Maaco Franchise Costs $276K – $1.0M (+ 2024 Profits)

Maaco, a prominent name in the auto paint and collision repair industry, began its operations in 1972. The franchise has grown significantly throughout the United States and Canada, with its headquarters in Charlotte, North Carolina.

This extensive growth began the same year it was founded, as Maaco started offering franchise opportunities in 1972, demonstrating a strong business model right from its inception.

Maaco sets itself apart in the automotive aftercare market by offering comprehensive services that include auto painting and collision repair. The company prides itself on its capacity to deliver affordable and high-quality services, which have been refined over decades of operation.

Type of Expenditure	Amount
Initial Franchise Fee	$45,000
Initial Training and Opening Fee	$7,000 for 1 person ($2,500 for each additional attendee)
Initial Advertising Contribution	$20,000
Living Expenses During Training	$3,000 to $4,000
Equipment, Signage and Initial Computer Hardware	$62,000 to $240,000
Opening Inventory and Supplies	$15,000 to $25,000
Construction, Design, Tenant Improvements and Miscellaneous Start-Up Costs	$75,000 to $600,000
Additional Funds – 3 Months	$50,000 to $75,000
Total	$276,000 to $1,016,000

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

The initial franchise fee varies based on the number of centers developed: $45,000 for the first center, $22,500 for the second center, and $20,000 for the third and each subsequent center.

Royalty Fee

Franchisees pay a royalty fee of 9% of gross receipts normally, and 4% of gross receipts for the first 6 months if developing a new Maaco Center.

Marketing/Advertising Fee

Weekly marketing fees are $1,000 or an amount equal to the weekly marketing budget of franchisees in your designated market area, whichever is greater.

Technology Fee

Franchisees are charged a technology fee of $539 per month for Multi Shop Operators and $599 per month for Single Shop Operators.

Transfer Fee

The transfer fee is $2,500 plus $250 for each subsequent month until funds are separately accounted for.

Renewal Fee

The renewal fee for continuing the franchise agreement is set at $2,500.

Franchise pros and cons

The Pros:

• Comprehensive training program: The franchisor offers a detailed training and education program to its franchisees in the operation and management of their centers. In addition, it trains them in the best management practices and facilitates their launch.
• Extensive ongoing support and assistance: Franchisees get access to continuous professional coaching and a network of successful business partners.
• Territory protection: The franchisor allows its franchisee to operate in a protected area. It does not license any other franchise to operate in the agreed location or establish competing brands.
• Site selection assistance: The franchisor provides its franchise owners with site selection guidance to identify a viable location for their centers. Also, it helps them with lease negotiations, digital ads, designs and construction.
• Financial assistance: Maaco has established relationships with third-party lenders and other financing methods such as SBA loans, equipment leasing, seller financing (conversions), borrowed funds and 401(k) rollovers to provide franchisees with funding. 
• Marketing support: Maaco provides its franchisees with robust marketing and advertising tools and techniques such as national media, regional advertising, loyalty programs, targeted local market promotions, email marketing and social media.
• Flexible franchise designs: The brand allows its franchisees a variety of models to choose from, including building new centers or converting their existing repair centers into Maaco franchises. Franchisees can get started with low costs and improve their profits.
• Diverse revenue streams: The franchisor offers its franchisees a variety of revenue streams to attract more customers and improve revenues. These include spot repairs, retail painting and fleet services.

The Cons:

• No absentee ownership: The franchise does not present a passive business opportunity. Franchisees must be actively involved in decision-making and the operations of their businesses.
• Not a home-based business: The business cannot be run from home or a mobile unit. Franchisees must have an office space, warehouse or retail facility to operate from.
• Not a part-time business: Maaco franchises cannot be run as a part-time business or side business.
• Competition: May include Carstar, Meineke, and Gerber Collins.

How to open A Maaco franchise

Opening a Maaco 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 Maaco franchise.

1. Assess Your Eligibility and Financial Requirements

• Understand financial commitments: You’ll need to meet certain financial requirements, including a minimum net worth and available liquid capital. This ensures you have the resources needed for startup costs and operations.
• Review qualifications: Maaco looks for franchisees who have business acumen, leadership skills, and the ability to manage teams effectively, even if they do not have direct experience in auto repair.

2. Submit an Inquiry and Application

• Initial contact: Fill out an inquiry form on Maaco’s franchise website to express your interest.
• Application process: After your initial inquiry, you’ll be asked to complete a formal application providing detailed information about your financial status, background, and business experience.

3. Attend Discovery Day and Meet Franchise Representatives

• Discovery Day: This is an opportunity to visit Maaco’s headquarters, meet with key franchise executives, and gain a thorough understanding of the business model.
• Interaction: Use this time to ask questions and interact with current franchisees to get a realistic view of the daily operations and the support system provided by the franchisor.

4. Review Franchise Disclosure Document (FDD)

• Detailed information: The FDD provides extensive information about the franchise, including fees, the legal and financial history of the franchisor, and contractual obligations.
• Legal review: It’s advisable to have a lawyer who specializes in franchise law review the FDD with you to ensure you understand all aspects of the investment and commitment.

5. Secure Financing

• Funding options: Determine how you will finance your franchise. This could include personal savings, bank loans, or financing through Maaco’s approved lenders.
• Budget planning: Ensure you have adequate funds not only for the initial setup but also for ongoing operations until the business becomes profitable.

6. Find a Suitable Location

• Site approval: Maaco will help you select an optimal location based on demographic studies and traffic patterns to maximize your shop’s exposure and potential customer base.
• Lease negotiations: Maaco’s real estate team may assist in negotiating the terms of the lease to ensure it aligns with business projections.

7. Training and Setup

• Comprehensive training: Attend Maaco’s training program, which covers all aspects of operations, from technical skills in auto painting and body repair to business management and customer service.
• Setup assistance: Maaco provides guidance in setting up your shop, including advice on purchasing the right equipment and setting up the layout of your business according to their established standards.

Disclaimer

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