1-800 Radiator franchise Costs $458K – $1.3M (+ 2024 Profits)

1-800 Radiator & A/C, established in 1983 and headquartered in Benicia, California, is a key player in the automotive aftermarket industry. As part of the Driven Brands portfolio, the company has developed a robust franchise model that leverages cutting-edge technology and comprehensive inventory systems to distribute auto parts such as radiators, air conditioning components, fan assemblies, and more across the United States.

The franchise differentiates itself significantly from competitors through its technological integration. By employing a sophisticated proprietary software system, 1-800 Radiator & A/C enables franchisees to manage inventories more effectively, optimize sales and marketing strategies, and maintain competitive pricing.

This system not only ensures that necessary parts are available for rapid delivery but also supports franchisees with customer relationship management (CRM), which is instrumental in sustaining strong business relationships with a wide network of automotive repair shops and parts stores.

Type of Expenditure	Amount
Initial Franchise Fee	$45,000
Start-Up Warehouse Equipment and Supplies	$42,000 – $65,000
Opening Marketing Package	$30,000
Travel and Living Expenses While Training	$2,500 – $5,000
Lease Deposit	$2,000 – $15,000
Delivery Vehicle	$5,000 – $35,000
Miscellaneous Opening Costs	$25,000 – $75,000
Opening Inventory	$250,000 – $800,000
Rent for first 3 months	$6,000 – $49,000
Additional Funds – 3 months	$50,000 – $150,000
Total Estimated Initial Investment	$458,000 – $1,269,000

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Initial Franchise Fee

For each franchise, the initial franchise fee is $45,000, payable upon signing the Franchise Agreement. This fee is fully earned when paid and is non-refundable.

Royalty Fee

Franchisees are required to pay a Royalty Fee of 8% of Gross Sales every week.

Marketing Fee

Franchisees must pay a System Marketing Fee of 1.5% and a Local Marketing Fee of 0.5% of Gross Sales, collected weekly. These fees support national and local marketing efforts respectively.

Transfer Fee

A Transfer Fee of $15,000 is required before the transfer of the franchise.

Renewal Fee

The Renewal Fee is $10,000, payable before the franchise is renewed, covering necessary legal and accounting services.

Franchise pros and cons

The Pros:

• Fast delivery: superior same-day delivery puts the company ahead of the competition. The franchisor stocks everything to ensure local clients get whatever they need within 2-3 hours of ordering. 
• No heavy investment in a building is required: a simple, low-cost business model that requires about 3,000-5,000 square foot space to operate. Franchisees can set up their franchises in industrial parks and run their businesses successfully without investing in large, expensive buildings.
• New products: the franchisor has expanded its product line to include exhaust, fuel and heavy-duty items, to mention a few. The new product catalog expands the customer base, leading to upward growth.
• Support: the franchisor provides comprehensive support through a dedicated corporate staff to ensure franchisees understand the business operations. New franchisees receive extensive support on market operations and how to establish successful, long-term relationships with clients.
• An integrated proprietary software: the franchisor provides fully integrated proprietary software to help franchisees source products from countless manufacturers, fine-tune the inventory and market and provide superior quality.
• No mandatory automotive background: the franchisor uses a system designed for anyone, so franchisees don’t need knowledge of automotive parts and vehicles to run thriving businesses.
• Training: mandatory training before starting a franchise. In addition, store owners attend an annual conference for franchisees and their employees to discuss operational concerns and business issues affecting their warehouses.
• Exclusive territory protection: the franchise agreement provides exclusive territory rights, protecting franchisees from competition against other 1-800-Radiator franchises.

The Cons:

• No absentee ownership:  franchise owners get involved in the day-to-day business operations.
• No part-time investment: 1-800-Radiator doesn’t allow part-time ownership.
• Can’t run from home/as a mobile unit: franchisees must operate within the designated warehouses.
• Competition from similar car servicing franchises such as Meineke, Midas, Carstar or Christian Brothers Automotive just to name a few.

How to open a 1-800 Radiator franchise

Opening a 1-800-Radiator franchise involves several steps, designed to ensure you are a good fit for the franchise. Here are the main steps to follow to open a 1-800-Radiator franchise.

1: Research the Franchise

• Understand the Business Model: Familiarize yourself with what 1-800 Radiator & A/C offers, how it operates within the automotive parts industry, and its unique selling points like their inventory management and delivery systems.
• Evaluate Market Potential: Assess the demand for auto parts in your area and consider the local competition to determine if a 1-800 Radiator & A/C franchise would be viable.

2: Initial Inquiry

• Contact the Franchisor: Reach out to 1-800 Radiator & A/C to express your interest and request more detailed information about the franchise opportunity.
• Review Franchise Disclosure Document (FDD): Once you receive the FDD, review it thoroughly. This document provides essential details about the franchise, including the financial performance of existing units, fees, and legal obligations.

3: Financial Assessment

• Financial Planning: Ensure you meet the financial criteria specified by the franchisor, which includes having the necessary net worth and liquid capital.
• Secure Financing: If needed, arrange financing through banks or other financial institutions. The franchisor may offer guidance or recommendations for financing options.

4: Formal Application

• Submit Application: Complete the franchise application form to formally apply for a franchise unit. This will likely require personal and financial information to demonstrate your capability to run the franchise successfully.
• Interview: Participate in interviews or discussions with the franchisor. This is an opportunity for both parties to ask questions and evaluate the potential fit.

5: Training and Setup

• Undergo Training: Attend training sessions provided by 1-800 Radiator & A/C, which will cover operational procedures, use of the proprietary software, and best practices for managing and growing your franchise.
• Site Selection and Establishment: Choose a suitable location for your franchise with the franchisor’s approval and begin setting up your shop with the necessary inventory and tools as guided by 1-800 Radiator & A/C.

Disclaimer

Disclaimer: This content has been made for informational and educational purposes only. We do not make any representation or warranties with respect to the accuracy, applicability, fitness, or completeness of the information presented in the article. You should not construe any such information or other material as legal, tax, investment, financial, or other professional advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, advertisement, or offer to buy or sell any franchises, securities, or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the franchise and/or securities laws of such jurisdiction.

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