Ace Hardware Franchise Costs, Fees & FDD

Year Business Began: 1928

Franchising Since: 1928

Headquarters: Oak Brook, Illinois

Estimated Number of Units: 5,965

Franchise Description: The franchisor, Ace Hardware Corporation, is a wholesaler of hardware products, paint and other merchandise. The franchise offered is for the operation of a retail hardware store under the name “Ace Hardware.” In the United States Ace operates as a retailer-owned cooperative. If the franchisee’s application for membership is approved, the franchisor will grant franchisees membership in the cooperative under the terms of the membership agreement and upon their purchase of shares of the franchisor’s stock. This membership entitles the franchisee to purchase merchandise and services from the franchisor. Franchisees may offer rental services from their Ace store under the name “Ace Rental Place.” Franchisees may also own and operate an existing separate business, such as a grocery store, and add a freestanding Ace Hardware store to the existing business. The franchisor refers to this as its “grocery format.” Ace Hardware franchisees may not offer handyman services or other in-home services under any Ace trademark unless they have purchased a separate franchise from Ace Handyman Franchising, Inc. (Ace Handyman Services) or Ace Painting Franchising, LLC (Ace Hardware Painting Services).
Training Overview: The franchisor’s retail training department develops and delivers online training, virtual classroom training, and in person training conducted at its headquarters in Oak Brook, Illinois, as well as at selected regional locations, in stores and at its annual conventions. New investors who are opening their first Ace store must complete the New Owner Learning Plan training before opening their store. The franchisor’s Ace Learning Place online training platform has the training programs for owners, their management team and their associates. There are over 1,700 courses available to franchisees to train their team. The franchisor periodically schedules training sessions and seminars for individual retailers and retailer groups. The franchisor also provides training sessions and workshops on topics of interest to store owners and managers twice a year, at its spring and fall conventions.

Territory Granted: Franchisees will not receive an exclusive territory. Franchisees may face competition from other member stores, competitive brands, and/or from other channels of distribution. The franchisee’s membership is granted for the specific location of the store as stated in the Membership Agreement (non-branded) and Ace Brand Agreement.

Obligations and Restrictions: It is the franchisor’s general policy not to grant a membership unless the owner or one of the principal owners of the business participates personally and directly in its operation. The franchisor does not currently place any restrictions or limitations on whom franchisees may hire as managers, supervisors or other personnel to run the business. The franchisor generally does not restrict the types of goods and services that franchisees may offer. There are a few exceptions detailed in the FDD.

Term of Agreement and Renewal: There is no specified term length for the agreement. There are no fixed terms for renewal or extension.

Financial Assistance: The franchisor offers several loan and financing programs, see FDD for details. The franchisor is the lender for all these programs. The franchisor may sell or assign loans made under any of its loan or financing programs to a third party. Neither the franchisor nor its affiliates receive any payments for the placement of financing for its members or prospective members with any lender.

Estimated Initial Investment

Name of Fee	Low	High
Initial Franchise Fee – Affiliation Fee	$5,000	$5,000
Capital Stock Subscription	$5,000	$5,000
Initial Brand Assessment (advertising)	$6,000	$12,000
Local Lift Max Assessment	$6,500	$48,100
Exterior Signage	$10,000	$30,000
Leasehold Improvements: Store Planning, Interior Décor, Consolidated Fixtures, Furniture and Other Fixtures	$102,750	$200,850
Store Set Up Labor ($16 per sq. ft)	$48,000	$160,000
Equipment	$91,100	$138,100
First 3 Months’ Rent and Security Deposit	$21,000	$107,000
Prepaid Expenses: Dues, Permits, Subscriptions, Utilities (deposits may be refundable) and Other Prepaid Expenses	$3,000	$15,000
Opening Inventory	$210,000	$1,000,000
Initial Supplies	$3,000	$7,500
Insurance	$2,500	$30,000
New Investor Retail Training	$0	$38,000
Additional Funds—Working Capital for the First 90 Days	$90,000	$205,000
ESTIMATED TOTAL (start-up business – leased premises)	$603,850	$2,001,550

Other Fees

Type of Fee	Amount
Late Payment	0.77% of the past due bi-weekly billing statement balance.
Low Volume Service Charge	$100.00 per bi-weekly billing period if annual volume purchased is less than $200,000.
Freight Charge	The freight rate is billed as a fixed percentage of the franchisee’s warehouse purchases, adjusted annually.
Fuel Surcharge	A 0.25% fuel charge applies to all deliveries. The surcharge is adjusted (i.e., increased or decreased) weekly, 0.25% for every five-cent change (increase or decrease) in US, National Average price for diesel fuel.
Core Retail Services	$315.25 per month for all parent stores and $131.50 per month for each branch store. There will be a 2.5% increase in the core retail services fee each year.
Restocking Fees	Varies.
Regulatory	Varies by state and product (i.e., paint recycling fee).
Business Insurance	Will vary depending upon coverage purchased. Estimated annual cost of required coverage: $2,500 - $30,000.
Annual Brand Assessment	Store's first calendar year: $6,000 flat fee per store. Subsequent years: 2% of prior year purchases subject to minimum and maximum assessments.
Local Lift Max Assessment	Varies.
Computer Hardware and Software for Point of Sale System	$35,000 - $75,000
Computer Hardware and Software Maintenance	Franchisees will also incur charges for ongoing computer hardware and software maintenance services. Costs for these services will vary depending on the services selected by franchisees but are estimated to be $700 per month. If franchisees use a point of sale system from Epicor Software Corporation, they will also pay an additional $7.50 per payment device, per month, for transactional security (i.e. point to point encryption). If franchisees use a different point of sale vendor, the fee for point to point encryption will vary.
Store Planning Services	Minimum $7,000 flat fee for full services package. Additional fees will vary depending on project scope.
Ace Bankcard Program	$35 annual fee per store. A monthly non-qualified fee will be assessed to the franchisee’s statement based on card type and volume.
Customer Check Verification Service (Telecheck)	1% of face value of the customer’s check.
Ace Rewards Program	$850 initial fee; $75 per month, per store thereafter. Additional fees for direct mail per piece ($0.43 - $0.50) apply. Each participating store is required to participate in all mandatory promotions under the program.
Ace Gift Card Program	$41 - $67.50 for display and $30 for sign kit plus $0.35 per blank (inactivated) card stock. For stores using Epicor POS systems, there will be a $175 set up fee. If franchisees have another POS provider, there may or may not be additional fees. Cost will also vary depending upon the type of card, displays and accessories purchased. There is a 10% marketing fee per transaction for redemption on gift card mall gift cards.
Regional Advertising (optional)	Will vary depending on regional advertising programs.
Local Lift Program (optional)	Varies.
Digital and Other Marketing Services (optional)	Varies based on the services utilized.
Group Preprint Program (optional)	Price varies by page count and group participation. There is a minimum charge of $25 on all orders. For example, group pricing for an eight tab is $62.80 per thousand copies.
Digital Circular Program (optional)	$65 per month per store. $425 per month per store for advertising the digital circular.
Monthly Sign Kit Program (recommended)	$210 per month for full kit; $105 for mini kit.
Helpful Experience Program (Mystery Shop, Customer Engagement, Employee Engagement) (optional)	For each in-store buy online pick up in store and curbside mystery shop the fee is $48. For each phone mystery shop the fee is $17. Employee engagement and customer experience surveys are sold as a bundle for $30 per month.
Visual Merchandising Services	Price varies depending on project scope.
Ace Rental Place (optional)	Will vary depending upon the rental equipment offered, fixtures needed, maintenance/repair shop needs and any optional exterior signs selected. Cost of implementation ranges between $55,000 and $130,000.
Retail Loss Prevention (optional)	Will vary depending upon equipment or services utilized. Estimated cost range per service: $500 - $6,000. Cost estimates do not include expenses for meeting rooms, travel, lodging, meals or tax where applicable.
Training Programs (Pre-Opening and Continuing)	The cost will vary depending upon the type of training, duration, and location of sessions. Price does not include expenses for meeting rooms, travel, lodging, meals, or tax where applicable.
SAVINGSource (optional)	Will vary depending on services utilized.
Mango Report (optional)	$50 per month (single or main store); $45 per month each additional store.
Business to Business (optional)	Will vary depending upon implementation method, marketing material and signage purchased to promote business to business.
National Accounts Program (optional)	Varies by account.
Ace Handyman Services Rebate Program	Varies. Member funds a 10% rebate on items less than $49.99 or less purchased by Ace Handyman Services franchise owners.
Liquidated Damages	$10,000 per month.
Costs and Attorney’s Fees	Will vary under circumstances.
Indemnification	Will vary under circumstances.

The above information has been compiled from the FDD of Ace Hardware. Year of FDD: 2025.
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