SpeeDee Oil Change & Tune Up Franchise: Costs & Profits (2023)

With more than 150 locations of which 90 are franchised-owned in the US, SpeeDee Oil Change & Tune Up is a major player in the full-service automotive industry. For franchisees, SpeeDee is also an attractive franchise.

Indeed, with an initial investment of $504,000 yet a turnover of $1,057,000 per year on average, SpeeDee seems like a great business. Is it really? How profitable is a SpeeDee franchise?

In this article we are looking at SpeeDee Oil Change & Tune Up and its Franchise Disclosure Document to find out all you should know about this franchise. Let’s dive in!

Key stats

Franchise fee	$24,950
Royalty fee	5.0%
Marketing fee	6.0%
Investment (mid-point)	$504,000
Average sales	$1,057,000
Sales to investment ratio	2.1x
Payback period	9-10 years
Minimum net worth	$450,000
Minimum liquid capital	$250,000

What is SpeeDee Oil Change & Tune Up?

SpeeDee Oil Change & Tune Up is a quick lube and automotive tune-up service franchise based in Greenwood Village, Colorado.

It was founded in 1980 in Metairie, Louisiana, by Gary Copp and Kevin Bennett.

SpeeDee Oil Change & Tune Up offers smog checks, oil changes, tune-ups, major maintenance services, air conditioning and radiator service, transmission service and brake services.

Its franchising journey began in 1982 and today it has more than 150 locations and is part of FullSpeed Automotive, along with Grease Monkey and other brands.

SpeeDee Oil Change & Tune Up franchise: pros and cons

The Pros:

• Site selection and real estate: The franchisor helps its franchisees identify a suitable location in terms of traffic and performance. It also helps them negotiate favorable lease terms and design and build their ideal businesses.
• Flexible development options: The franchisor offers its franchisees flexible construction and design plans to help them take advantage of available real estate opportunities. These include building a site from the ground up, buying or leasing an existing facility that has closed or converting an existing facility into a SpeeDee Oil Change & Tune Ups franchise. Franchisees can save time and money plus scale into multiple franchises.
• Marketing support: The brand has a dedicated marketing and advertising team that helps franchisees benefit from marketing campaigns, national and regional advertising, social media and local store promotional campaigns.
• Pre-opening training: The franchisor offers its franchisees 29 classroom hours and 43 on-the-job hours of training to prepare them to launch their lube centers successfully. In addition, it trains them about its system, customer experience, operations and mechanic skills.
• Passive investment opportunity: SpeeDee Oil Change & Tune Up presents its franchisees with an absentee ownership opportunity. Franchisees can run their franchises alongside their day jobs and other opportunities.
• Third-party financing: The franchisor provides its franchisees with third-party financing to cover the franchise fee, startup costs, equipment, inventory and payroll expenses.
• Multiple income streams: The parent company provides its franchisees several channels for offering customers excellent services which allows them to stand out from the competition. These include oil changes, tire sales and rotations, brake services, car washes and other ancillary services through multiple brands.

The cons:

• Not a home-based opportunity: The franchise cannot be operated from a home or a vehicle. Franchisees must have an office space, retail facility or a warehouse.
• No exclusive territory protection: The franchisor does not grant its franchisees the right to operate in an exclusive protected area. Franchisees may face competition from other franchises granted by the parent company or from competitive units it controls.
• Not a part-time business: The franchise cannot be run part-time. It has to be open full-time for at least 40 hours per week.
• Competition: Similar companies such as Grease Monkey, Super Lube and Kwik Kar Marsh.

How much does a SpeeDee franchise cost?

You would have to invest, on average, $504,000 if you chose a Brownfield franchise format, and $477,000 if you chose a Greenfield franchise format instead.

Startup costs

The investment covers all the start-up costs you may need to open a SpeeDee Oil Change & Tune Up franchise business. You must pay the franchisor an initial franchise fee of $10,000 – $39,900. In addition to this franchise fee, the investment also covers:

• Formulation costs: initial training, office and waiting room furniture, signs, leasehold improvements, professional fees, shipping and installation costs (signage), utility deposits, licences and permits, etc.
• Equipment: equipment, furniture, tools, and installations; an emission (smog) analyzer; a telephone system; computer hardware and software; shipping; etc.
• Initial marketing: grand opening costs
• Operating costs: insurance, initial inventory, rent, supplies, point of sale maintenance fees, additional funds for the first 3 months, etc.

SpeeDee franchise (Brownfield startup costs)

Type of Expenditure	Amount
Initial franchise fee	$10,000 – $39,900
Formulation costs	$31,060 – $330,790
Equipment	$82,050 – $257,200
Initial Marketing	$10,000
Operating costs	$76,216 – $160,752
Total	$209,326 – $798,642

SpeeDee franchise (Greenfield startup costs)

Type of Expenditure	Amount
Initial franchise fee	$20,000 – $39,900
Formulation costs	$32,860 – $130,790
Equipment	$123,050 – $257,200
Initial Marketing	$10,000
Operating costs	$118,216 – $212,752
Total	$304,126 – $650,642

How much revenue does a SpeeDee franchise make?

On average, a SpeeDee Oil Change & Tune Up franchise makes $1,050,000 in revenue per year.

This number is the weighted average revenue for 46 of the 72 franchise-owned centres that were operating all of 2021. This is a +4.0% increase of vs. 2020 ($1,016,000). 

Here’s a breakdown of the median revenue for each of the 5 different types of centers as per the FDD:

• Category A: less than $400,000 revenue (7 centers)
• Category B: $400,000 to $600,000 revenue (6 centers)
• Category C: $600,000 to $800,000 revenue (5 centers)
• Category D: $800,000 to $1,000,000 revenue (7 centers)
• Category E: more than $1,000,000 revenue (21 centers)

How profitable is a SpeeDee franchise?

On average, a SpeeDee Oil Change & Tune Up franchise makes $93,000 in profits per year. This corresponds to a 9% EBITDA margin.

We calculated this number using the information available in the Franchise Disclosure Document 2022. Fortunately, SpeeDee Oil Change & Tune Up provides detailed information on the cost structure of its franchised-owned centres that belong to different annual sales ranges.

Profit and loss	Amount	% revenue	Source
Revenue	$1,057,467	100%	as per FDD
COGS	$(276,666)	26%	as per FDD
Gross Profit	$780,802	74%	as per FDD
Labor	$(349,401)	33%	as per FDD
Retail operating expense*	$(104,988)	10%	as per FDD
Rent	$(109,500)	10%	as per FDD
Other operating expenses	$(124,000)	12%	as per FDD
EBITDA	$92,913	9%	as per FDD

Is SpeeDee a good franchise investment?

So should you buy a SpeeDee franchise and open a new location? Are the profits worth the initial investment you would have to fund as the franchisee ($504,000 for a brownfield location for example)?

When comparing the upfront investment to the net profits, we find that SpeeDee has a 9-10 years payback, which is in line with car servicing franchises.

In other words, you would repay creditors (a loan for example) and any investor(s) (including yourself) within 9 to 10 years by using the profits generated by the business. Even though it’s not the best payback we found across the industry, it’s still a reasonable number.

Therefore, we do consider SpeeDee to be a profitable franchise investment if you were to buy the franchise today.

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