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Midas FranchiseCosts $104K – $886K (2024 Fees & Profits)

Midas, a well-known name in the automotive service industry, was founded on April 20, 1956, by Nate H. Sherman. Originally established as the Midas Muffler chain in Macon, Georgia, the company quickly built a reputation for quality service, focusing initially on muffler replacements. Over the years, Midas has expanded its services to include comprehensive auto care, offering brake repair, scheduled maintenance, oil changes, tire services, and more.

Headquartered in Palm Beach Gardens, Florida, Midas operates over 2,100 locations across the United States, Canada, and other countries. The franchise network includes both company-owned and franchised locations, reflecting its robust and flexible business model. Midas began franchising soon after its inception, leveraging its strong brand recognition and reliable service standards to attract franchisees.

Midas differentiates itself from competitors through its long-standing commitment to customer satisfaction and comprehensive support for franchisees. The brand is known for its iconic slogan, “Trust the Midas Touch,” which underscores its promise of quality and reliability. Midas franchisees benefit from extensive training, marketing support, and a proven business model, allowing them to provide top-notch automotive services to their communities.

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Initial investment

Type of ExpenditureLow Estimate (NEW 8-Bay MIDAS SHOP)High Estimate (NEW 8-Bay MIDAS SHOP)Low Estimate (Conversion)High Estimate (Conversion)
Initial Franchise Fee, Minimum Site Payment, or Deposit$10,000$35,000$10,000$35,000
Marketing Support Program or Other Grand Opening Advertising$20,000$25,000$20,000$25,000
Travel & Living Expenses while Training$1,000$7,800$1,000$7,800
Security Deposit, Licenses & Permits$0$40,000$0$40,000
Rent and Real Estate Taxes (3 months)$15,000$60,000$15,000$60,000
Warranty Registration Fee (3 months)$150$2,000$150$2,000
Equipment & Tools$52,500$375,000$0$375,000
Shipping and Installation Costs – Equipment$5,000$40,000$0$40,000
Computer, Hardware & Telephone System$10,000$13,000$10,000$30,000
Office & Waiting Room Furniture & Point of Purchase Materials$10,000$30,000$2,000$13,000
Branding$10,000$40,000$0$40,000
Shipping and Installation Costs – Signage$5,000$25,000$0$25,000
Initial Inventory & Supplies$25,000$100,000$0$100,000
R.O. Writer Software, Installation, and Training Fees$0$12,500$0$12,500
R.O. Writer Software Maintenance Fee (3 months)$0$1,200$0$1,200
Smart eCat Epicor Parts & Labor Guide Subscription (3 months)$0$390$0$390
Insurance (3 months)$1,500$4,500$1,500$4,500
Legal & Accounting$1,000$3,500$1,000$3,500
Additional Funds (3 months)$40,000$65,000$40,000$65,000
Miscellaneous$3,000$5,000$3,000$5,000
TOTAL ESTIMATED INITIAL INVESTMENT$209,150$884,890$103,650$885,640

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.

Franchise fees & Royalties

Initial Franchise Fee

The initial franchise fee is $35,000. However, there are lower fees for converting existing independent automotive businesses and for certain incentive programs, which can reduce this fee to $17,500 or waive it entirely under specific conditions.

Royalty Fee

The royalty fees for Midas range between 2% and 10% of net sales, payable monthly based on the previous month’s gross sales.

Marketing/Advertising Fee

Franchisees are required to participate in the Marketing Support Program. This involves a mandatory contribution of $20,000 for consumer-targeted advertising, merchandising, public relations programs, and other marketing activities intended to benefit the franchised unit directly, such as grand opening activities. This fee is paid upon signing the franchise agreement or upon receiving approval for the site location. Additionally, Midas contributes an amount equal to $10,000 to the grand opening activities.

Technology Fee

Technology fees are specified in the franchise agreement and cover the costs associated with maintaining and updating Midas’s technology systems. The exact amounts vary based on the specific services and support provided.

Transfer Fees

The transfer fee is the greater of $5,000 or 15% of the initial franchise fee for franchise agreements dated April 1, 2010, or after. For agreements dated before that, the fee is 0.5% of the business’s sales price (excluding real estate), with a cap for multiple shop transfers.

Renewal Fees

The renewal fee is one-half of the initial franchise fee, currently set at $5,000. Additional funds may be required for shop renovations or relocations as a condition of renewal.

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Franchise pros and cons

Pros

  • Comprehensive training and coaching: Midas provides its franchisees with a detailed training program to establish and build successful businesses. Franchisees are trained about the business concept, products and services, inventory control, and staff management. Also, it offers them a grand opening and ongoing training.
  • Multiple revenue streams: Midas has established a variety of channels to help its franchisees offer excellent services while boosting their earnings. These include automotive services, tire installation, and sales, and fleet services.
  • Site selection and construction: The brand helps its franchisees with site selection to identify the right location for their centers. This includes site approval, lease negotiations, development, merchandising, and inventory management.
  • Marketing and advertising: The brand provides its franchisees with effective marketing tools and resources to reach a wider geographical area. These include national and local campaigns, social media, email marketing, ad templates and loyalty program apps.
  • Flexible designs: The franchisor utilizes modern and simple franchise designs, providing franchisees with the opportunity to convert their existing automotive businesses into Midas centers at a lower cost.
  • Extensive corporate and ongoing support: Midas provides them with ongoing support, periodic performance reviews, safety and security procedures, conventions, and field operations.
  • Third-party financing: Midas has established third-party relationships to provide its franchisees with funding for the franchise fee, startup costs, and ongoing costs.

Cons

  • No exclusive territory protection: Franchisees do not receive the rights to operate in an exclusive territory or market. They may face competition from franchisees granted by the franchisor or from competitive channels it controls.
  • Not a part-time business: The franchise cannot be operated on a part-time basis. Franchisees must keep their centers operating full-time.
  • No absentee ownership: A Midas franchise does not present a part-time business. Franchisees are actively involved in the decision-making and running of their businesses.
  • Not a home-based business. The franchise cannot be operated from home or a mobile unit. Franchisees need a retail facility, office space or a warehouse.
  • Competition: Top competitors include Jiffy Lube, Meineke and Pepboys.

How to open

1. Research and Evaluate the Midas Franchise Opportunity

  • Understand the Brand: Familiarize yourself with the history, services, and reputation of Midas.
  • Review Financial Requirements: Ensure you meet the initial investment range, franchise fees, and liquidity requirements.
  • Assess Market Potential: Analyze the demand for auto repair services in your target location.

2. Submit an Inquiry

  • Contact Midas: Reach out via their franchising website or contact information provided to express your interest.
  • Complete Preliminary Application: Provide basic information about yourself and your business background.

3. Initial Screening and Qualification

  • Financial and Background Check: Midas will perform an evaluation of your financial standing and business history.
  • Franchise Disclosure Document (FDD): Review the FDD provided by Midas, which includes detailed information about the franchise.

4. Attend Discovery Day

  • Visit Headquarters: Attend a Discovery Day event at the Midas headquarters.
  • Meet the Team: Engage with the corporate team, ask questions, and learn more about the franchise operations and support.

5. Secure Financing

  • Explore Financing Options: Determine the best way to fund your franchise, whether through personal savings, loans, or other financing options.
  • Finalize Financing: Secure the necessary funds to cover the franchise fee, initial investment, and working capital.

6. Sign the Franchise Agreement

  • Legal Review: Have your attorney review the franchise agreement to ensure you understand all terms and conditions.
  • Execute Agreement: Sign the franchise agreement and pay the initial franchise fee.

7. Site Selection and Build-Out

  • Choose a Location: Work with Midas’s real estate team to select an optimal location for your franchise.
  • Site Development: Develop and build out your site according to Midas’s specifications and guidelines.

8. Training and Pre-Opening Preparations

  • Comprehensive Training: Participate in Midas’s training program, covering operations, marketing, customer service, and technical skills.
  • Hire Staff: Recruit and train your team with the support of Midas’s resources.
  • Marketing Plan: Implement pre-opening marketing strategies to create awareness in your community.

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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