Pirtek Franchise Cost & Fees
Date of Incorporation: 1979
Franchising Since: 1986
U.S Headquarters: Rockledge, Florida
Country of Origin: Australia
Business 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.
Franchise Offer: 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.
Financial Assistance: The franchisor does not offer any direct or indirect financing nor do they guarantee any note, lease or obligation. The franchisor may periodically arrange with third party finance companies or banks to make financing programs available to franchisees. If financing is offered, the financial institution independently establishes the amount, terms, interest rate and duration. The United States Small Business Administration (SBA) currently offers a Franchise Registry Program to allow for the expedited processing of SBA loans for franchisees of approved franchisors. Pirtek franchisees who apply for SBA loans will receive the benefit of a streamlined loan process. Franchisees should not, however, construe the presence of the Pirtek franchise program on the SBA's Franchise Registry as an endorsement by the SBA, as a guarantee they will be approved for a loan, or an indication of the success or profitability of a Pirtek franchise.
Training and Assistance: Training is available to the franchisee, the designated manager (if someone other than the franchisee), the operations manager, at least two Mobile Sales & Service (MSS) technicians and the administration person for the Business. The training will generally be for 2-4 weeks (2 weeks for the administration person and 3-4 weeks for franchisees and their designated manager, if any) and is scheduled to begin approximately 4 weeks before the franchisee opens the Business. The training program includes two phases: (i) instruction regarding the general management of the Business; and (ii) instruction regarding the sales and service aspect of the MSS Units part of the Business. The “on the job” work experience is designed to provide franchisees and their team with the opportunity to better understand and learn the Pirtek business. The franchisee (and the franchisee’s designated manager if someone other than the franchisee) must attend any annual national conference that Pirtek organizes for franchisees. In addition, the franchisee (and the franchisee’s designated manager if someone other than the franchisee) must attend regional seminars that Pirtek may organize from time to time.
Territory: The franchisee is granted the right to operate their franchise within an exclusive territory. 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, and generally results in an area of 35 square miles. 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.
Term of Agreement and Renewal: The term of the franchise agreement is 10 years with an option to renew for two additional 10-year terms, if all renewal requirements are satisfied.
Obligations and Restrictions: If the franchisee is an individual, they must directly supervise and manage the Business. If the franchisee is a corporation, partnership or other business entity, they must designate in writing to the franchisor the individual who owns 51% of the franchisee and an individual who will directly supervise and manage the operation of the Business. The franchisor requires the franchisee to offer and sell only those products and services that the franchisor has approved. The franchisee 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.
Estimated Number of Units: 460
|Name of Fee||Low||High|
|Initial Franchise Fee||$50,000||$50,000|
|Shop Set-up Fee||$14,000||$14,000|
|Pirtek Data System and Computer Connection Fee||$5,000||$11,000|
|Training||No separate fee for initial training because it is included in the Initial Franchise Fee; $5,000 to $15,000 for expenses (which is $1,000 to $3,000 per person for travel and living expenses during Training).|
|Signs and Equipment||$65,000||$80,000|
|Mobile Sales & Service Units||$47,000||$140,000|
|Prepaid Rent and Security Deposit||$2,000||$5,000|
|Utility Deposits and Business Licenses||$1,000||$3,000|
|Additional Funds - 3 months||$50,000||$100,000|
|Type of Fee||Amount|
|Continuing License Fee||4% of Gross Sales.|
|Marketing Fees||1.5% - 3% of Gross Sales.|
|Local Marketing||0.75% - 1.5% of Gross Sales.|
|Pirtek Meetings||Will vary under the circumstances.|
|Audit and Recordkeeping Costs||Will vary under the circumstances.|
|Interest Expenses||Will vary under the circumstances.|
|Computer/Data Transfer||$500-$2,675 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 the circumstances.|
|Penalty for Not Returning Manual||$10,000|
The above information has been taken from the FDD of Pirtek. Year of FDD: 2016
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