Franchising Since: 1975
Headquarters: Charlotte, North Carolina
Estimated Number of Units: 25
Franchise Description: The franchisor is Merlin Franchisor SPV LLC, a direct, wholly-owned subsidiary of Driven Systems LLC. The franchise offered is for the operation of a shop under the “Merlin” name and other trademarks which specializes in vehicle longevity, preventive maintenance, and in the repair and replacement of brake systems and components, motor vehicle muffler and exhaust systems, ride control components, tires, and other motor vehicle services.
Training Overview: The franchisor will provide franchisees with a mandatory training program on the operation of a Merlin shop to be conducted at the franchisor’s offices, training center or Merlin shops and at times the franchisor designates. The initial training program presently has no fixed duration and runs for a minimum of four weeks. Training is intended to include exposure to the operation of the entire Merlin shop. Periodically, certain suppliers conduct seminars to familiarize franchisees and Merlin shop managers with the installation and use of their products. The franchisor has the right to require that franchisees (or the shop manager) and/or technicians complete supplemental and refresher training programs during the term of the Franchise Agreement. Additional training will be conducted at the franchisor’s offices, outside training centers or at Merlin shops as the franchisor designates.
Territory Granted: The Franchise Agreement grants franchisees the right to operate the shop at a specific location. Once franchisees locate and the franchisor has approved this site, they will be granted the territory. Franchisees will not receive an exclusive territory. Franchisees may face competition from other franchisees, from outlets that the franchisor owns, or from other channels of distribution or competitive brands that the franchisor controls. During the term of the Franchise Agreement the franchisor will not operate (either directly or through an affiliate) nor grant a franchise (except to that franchisee) for the operation of a Merlin shop to be located within a two-mile radius of the shop.
Obligations and Restrictions: Franchisees must devote a minimum of 40 hours per week to the business of operating the shop. Franchisees must spend 90% of that 40-hour period on the shop premises. The shop must be under the franchisee’s direct supervision or that of one or more competent employees acting as the shop manager at all times. The shop manager must successfully complete the franchisor’s training program. Franchisees must attend all franchise, marketing, and training meetings called by the franchisor. Franchisees must offer all motor vehicle exhaust systems, tires, ride control components, brake systems and components, maintenance programs, and all other motor vehicle services and products which the franchisor periodically authorizes for the shop. Franchisees may not, without prior written approval, offer any other services or products, nor may the shop be operated or used for any purpose other than the operation of a Merlin shop in compliance with the Franchise Agreement.
Term of Agreement and Renewal: The length of the initial franchise term is 15 years. One additional term of 10 years is available, if franchisees are in compliance with the Franchise Agreement.
Financial Assistance: The franchisor does not offer direct or indirect financing. The franchisor does not guarantee a franchisee’s note, lease or obligation.
Investment Tables:
| Name of Fee | Low | High |
|---|---|---|
| Initial Franchise Fee | $30,000 | $30,000 |
| Leasehold Improvements | $20,000 | $150,000 |
| Furniture, Fixtures, Equipment and Signage | $142,445 | $203,395 |
| First 3 Months’ Rent | $15,000 | $25,000 |
| Security Deposit | $4,300 | $10,000 |
| Opening Inventory and Supplies | $12,000 | $20,000 |
| Training Expenses | $1,000 | $6,000 |
| Miscellaneous Opening Costs | $10,000 | $30,000 |
| Additional Funds - 3 months | $30,000 | $60,000 |
| ESTIMATED TOTAL (excluding real estate costs) | $264,745 | $534,395 |
| Type of Fee | Amount |
|---|---|
| Royalty Fee | 6.9% of net revenues. |
| Marketing Fund Contribution | 5% of net revenues. |
| Transfer Fee | $9,000 |
| Commingled Funds Fee | $2,500, plus $250 for each subsequent month until franchisees separately account for the funds. |
| Audit Fees | Cost of inspection or audit, plus any deficiency and late payment charges. |
| Interest Charges on Late Payments | Lesser of 21% per year or highest rate allowed by law. |
| AutoNet TV Fee | $40 per month, subject to periodic adjustment |
| Costs and Attorneys’ Fees | Will vary under circumstances. |
| Indemnification | Will vary under circumstances. |
| Customer Reimbursements | Up to 200% of original repair amount. |
| Service Charges | $25 to $100 |
| Service Charges for Specified Defaults | $100 per day. |
| Service Charges for Failure to Furnish Financial Statements | $25 per day. |
| Service Charge for Failing to Attend National or Regional Franchise Meetings | $2,500 per occurrence. |
| Resale Assistance Fee | $10,000 per Merlin shop. |
| Franchisee Profitability Program Software Fees | Currently, $14.95 per month. |
| M.Key Software Transfer Fee | $1,000 |
| M.Key Software Fees | $375 basic software maintenance fee (or, if franchisees purchase AutoVitals, $275). Fees apply for additional options. |
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