Midas Franchise: Profits Worth the $541K Cost? (2023 Stats)

This article was updated with the 2023 Franchise Disclosure Document

With close to 1,000 franchised-owned service centers across the US, Midas is undeniably one of the leading car repair and service franchise in the country today. So if you’re looking to get into the car repair franchise industry, Midas is an obvious alternative. But is this a profitable business?

You would invest on average $541,000 to open a new Midas franchised service center. In comparison, one Midas franchise generates on average $1,080,000 in turnover per year. Sounds like a great business? What about the profits?

In this article we are looking at Midas franchises and the latest Franchise Disclosure Document to answer questions like: how much does it really costs? Or how profitable is it really? Let’s find out!

Key stats

Franchise fee$35,000
Royalty fee10.00%
Marketing fee6.00%
Investment (mid-point)$541,000
Average sales$1,080,000
Sales to investment ratio0.4x
Minimum net worth$250,000
Minimum liquid capital$75,000
Source: FDD 2023

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About Midas

Midas is an American chain of automotive maintenance and service centers headquartered in Palm Beach Gardens, Florida.

The chain was founded in 1954 by Nate H. Sherman in Macon, Georgia.

Its centers sell and install motor vehicle exhaust systems, brake components, suspension parts, heating and cooling system parts, tires, batteries and other motor vehicle parts. Also, they perform general and scheduled vehicle maintenance services.

Midas began franchising in 1956 and currently has over 1,900 locations, with 973 franchises in the US.

Midas 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.

Midas franchise costs

You would have to invest, on average, $547,000 to open a new Midas franchise shop.

Note that this is the investment required to open a new 8-bay Midas Shop. ​​Indeed, there are 2 types of formats you can choose from to open your Midas body shop, either a new body shop or a reconversion instead:

  • New shop (8-bay): $547,000
  • Convert an operating automotive repair facility: $495,000
  • Co-Branding shop: $581,000

Yet note that the investment presented here is an average. Indeed, it varies based on many factors, such as the location of your shop, its size, etc. Here are the low and high estimates from the Franchise Disclosure Document:

Here’s the full breakdown of costs per shop format:

Startup costs (New 8-car bay Midas shop)

Startup costsAmount
Initial franchise fee$10,000 – $35,000
Equipment and tools$52,500 – $375,000
Initial inventory and supplies$25,000 – $100,000
Insurance 3 months$1,500 – $4,500
Additional Funds 3 Months$40,000 – $65,000
Other$80,150 – $305,390
Total$209,150 – $884,890
Source: Franchise Disclosure Document 2023

Startup costs (reconversion)

Startup costsAmount
Initial franchise fee$10,000 – $35,000
Equipment and tools$0 – $375,000
Initial inventory and supplies$0 – $100,000
Insurance 3 months$1,500 – $4,500
Additional Funds 3 Months$40,000 – $65,000
Other$52,150 – $306,140
Total$103,650 – $885,640
Source: Franchise Disclosure Document 2023

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Midas franchise revenue

On average, a Midas franchise makes $1,080,000 in revenue per year.

This is the average revenue per shop for 936 out of the 963 franchised shops operating in all of 2022. Here’s the breakdown by quartile: whilst the bottom 25% shops made $652,000 in revenue per year on average, the top 25% made $1,612,000 instead.

Midas franchise profits

A Midas franchise makes $135,000 in profits per year on average (13% EBITDA margin).

We calculated this number using the information available in the Franchise Disclosure Document 2022. Luckily, Midas Shop provides detailed information on the cost structure of its franchised-owned shops which helped us calculating the profit and loss below.

Profit and lossAmount% revenueSource
Revenue$1,079,925100%as per FDD
COGS$(306,699)28%as per FDD
Gross Profit$773,22672%as per FDD
Staff$(330,457)31%as per FDD
Royalty and marketing fees$(104,753)10%as per FDD
Rent$(79,914)7%as per FDD
Other operating costs$(123,111)11%as per FDD
EBITDA$134,99113%
Source: Franchise Disclosure Document 2023

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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.

All content in this article is information of a general nature and does not address the detailed circumstances of any particular individual or entity. Nothing in the article constitutes professional and/or financial and/or legal advice, nor does any information in the article constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content in this article before making any decisions based on such information or other content.

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