Franchising Since: 1986
U.S. Headquarters: Rockledge, Florida
Country of Origin: Australia
Estimated Number of Units: 710
Franchise Description: Pirtek USA, LLC is the franchisor. The franchisor offers Pirtek franchises in the United States under master franchise rights granted in June 1997 by Pirtek Fluid System Pty. Ltd. (PFS), the head franchisor based in Australia. The franchise offered is for the right to own and operate a Pirtek hose service center business, which will consist of the sale, custom assembly and installation of industrial and hydraulic hoses, fixed tube assemblies, fittings and related components and other distinctive products and services.
Training Overview: Franchisees must attend and complete to the franchisor’s satisfaction the initial Tier 1 or Tier 2 training program before they begin operating their business. Training is available to franchisees, their designated manager (if someone other than the franchisee), their operations manager, a technical sales representative (for Tier 1 franchises only), at least two mobile sales & service (MSS) technicians and the administration person for the business. The franchisor conducts its training program at the Franchise Support Center in Rockledge, Florida, or other locations designated by the franchisor, including a host Pirtek center for “on the job” work experience. The training will generally be for two weeks at the franchisor’s headquarters for owners and designated managers and 1 week at headquarters for all other positions, followed by two weeks of on-site support. The training program includes two phases: (i) instruction regarding the general management of the business; and (ii) instruction regarding the operations and technical aspects of the business. Franchisees (and their designated manager if someone other than the franchisee) must attend any annual national conference that Pirtek organizes for franchisees. In addition, franchisees (and their designated manager if someone other than the franchisee) must attend regional seminars that the franchisor may organize from time to time.
Territory Granted: Franchisees are granted the right to operate their business within an exclusive territory, subject to certain limitations. The method used to describe territorial boundaries of franchises generally will be one or a combination of the following: county lines, highways or streets or zip codes or waterways. There is no minimum size territory that the franchisee will receive. During the term of the Franchise Agreement, the franchisor will not establish either a company-owned or franchised Pirtek Hose Service Center within the franchisee’s territory or modify the territory without written permission, provided that the franchisee is in complete compliance with the terms and conditions of the Franchise Agreement. In exchange for granting franchisees the rights within the territory, the franchisor expects and require them to meet minimum performance standards in the territory.
Obligations and Restrictions: If franchisees are an individual, they must directly supervise and manage the business. If franchisees are a corporation, partnership or other business entity, they must designate in writing to the franchisor the individual who owns at least 25% of the franchise (controlling owner). The controlling owner must actively direct the affairs relating to the Pirtek business and is responsible for overseeing the general management of the day-to-day operations of the Pirtek business. The franchisor requires franchisees to offer and sell only those products and services that the franchisor has approved. Franchisees must offer all products and services that the franchisor requires. There are no limits on the franchisor’s right to make modifications to the approved products and services from time to time as set forth in the operations manual or otherwise in writing.
Term of Agreement and Renewal: The length of the initial franchise term is 10 years. If franchisees satisfy renewal requirements, they may renew for two 10-year renewal terms.
Financial Assistance: The franchisor does not offer direct or indirect financing. The franchisor does not guarantee a franchisee’s notes, leases or obligations. If franchisees are an honorably discharged veteran of the U.S. Armed Forces, they may be eligible to receive a $15,000 discount off the initial franchise fee amount due at the time they sign the Franchise Agreement.
Estimated Initial Investment
| Name of Fee | Low | High |
| Initial Franchise Fee | $55,000 | $55,000 |
| Opening Setup Fee | $0 | $14,000 |
| Initial Technology Start-up Fee | $8,000 | $10,000 |
| Computer System | $3,000 | $5,000 |
| Training | $2,000 | $15,000 |
| Leasehold Improvements | $0 | $37,000 |
| Signage | $0 | $7,695 |
| Shop Equipment | $2,500 | $79,586 |
| Mobile Sales & Service Units | $20,000 | $30,000 |
| Tracking System | $300 | $300 |
| Prepaid Rent and Security Deposit | $700 | $5,000 |
| Opening Inventory | $65,388 | $138,851 |
| Insurance Premiums | $20,000 | $40,000 |
| Utility Deposits and Business Licenses | $400 | $3,000 |
| Attorney’s Fees | $2,000 | $5,000 |
| Consumables | $700 | $1,400 |
| Shop Supplies & Tools | $3,957 | $8,925 |
| Safety Equipment | $192 | $1,881 |
| Freight/Delivery Charges | $1,000 | $9,000 |
| Additional Funds – 5 months | $50,000 | $200,000 |
| ESTIMATED TOTAL | $235,137 | $666,638 |
Other Fees
| Type of Fee | Amount |
| Continuing License Fee | 4% of gross sales. |
| Marketing Fees | 1.5% - 3% of gross sales. |
| Local Marketing | 0.375% - 0.75% of gross sales. |
| Transfer Fee | The greater of $15,000 or 5% of the sale price. |
| Pirtek Meetings | Will vary under the circumstances. |
| Audit and Recordkeeping Costs | Will vary under the circumstances. |
| Interest Expenses | Will vary under the circumstances. |
| Renewal Fee | $10,000 |
| Technology Fee | $660 - $2,850 per month. |
| Insurance | $2,000-$10,000 annual premium for liability insurance only; plus other annual premiums ranging from $4,000 -$30,000 or more, which will vary under the circumstances. |
| Center Relocation Assistance Fee | $2,000 |
| Remodeling Expenses | A maximum of $5,000 per year for each year that the franchisee operates the business under the Franchise Agreement. |
| Costs and Attorneys' Fees | Will vary under circumstances. |
| Dispute Resolution | $5,000 |
| Penalty for Not Returning Manual | $10,000 |
| Territory Infringement Fee | Fee can range from the full invoice amount for the work (depending on the nature of the infringement) up to 2-5 times the full invoice amount for intentional or subsequent infringements. |
| Tracking System Services Fee | $100 per van, per month. |
| Customer Service Fee (optional; upon the franchisee’s request for special product/job or similar items) | Up to 20% of the total cost of the product/job. |
| Insufficient Funds Fee for ACH Draft for Monies Due to the Franchisor or Its Affiliates | 1% of total amount attempted to draft, or $300, whichever is greater. |
| Restocking Fee | 15% when incurred. |
| Charge for Purchasing Products from Unapproved Suppliers | Profit that the franchisor would have earned had the franchisee purchased product from it, plus $5,000 fee, attorney’s fees, and other damages that may accrue. |
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