Mr. Transmission Franchise: Revenue, Costs & Profits (2023)

With 116 franchises in the US, Mr. Transmission is another famous player in the automotive repair and maintenance industry. And with an initial investment of $252,000 on average, it’s also a very affordable franchise.

Should you buy a Mr. Transmission and open a new store? How much profits can you realistically make with this business?

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

Key stats

Franchise fee	$50,000
Royalty fee	7.0%
Marketing fee	7.0%
Investment (mid-point)	$252,000
Average sales	$613,000
Sales to investment ratio	2.4x
Payback period	8 years
Minimum net worth	$250,000
Minimum liquid capital	$70,000

What is Mr. Transmission?

Mr. Transmission is an automotive transmission repair franchise based in Orland Park, Illinois.

It was founded in 1956 and currently, it is owned by the Moran Family of Brands alongside other brands such as Milex Complete Auto Care, Alta Mere Automotive Outfitters and Smartview Window Solutions, to name a few.

The franchise offers transmission maintenance and repair, diagnostic services and vehicle inspections, maintenance and repairs on all parts of a vehicle’s drive train plus clutch maintenance and repairs for manual transmissions.

The chain began franchising in 1976 and now it has 120 locations worldwide, with 116 in the US.

Mr. Transmission franchise: pros and cons

The Pros:

• Comprehensive training: The franchisor offers its franchisees and auto technicians a detailed training program to equip them with the basics of its business concept, best operations, customer service, sales, technical support and back-shop support and facilitate the launch of their centers.
• Site selection and construction: Mr. Transmission helps its franchisees identify the right repair center location, negotiate their leases, design and develop their repair centers.
• Sales and customer care: The franchisor provides its franchisees with lead generation programs and training to assist them in building lasting relationships with the automotive communities in their local areas to benefit from referrals and improve their sales.
• Marketing and advertising: The franchisor helps its franchisees with marketing techniques such as ad templates, web development, email marketing, SEO, national media, regional advertising and local store promotional campaigns.
• Balanced work-lifestyle: The franchisor allows franchisees to plan their schedules, have time to spend with their loved ones and work on improving the performance of their ventures.
• Third-party financing: Mr. Transmission has relationships with third-party lenders to finance its franchise owners’ franchise fees, startup costs, equipment, inventory and payroll.
• Exclusive territory protection: The franchisor allows its franchisees to operate in an exclusive market area. As long as they comply with its franchise terms, the franchisor does not establish other franchises or operate competing businesses in the protected area.
• Co-branding with Milex Complete Auto Care: The franchisor allows its franchisees to co-brand with Milex Complete Auto Care, allowing them to offer a one-stop automotive experience to their customers, stand out from the competition and boost their earnings.
• Semi-absentee with a passive ownership opportunity: Mr Transmission gives franchisees the freedom to run a side business if they would prefer this. 

The cons:

• Not a home-based opportunity: The Mr. Transmission franchise cannot be run from home or a vehicle. Franchisees must have an office space, warehouse or retail facility.
• Competition: These may include Certified Transmission, Fix Auto USA, Christian Brothers Automotive and AAMCO Transmission

How much does a Mr Transmission franchise cost?

On average, the initial investment required to open a Mr Transmission franchise is $252,000, which includes a franchise fee of $40,000.

This investment is lower than the average investment required for other automotive franchises, which typically ranges from $500,000 to $1,000,000 as per own our benchmarks.

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 $209,000 and $302,000.

The investment also varies depending on the type of service center you choose: a single unit ($237,000) or a co-branded center ($268,000).

Startup costs

The investment covers all the startup costs you may need to start a transmission repair center. You must pay the franchisor an initial franchise fee of $40,000.

If you want to operate a co-brand, the franchise fee is $50,000 instead. If you are a veteran of the U.S. Armed Forces, you will get a $5,000 discount.

In addition to this franchise fee, the investment also covers:

• Formation Costs: training expenses, leasehold improvements, furniture, fixtures, equipment, signs, computer system, VOIP telephone equipment package, warranty fund security deposit, etc.
• Initial Marketing: marketing campaign
• Operating Costs: initial parts, inventory office supplies, shop supplies, rent, and working capital for the first 6 months, etc.

Type of Expenditure	Low	High
Initial Franchise Fee	$40,000	$50,000
Formation Costs	$90,113	$146,267
Initial Marketing	$30,000	$30,000
Operating Costs	$48,500	$75,500
Total	$208,613	$301,767

What is the turnover of a Mr. Transmission franchise?

On average, a Mr. Transmission franchise generates $613,000 in revenue per year.

That’s the median gross sales for 74 service centers as disclosed in the latest Franchise Disclosure Document.

Of course, the revenue per center varies from one center to another. To give you an example, the lowest revenue recorded in 2021 was $138,000 and the highest $1,957,000 instead. Here’s the breakdown of the 74 service centers by revenue:

How profitable is a Mr. Transmission franchise?

We estimate that a Mr. Transmission franchise makes on average $70,000 in profits per year (that’s a 11% EBITDA margin).

Mr. Transmission is a profitable business: the 11% EBITDA margin is in line with automotive and car servicing franchises in the US as per our own benchmarks (10-15% on average).

Note that this number is purely our own estimates. Indeed Mr. Transmission does not provide any detailed costs in this Franchise Disclosure Document else than revenue, royalty and marketing fees, and rent costs (as shown below). Else, we had to make our own assumptions when it comes to cost of sales (30% revenue) and staff (25%) especially.

Profit and loss	Amount	% revenue	Source
Revenue	$612,963	100%	as per FDD
COGS	$(183,889)	30%	assumption
Gross Profit	$429,074	70%
Staff	$(153,241)	25%	assumption
Royalties	$(42,907)	7%	as per FDD
Marketing fee	$(42,907)	7%	as per FDD
Occupancy	$(72,000)	12%	as per FDD
Other operating costs	$(49,037)	8%	assumption
EBITDA	$68,981	11%

Should you buy a Mr. Transmission franchise?

If we compare profits to the initial investment, we find that Mr. Transmission has a payback period of 8 years on average. In other words, you would be able to repay your investment within 8 years if you were to invest today in a new Mr. Transmission franchise, on average.

This is a good payback, in line with most other automotive franchises (~8 years). As such, from that perspective, we do consider Mr. Transmission is a good investment as you would be able to repay the initial investment within a relatively short period of time.

Note again that this is based on our own profits estimates (assuming 5% net profit margin) as well as the average performance of the franchised centers as disclosed in the FDD (especially when it comes to revenues). Therefore, we do not guarantee your franchise will perform as such. This number is an estimate of ours and should be taken as such.

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