1-800-Radiator Franchise: Revenue, Costs & Profits (2023)

With more than 200 locations in the US, 1-800-Radiator is one of the largest auto parts distributor franchise in the country. Unlike other car servicing franchises, as a distributor 1-800-Radiator is an attractive franchise with a simple yet efficient business model.

As a franchisee you would have to invest initially $852,000 to open a new location. Also, one shop makes on average $1,460,000 in turnover per year. But what about the profits?

In this article we are looking at 1-800-Radiator and its Franchise Disclosure Document to find out all you should know about this franchise: how much it really costs, how profitable it really is, and whether it’s a good investment. Let’s dive in!

Key stats

Franchise fee	$45,000
Royalty fee	8.0%
Marketing fee	2.0%
Investment (mid-point)	$852,000
Average sales	$1,460,000
Sales to investment ratio	1.7x
Payback period	12 years
Minimum net worth	$500,000
Minimum liquid capital	$150,000

What is 1-800-Radiator?

1-800-Radiator is a leading auto parts distributor based in Benicia, California.

The company was founded in 1985 by Kalani Keala and Kyle Marshall and supplies auto parts, including radiators, mirrors, car lights, condensers, fuel pumps, fan assemblies, rebuild transmissions, bumpers, OEM rims, wheels and crate engines to clients in the US and beyond.

The auto parts distributor is a subsidiary of Driven Brands LLC and started franchising in 2001.

Today, 1-800-Radiator operates in more than 200 locations in the US.

1-800-Radiator franchises 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 much does a 1-800-Radiator franchise cost?

On average, the initial investment required to open a 1-800-Radiator franchise is $852,000, which includes a franchise fee of $45,000.

This investment is lower than the average investment required for other automotive franchises, which typically ranges from $600,000 to $1,200,000.

However, it’s worth noting that the investment amount can vary depending on factors such as the franchise location, size, and other factors. According to the latest Franchise Disclosure Document, the investment ranges between $458,000 and $1,246,000.

Startup costs

The investment covers all the startup costs needed to start an A/C kit shop franchise. You must pay the franchisor an initial franchise fee of $45,000. In addition to this franchise fee, the investment also covers:

• Formation Costs: lease deposit, warehouse equipment package, training expenses, etc.
• Initial Marketing: opening marketing package
• Operating Costs: opening inventory, first 3 months rent, working capital, etc.

Type of Expenditure	Low	High
Initial Franchise Fee	$45,000	$45,000
Formation Costs	$76,500	$172,000
Initial Marketing	$30,000	$30,000
Operating Costs	$306,000	$999,000
Total	$457,500	$1,246,000

How much revenue does a 1-800-Radiator franchise make?

On average, a 1-800-Radiator franchise generates $1,460,000 in revenue per year.

Here’s the breakdown of revenue by quartile, in 2021, for the 188 franchised-owned shops as disclosed in the Franchise Disclosure Document:

How profitable is a 1-800-Radiator franchise?

A 1-800-Radiator franchised shop makes on average $238,000 in profits per year. That’s a 12% EBITDA margin, as disclosed in the Franchise Disclosure Document 2022.

Note that 1-800-Radiator 12% EBITDA margin is in line with the automotive franchise industry (10-15% EBITDA margin as per our own benchmarks).

Profit and loss	Amount	% revenue	Source
Revenue	$1,966,593	100%	as per FDD
COGS	$(1,047,769)	53%	as per FDD
Gross Profit	$918,824	47%	as per FDD
Staff	$(297,798)	15%	as per FDD
Royalties	$(199,822)	10%	as per FDD
Occupancy	$(49,231)	3%	as per FDD
Marketing	$(51,694)	3%	as per FDD
Other operating costs	$(81,807)	4%	as per FDD
EBITDA	$238,472	12%

Is 1-800-Radiator a good franchise investment?

Is it worth investing in 1-800-Radiator franchise? As a franchisee indeed you would have to fund a significant amount of money upfront (the $852,000 discussed earlier). Is this worth the expected profits you can make with the business?

We found that 1-800-Radiator has a 12 years payback period on average, meaning you would reimburse creditors and investors within 12 years on average after investing. Whilst it’s not necessarily bad, it’s not the best payback we found for a car servicing and automotive franchise (8 years on average).

Keep in mind this is purely an average, calculated using the performance (revenues and costs) of all franchises as disclosed in the FDD. Therefore, it’s possible your business performs better than the average, but the opposite is also true.

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