AAMCO Franchise Costs, Fees & FDD

Year Business Began: 1963

Franchising Since: 1963

Headquarters: Horsham, Pennsylvania

Estimated Number of Units: 550

Franchise Description: The franchisor is AAMCO Transmissions, LLC. The franchise offered is for a transmission and general automotive repair center under the AAMCO brand. AAMCO centers sell transmission repair services, as well as additional automotive maintenance and repair services the franchisor then currently authorizes, such as oil and filter changes, brake services, heating and cooling system service, tune-ups, steering and suspension, factory-recommended maintenance, and related services, to the general public on both a retail and wholesale level.

 
Training Overview: Franchisees of a new center must attend AAMCO's “Operator's Training School” at AAMCO University before they open the center for business. AAMCO’s four-week Operator’s Training School includes intensive training in the operation of an AAMCO center, including management skills and methods, and does not teach mechanical skills. The franchisor conducts AAMCO University in Newnan, Georgia or another suitable location it may designate. For franchisees who are new to the AAMCO system, during the first quarter after they open their center, the franchisor will provide an intensive five-week business coach training program at their AAMCO center for them and their staff. Business coach training includes training in personnel recruiting, policies and procedures, computer training and set-up, center marketing; manager training; customer relations; accounting procedures; vendor establishment; and other topics relating to an AAMCO center. While franchisees are responsible for hiring their employees, the franchisor will assist franchisees in recruiting a customer service manager (CSM) and technicians for the center. Any CSM appointed for the center must attend AAMCO’s one-week training program. The franchisor may require that franchisees attend additional training courses. The franchisor will determine whether or not a franchisee has to attend additional training based on the effectiveness of his or her compliance with AAMCO's policies and procedures.

Territory Granted: The franchisor grants franchisees a license for the operation of one AAMCO center located within a specific statistical area defined by the U.S. Office of Management and Budget. Franchisees do not receive, and the franchisor does not grant, them an exclusive or protected territory or trading area. While the franchisor maintains the right to establish additional company-owned, affiliate-owned or franchisee-owned AAMCO centers in the same statistical area as a center, the franchisor limits the number of centers it will authorize to a maximum of one center for each 100,000 motor vehicle registrations in the statistical area.

Obligations and Restrictions: The franchisor strongly encourages that franchisees participate personally in the direct “on-premises” management and operation of the AAMCO center. Franchisees must hire only those employees who, after appropriate screening, demonstrate themselves to be honest and dependable. Franchisees may hire a customer service manager for the AAMCO center, and he or she must satisfactorily complete the customer service manager training and any other retraining the franchisor requires. If requested by the franchisor, the customer service manager must sign a confidentiality agreement by which he or she agrees to maintain confidentiality of trade secrets and proprietary information. While some AAMCO franchisees, with the franchisor’s advance written approval, have other business interests, franchisees must maintain a regular and reasonably consistent schedule of being “on-premises” to personally manage the day-to-day operations and development of the business of the center. The franchisor requires that franchisees offer and sell only those goods and services that the franchisor has approved. Franchisees must offer all goods and services that the franchisor designates as required for all franchisees. Franchisees cannot operate any other business at the location of the AAMCO center.

Term of Agreement and Renewal: The length of the initial franchise term is 15 years from the signing of the Franchise Agreement. If requirements are met, the Franchise Agreement will automatically renew for an additional 15 years unless the franchisor receives notice of non-renewal from the franchisee or provides the franchisee with notice of its intent not to renew, at least one year before termination of the current franchise term.

Financial Assistance: The franchisor does not offer direct or indirect financing, and it does not guarantee a franchisee’s note, lease, or obligation. The franchisor may facilitate an introduction to potential lenders through an authorized vendor of a lender-matching software platform, but it cannot determine whether franchisees will be able to obtain third-party financing for all or any part of their investment.

Estimated Initial Investment

Name of Fee	Low	High
Initial License Fee (including credit of application fee received under Deposit Agreement)	$39,500	$39,500
Business Coach Training	$10,000	$10,000
Grand Opening Advertising Expenses	$5,000	$5,000
AAMCO Security Deposit	$5,000	$5,000
Travel Expenses for Training Program	$2,000	$4,000
Real Estate & Utility Deposits	$14,000	$43,000
Leasehold Improvements	$9,700	$16,700
Signs (including in Center Opening Package)	$7,500	$33,000
Shop Equipment, Supplies, Lifts & Installation (included in Center Opening Package), plus freight & taxes	$78,400	$98,000
POS System – Acquisition	$2,500	$2,500
POS System – 3 months Access/Support	$500	$500
Computer and Phone System – Hardware	$6,500	$10,000
Office Furniture	$5,500	$7,000
Sales Materials	$500	$1,000
Miscellaneous Costs & Professional Fees (Legal and Accounting Advice, Personnel Recruitment, etc.)	$4,000	$10,000
Insurance	$1,500	$2,500
Advertising Costs (13 weeks)	$4,700	$13,500
Additional Funds (3 months)	$40,000	$60,000
ESTIMATED TOTAL	$236,800	$361,200

 
Other Fees

Type of Fee	Amount
Royalty (Franchise) Fee	7.5% of total gross receipts.
National Creative Advertising Fee	$150 per month.
Local Advertising	Greater of 4% of weekly gross receipts or $400/week (or 5% of gross receipts or $500 in top 20 markets), inclusive of pool dues ($200 - $876/week; pool average $550/week) for active pools, where applicable.
Internet Directories	$23.10 per quarter for yp.com platinum ad.
Web Page Fee(s)	Annual cost of third party URL provider, plus $35/year processing fee.
1-800-GO-AAMCO	$125 initial connection, plus $0.25/minute per call in U.S. (or $0.55/minute in Canada).
National Advertising Brand Awareness Program	$30 per month.
Remote Call Forwarding Telephone Numbers	About $400/year for 1 number, plus adjustable usage fees at about $0.06/minute.
POS System Software – Initial License	$2,499
POS System Software – Support	$149/month, plus tax.
Express Cash Processing Fee	1.38% of central billed, national fleet account approved repair order amount (amount subject to change based on prime rate and number of participating centers).
Recruiting Requisition Fee	$250 per requisition.
Reputation Management Fee	$50 per month.
Intershop Warranty Work	Other center’s costs incurred for warranty work (parts plus labor).
Indemnification	Will vary under circumstances.
Unauthorized Telephone Number Transfer Charge	$250 per day.
Interest	18% per year (1.5% per month).
Late Fees	$100 per week per late report.
Bank Fee	$65 per transaction.
Audit	Costs of audit, plus 3 times amount of underpayment, plus interest on underpayment.
Transfer Fee	$6,000

The above information has been compiled from the FDD of AAMCO. Year of FDD: 2024.

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