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AAMCO Franchise Cost & Fees

Date of Incorporation: 1963
Franchising Since: 1963
Headquarters: Horsham, Pennsylvania

Business Description: Since 1963, AAMCO has developed, operated and sold franchises for transmission and general automotive repair centers.

Franchise Offer: AAMCO franchisees own and operate AAMCO Centers and sell transmission repair services, as well as AAMCO's Total Car Care services, such as oil and filter changes, brake services, cooling system service, tune-ups and factory recommended maintenance, to the general public on both a retail and wholesale level.

Financial Assistance: AAMCO does not offer direct or indirect financing. AAMCO does not guarantee a franchisee’s lease. AAMCO is listed on the SBA's Franchise Registry as complying with SBA's franchise eligibility guidelines. The Registry allows franchisees to enjoy the benefits of a streamlined review process for SBA loan applications.

Training and Assistance: Franchisees of a new Center must attend AAMCO's Operator's School before opening the Center for business. AAMCO's three-week Operator's Training School includes intensive training in the operation of an AAMCO Center, including management skills and methods, and does not teach mechanical skills. For franchisees that are new to the AAMCO system, during the first quarter after they open their Center, AAMCO will provide an intensive five week Grand Opening Operations Development Training (the GOOD Training) program at their AAMCO Center. This training will be conducted during normal business hours and will not interfere with Center operations. While franchisees are responsible for hiring their employees, AAMCO will assist franchisees in recruiting a customer service manager and technicians for the Center. The customer service manager must attend AAMCO's one-week school conducted periodically during the year. AAMCO may require that franchisees attend additional training courses. AAMCO will determine whether or not a franchisee has to attend additional training based on the effectiveness of his or her compliance with AAMCO's policies and procedures.

Territory: Franchisees do not receive and AAMCO does not grant franchisees an exclusive or protected territory or trading area. Franchisees may face competition from other franchisees, from outlets that AAMCO owns, or from other channels of distribution or competitive brands that AAMCO controls, including from Cottman centers (an affiliate). AAMCO grants a license for the operation of one AAMCO Center within a specific Metropolitan Statistical Area or Metropolitan Statistical Area. The exact location must be approved in writing by AAMCO.

Term of Agreement and Renewal: The length of the franchise term is 15 years from the signing of the Franchise Agreement. Unless AAMCO receives notice from the franchisee, or provides the franchisee with notice, of intent not to renew at least one year prior to the termination date of the current term, the Franchise Agreement will automatically renew for an additional 15-year term. The franchisee may be required to sign a then current type Franchise Agreement and the franchise fee may be increased upon renewal.

Obligations and Restrictions: AAMCO requires that the franchisee participate personally and materially in the management and operation of the AAMCO Center. The franchisee must hire only those employees who, after appropriate screening, demonstrate themselves to be honest and dependable. The franchisee must hire a customer service manager for the AAMCO Center, and he or she must satisfactorily complete AAMCO's customer service manager training and any other retraining AAMCO requires. If requested by AAMCO, the customer service manager must sign a confidentiality agreement by which he or she agrees to maintain confidentiality of trade secrets and proprietary information.
While some AAMCO dealers, with AAMCO's advance written approval, have other business interests, the franchisee must maintain a regular and reasonably consistent schedule of overseeing the day-to-day operations and development of the business of the Center. AAMCO requires that the franchisee offer and sell only those goods and services that AAMCO has approved. The franchisee must offer all goods and services that AAMCO designates as required for all franchisees.

Estimated Number of Units: 670

Investment Tables:
Initial Investment
Name of Fee Low High
Initial Franchise Fee $39,500 $39,500
Business Coach Training $10,000 $10,000
AAMCO Security Deposit $5,000 $5,000
Grand Opening Advertising Expenses $3,000 $3,000
Travel Expenses for Training $2,000 $4,000
Real Estate & Utility Deposit $14,000 $43,000
Leasehold Improvements $8,500 $12,000
Signs (including in Center Opening Package) $10,000 $14,000
POS System $3,500 $3,500
Shop Equipment, Supplies, Lifts & Installation (included in Center Opening Package), plus freight & taxes $78,400 $98,000
Office Furniture $6,000 $7,000
Computer & Phone System - Hardware $7,000 $10,000
Sales Materials $800 $1,000
Technical Information System – Access/Support (3 months) $300 $300
Miscellaneous Costs & Professional Fees (Legal and Accounting Advice, Personnel Recruitment, etc.) $4,000 $10,000
Insurance $1,500 $2,500
Advertising Costs - 3 Months $4,470 $13,500
Additional Funds - 3 Months $30,000 $50,000
ESTIMATED TOTAL
(Does not include real estate costs if franchisee is purchasing the property)
$227,400 $333,000
Other Fees
Type of Fee Amount
Royalty Fee 7.5% of total gross sales.
National Creative Advertising Fee $150 per month.
Local Advertising $200- $876/ week (average $550/week) for active Pools; If no Pool, greater of 4% of Gross Receipts or $400 (or 5% of Gross Receipts or $500 in top 20 markets as determined by Nielsen Media Research).
Yellow Pages Advertising (or Local Internet) Varies; averages approx. $227/month.
Internet Directories $23.10 per quarter for yp.com platinum ad.
Web pages Fees Annual cost of third party URL provider, plus $35/year processing fee.
National Internet Minimum $128/month for inclusion in search campaign.
1-800-GO-AAMCO $125 initial connection, plus $0.25/minute per call in U.S. (or $0.55/minute in Canada).
Remote Call Forwarding Telephone Numbers About $500/year for 5 numbers, plus adjustable usage fees at about $0.06/minute.
POS System Software – Initial License $2,499 - New Franchisee for non-conversion Center;
$499 – Existing Franchisee already using FOCUS software;
$0 – Existing Franchisee already using FOCUS GOLD software, or acquiring a Center resale, or any conversion franchisee.
DirecTech PRO Technical Information System $1,695 initial license fee, plus $99/monthly.
Express Cash Processing Fee Currently 1.38% of central billed, national fleet account approved repair order amount- participating Centers only (amount subject to change based on prime rate and number of participating Centers).
Intershop Warranty Work Other Center’s costs incurred for warranty work (parts plus labor).
Indemnification Will vary under circumstances.
Interest 18% per year.
Late Fees $10 per week per late report.
Audit Costs of audit, plus 3 times amount of underpayment, plus interest on underpayment.
Transfer Fee $6,000

The above information has been taken from the FDD of AAMCO. Year of FDD: 2015

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