Franchising
Financial Requirements To Franchise
Like most investment opportunities, there are requirements and other necessary qualifications to review before deciding if the investment is right for you. Here are some initial details to get you started.
Startup Costs
| Typical Range | ||
| Land (1) | $650,000 - $850,000 | |
| Building & Site (1) | $800,000 - $1,200,000 | |
| Equipment, Signs, Furnishings (1) | $200,000 - $320,000 | |
| Organization, Loan Origination & Professional Fees | $70,000 - $110,000 | |
| Sub-Total | $1,720,000 - $2,480,000 | |
| Soft Costs | ||
| Franchise Fee* (2) | $35,000 | |
| Pre-Opening (3) | $2,000 - $5,000 | |
| Opening Advertising (4) | $10,000 | |
| Working Capital (5) | $63,500 - $143,500 | |
| Opening Inventory (6) | $32,500 - $42,500 | |
| Sub-Total | $143,000 - $236,000 | |
| Total | $1,863,000 - $2,716,000 | |
Franchise Fees
When an Express Oil Change & Tire Engineers franchise candidate signs their first single-store Franchise Agreement – or multi-store Area Development Agreement – to become an operator-franchisee, the candidate pays an IFF (Initial Franchise Fee) of $50,000. Other notables include:
IFF for subsequent locations is $25,000 (first location is $50,000)
Franchise Agreement Term is 10 years
No fee charged on Agreement renewals
Monthly royalty will be 5% of gross sales
Franchisees are expected to spend 3% of gross sales on marketing
Franchisee Qualifications
We require the following financial and educational qualifications:
Liquid Capital: $350,000+ (cash or assets that can be converted to cash within 30 days)
Net Worth: $550,000+ (assets, minus liabilities)
Minimum Education: High School Diploma
In addition, we seek candidates who possess certain personal characteristics, such as:
Passion for delivering a great customer experience
Business interest with proven ability to manage people
Strong interpersonal skills to work with customers and manage store staff
Professional, enthusiastic and high-energy
Goal and growth orientation
Initiative to build your own business and the desire to make it succeed
Entrepreneurial attitude, while understanding importance of following brand standards
Partnerships
It is very common for franchise candidates to form partnerships in order to attain the resources necessary to launch and operate the Express Oil Change & Tire Engineers business. Below are a few examples of how this may look:
Franchisee candidate who intends on working the business day-to-day as the Operating Partner needs additional capital, so the candidate finds an investing partner who can bring the financial strength to the project.
Investor with significant financial resources may be unable to dedicate the time necessary to operate the business on a daily basis, so they look for an Operating Partner to help run the day-to-day business.
In either situation, it’s the combined liquid capital and net worth of the partners that is reviewed during our team’s review of any prospective franchisee.
Financing Options
The initial cash needed to start the business is typically between $300,000-$450,000, with the remainder of the initial startup costs being financed.
While these ranges can be impacted by the decision to buy or lease the land, as well as the type of financing, we do not offer in-house financing. However, we do have relationships with many active lenders that we can put you in touch with!
(1) The amounts set forth above for land, building and site work, and equipment include the cost of purchasing a 25,000 to 35,000 square foot site in a commercial or retail area and constructing a 6 to 9 bay facility on property which has all utilities to the site and does not require any excessive site preparation. The actual costs will vary materially depending on location, size and condition of lot, size of building and other factors. Many existing buildings (former service stations, automotive service centers, etc.) have been successfully converted at lower costs.
(2) The initial franchise fee is $35,000 for your first unit, and $17,500 for any additional unit. Initial Franchise Fee is payable in a lump sum due at signing and is uniform to all franchisees currently purchasing a franchise.
(3) Amount set forth above for pre-opening include (a) the manager's and assistant manager's salaries during pre-opening; (b) payroll costs of the crew for pre-opening training; and (c) costs of transportation, lodging, and meals during the training at the franchisor's headquarters. Also includes amounts for change fund, utility deposits, uniforms and other discretionary purchases.
(4) Amount set forth covers the requirement under the franchise agreement for grand opening promotions.
(5) Amounts set forth above are for working capital and normal early operating losses.
(6) Standard new store inventory startup to include 100 tires at a laid in cost of $100 per tire.
*There are no other direct or indirect payments in connection with the purchase of the franchise.