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Matco Tools Franchise Cost & Fees

Date of Incorporation: 1946
Franchising Since: 1993
Headquarters: Stow, Ohio

Business Description: Matco is a manufacturer and distributor of professional quality mechanics’ tools and service equipment.

Franchise Offer: Matco offers franchisees the right to enter into a distributorship agreement, which grants the franchisee the right to purchase, resell, and service the Products as a mobile distributor under the System. The franchise will operate principally from a vehicle, purchase the products from Matco, and resell the products to potential purchasers within the territory.

Financial Assistance: Matco offers a number of financing programs to its distributors. There are five inventory financing programs, and one other financing program, that may be offered by Matco, to qualified distributors.

Training and Assistance: Matco will provide the franchisee with at least 70 hours of mandatory initial classroom training at Matco’s corporate offices in Stow, Ohio, or at such other location as may be designated by Matco. The franchisee and operator must successfully complete the Matco Business System Training Program before operating the Distributorship. The Matco Business System Training Program will include classroom instruction on basic business procedures, purchasing, selling and marketing techniques, customer relations, basic computer operations and other business and marketing topics selected by Matco.

Territory: The franchisee will only be allowed to operate the distributorship within the territory described in the Franchise Agreement. The territory will encompass the locations identified on the List of Calls and on the Potential Customers List. Prior to establishing a List of Calls, Matco will conduct a survey of various geographic areas, prior Matco distributor routes, and potential new distributor routes to determine a suitable territory and List of Calls that contains a minimum of 325 potential customers.

Term of Agreement and Renewal: The initial franchise term is for a length of 10 years with an option to renew for a period of 10 years, if requirements are met.

Obligations and Restrictions: Franchisees must use their best efforts to promote the sale of the products and to provide service and warranty support to actual and potential customers. Franchisees will be responsible for all aspects of managing the business including, but not limited to, extending credit, budgeting, monitoring and collecting time payment accounts, collecting PSA Gold Card accounts, sales, purchases, and inventory management and control. Franchisees may only sell Products and other merchandise approved and purchased from Matco (with the exception of trade-in merchandise), and must purchase the products only from suppliers who have been approved in writing by Matco.

Estimated Number of Units: 1,690

Investment Tables:
Initial Investment
Name of Fee Low High
Initial Franchise Fee $6,000 $6,000
Initial Inventory $63,000 $86,000
Acquisition and Establishment $22,000 $22,000
Time Payment Reserve Accounts
OR
$4,700 $9,325
Mobile Store — three months lease payments $4,050 $125,000
Computer Hardware $2,600 $3,000
Computer Software and Internet Service - 3 months payments $1,744 $2,295
Insurance - 3 months premiums $915 $2,500
Travel, Lodging and Meal Expenses $170 $2,515
Professional Services $150 $2,000
Fixtures, Supplies, Licenses $500 $3,000
Additional Funds - 3 months $5,000 $13,500
ESTIMATED TOTAL $89,229 $267,810
Other Fees
Type of Fee Amount
Minimum Inventory Purchases Maintain an inventory of Products at least equal to the starter inventory; and maintain a ratio of purchase average to total sales of 60%. Also, during the first year of operations the franchisee must participate in the NPP program.
Computer Maintenance and Support Charge $425 or $825
Additional Training Fee (for spouse) $295
Field Training for Additional Replacement Employees and Operators $1,250 per week for field training provided to the 3rd and subsequent employees/operators.
Web Page Maintenance Fee $195
Insurance Varies.
Late Fee on OPA 5% of amount due per week; maximum $100
Inventory Returns, Restocking Fee 15% restocking fee (35% in limited circumstances).
Repair Kits $10 to $40 per kit (but, generally $10 per kit).
Successor Distributorship Fee 50% of Matco’s then-current initial franchise fee.

The above information has been taken from the FDD of Matco Tools. Year of FDD: 2016

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