Meineke Franchise Cost & Fees
Date of Incorporation: 1972
Franchising Since: 1972
Headquarters: Charlotte, North Carolina
Business Description: Meineke Car Care Centers offer to the general public automotive repair and maintenance services that the franchisor authorizes from time to time. These services currently include repair and replacement of exhaust system components, brake system components, steering and suspension components, belts, cooling system service, CV joints and boots, wiper blades, universal joints, lift supports, motor and transmission mounts, trailer hitches, air conditioning state inspections, tire sales, tune-ups and related services, transmission fluid changes and batteries.
Franchise Offer: Meineke offers qualified persons the right to own and operate a Meineke Center at an agreed upon location. From time-to-time Meineke will enter into Development Agreements where the franchisee is granted the right to develop a specific geographic area to place and operate Meineke Centers. Meineke may also from time-to-time enter into conversion agreements with owners of independent automotive repair centers.
Financial Assistance: Meineke periodically makes arrangements with lending institutions and leasing companies under which loans and/or leases may be granted to credit-worthy franchisees to provide financing for certain center equipment. Meineke does not guarantee any note, lease or other agreement or document the franchisee executes.
Training and Assistance: Meineke will provide an initial training program on the operation of a Meineke Center for the Center’s Operating Partner and one other person. The length of the training will depend upon the function(s) the trainee will perform at the Center. The training will last 28 days maximum, and will take place at the Meineke University in Charlotte, North Carolina with additional training possible at a designated center. From time-to-time franchisees may receive individual instruction at their center by Operations managers who periodically visit the center. If Meineke determines that there are significant deficiencies in the operations of the center, it may require franchisees (or their Operating Partner) and their managers and key employees to attend and successfully complete periodic or additional training programs for which it may charge reasonable training fees.
Territory: The franchisee will be granted a protected territory. Once the Premises of the Center has been determined, Meineke will not grant others the right to operate (1) a Meineke Center within a two-mile radius from the Premises; (2) a Meineke Center outside the Protected Area but within a radius of three miles without offering the franchisee a right of first refusal; or (3) more than one Meineke Center for every 50,000 motor vehicles registered in the particular Metropolitan Statistical Area that the Center is to operate. In addition, Meineke has developed an “encroachment policy,” that contains provisions to amicably resolve any concerns about an additional Meineke Center causing an excess loss of sales to an existing Meineke Center, as well as an informal binding dispute resolution process if the parties are unable to amicably resolve those concerns.
Term of Agreement and Renewal: The length of the franchise term is 15 years. If conditions are met, the franchisee may be granted renewal under a Successor Franchise Agreement for a term of 15, eight or five years at the franchisee’s choice.
Obligations and Restrictions: The day-to-day operations of the Center must be managed at all times by the franchisee (or Operating Partner, if the franchisee is a business corporation, partnership, limited liability company or other legal entity) or a manager who has completed the training program satisfactorily. The Center must be staffed at all times with a sufficient number of competent and properly trained employees. At least one employee of the Center must obtain and maintain certification by Automotive Service Excellence (ASE) for each of the areas of service comprising Authorized Products and Services performed at the Center for which certification is provided. The franchisee may not recruit or hire any person who is then (or was within the immediately preceding 30 days) employed by any Meineke Center operated by the franchisor, an affiliate or another Meineke Center without obtaining the employer’s consent. Franchisees may only offer and sell the automotive maintenance and repair products and services the franchisor authorizes Meineke Centers to offer and sell to the public.
Estimated Number of Units: 975
|Name of Fee||Low||High|
|Initial Franchise Fee||$7,500||$30,000|
|Living Expenses during Training||$1,875||$2,700|
|Real Estate Rent & Security Deposit||$3,900||$49,490|
|Equipment, Signs, Small Tools, Installations||$104,442.23||$127,247.88|
|Point of Sale Software and Computer Hardware||$7,363||$9,871.94|
|Legal & Accounting Expenses||$250||$8,000|
|Additional Funds - 3 months||$35,000||$70,000|
|ESTMATED TOTAL COST PROJECTION, LEASED LOCATION||$200,139.61||$450,901.20|
|Type of Fee||Amount|
|Royalty Fees||The franchisee is required to pay the greater of an annual minimum royalty in the amount of $20,800 or a calculated royalty based on the percentages of Gross Revenues on the identified categories of Authorized Products and Services.|
|Meineke Marketing Fund Contributions||8% of Gross Revenues except 1.5% of Gross Revenues from the sale of tires, towing services, state inspections & emissions inspections.|
|Renewal Fee||$2,500, subject to any increase in the CPI.|
|Intershop Late Fee||$20|
|Transfer Fee||$5,000 subject to increase in the CPI.|
|Initial Advertising Contribution Upon Transfer||$20,000|
|Resale Assistance Fee||$6,000|
|M. Key Software License Fee||$4,995|
|M. Key Software Transfer Fee||$500, subject to any increase in the CPI.|
|Technology Administrative Fee||Currently, $100 per month, subject to periodic adjustment.|
|M. Key Maintenance Fee||$217 basic maintenance fee, additional $10 for phone date express service, $89.50 per month for Mitchell on Demand 5.0 ($99.50 per month for Mitchell on Demand 5.0 plus Estimator). All fees subject to periodic adjustment.|
|Attorneys’ Fees and Other Costs||Will vary under the circumstances.|
|Indemnification||Will vary under the circumstances.|
|Audit||Cost of audit.|
|Reimbursement of Repair & Maintenance Costs||Will vary under the circumstances.|
|Interest on Late Payments & Other Related Charges||Interest rate on late payments is 3% above the prime rate, not to exceed the highest rate allowable by law. $35 charge for each NSF occurrence.|
|Fascia & Sign Update||$3,000|
|Alternative Supplier Evaluation Fees||Will vary under the circumstances.|
|Training Fees||No charge associated with initial training, but Meineke may charge a fee to cover the out of pocket costs of supplemental training.|
|Upgrade of Center||Up to $10,000 per occurrence, but not more often than every five years of the franchise agreement.|
|Sublease Rent||110% of the rent payable by the sublessor, plus an amount equal to 1.25% of the contribution made by the sublessor to fund construction and improvement of the premises.|
The above information has been taken from the FDD of Meineke. Year of FDD: 2015
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