is signed.  The franchisee is not granted an exclusive territory, and may face competition from the franchisor or other competitive third parties, or from other channels of distribution or competitive brands controlled by the franchisor.

Term of Agreement and Renewal: The length of the franchise agreement is 10 years. The franchisee can add one term of five years, if he/she gives written notice between 9 and 12 months prior to expiration, and meets all the renewal requirements.

Obligations and Restrictions: The franchisee alone must personally make all regular sales and service calls on potential customers on the list of calls, unless agreed upon in writing. This requirement will not apply to an expansion franchise or additional van under the expansion program.  The franchisee must use his/her best efforts to promote aggressively and develop fully the sales of products to these potential customers and maintain an inventory of products in at least the minimum amount specified in the Snap-on program.  The franchisee must call on every potential customer at stops on the list of calls at least once a week.  The franchisee must refrain in engaging in activities that would conflict with these purposes, and must devote full business attention and efforts to these purposes. The franchisee may offer and sell only products, and only to customers on the list of calls. The franchisee may sell merchandise other than specified products only with the franchisor’s express, prior written consent.  The franchisee must honor all warranties on products sold.

Total Number of Units: 4,800

Investment Tables:
Initial Investment:

Standard Franchise Fees:

Gateway Franchise Fees:

Ongoing Fees:

 Standard Franchise Fees:

Gateway Franchise Fees:

  Date of FDD: 2011

The above information has been taken from the UFOC/FDD and online sources of Snap-on Tools.
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