Take 5 Oil Change Franchise Costs & Profits (2023)
With more than 760 shops globally, Take 5 Oil Change is one the leader in the oil change industry. It’s also one of the fastest-growing franchise in the industry since it also started franchising in 2016.
Indeed, in a little less than 5 years Take 5 Oil Change has added 173 franchises to its network..! Whilst it’s always good to choose a franchise with a strong expansion plan and a large footprint, as the franchisee you should also pay attention to the finances.
In other words: how much does the franchise really cost? And, more importantly, are the profits worth the initial investment upfront?
In this article we are looking at the information disclosed in the Franchise Disclosure to find out how profitable Take 5 Oil Change franchises really are. Let’s find out!
Key stats
| Franchise fee | $35,000 |
| Royalty fee | 7.0% |
| Marketing fee | 5.0% |
| Investment (mid-point) | $1,021,000 |
| Average sales | $1,031,000 |
| Sales to investment ratio | 1.0x |
| Payback period | 10 years |
| Minimum net worth | $500,000 |
| Minimum liquid capital | $300,000 |
Take 5 Oil Change Franchise Business Plan
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What is Take 5 Oil Change?
Take 5 Oil Change is an American quick lube service franchise featuring a unique drive-thru concept that allows customers to stay in their cars. Also, it offers vehicle inspections, coolant services and seasonal tire changes.
Take 5 Oil Change was established in 1984 in Metairie, Los Angeles, by Monty Montgomery. It is part of the Driven Brands family, headquartered in Charlotte, North Carolina, alongside other brands such as Maaco, Carstar and Meineke.
It began franchising in 2016 and currently has 762 locations worldwide, including 173 franchises in the US and 558 company-owned franchises.
Take 5 Oil Change franchises pros and cons
The Pros:
- Pre-opening training: The franchisor offers its franchisees a robust three-week training to prepare them on best management practices, sales and customer service. In addition, it offers them two weeks of supervision for their grand opening.
- Real estate and site selection: The franchisor provides its franchisees with a data-driven real estate team to help them find the best location for their businesses. Also, it helps them with lease negotiations and establishing their franchise at a minimal cost.
- Flexible franchise designs: The brand utilizes a simple franchise design of a 1/3-acre pad and 1,500-square-foot building. This gives franchisees more real estate options to choose from and allows them to establish their shops from scratch or convert an existing one, reducing their development costs.
- Exclusive territory protection: The franchisor allows its franchisees to operate in a protected area. Under the agreement, it does not license any other franchise or operate competing channels in the protected area.
- Marketing and publicity: Take 5 Oil Change has proven marketing and advertising techniques to help franchisees create awareness about their centers and foster growth. These include national media, print advertising, regional advertising, email marketing, social media and targeted local market campaigns.
The cons:
- Not a home-based opportunity: The franchise cannot be operated from home or a mobile unit. Franchisees must have a retail facility, office space or warehouse to operate from.
- No absentee ownership: The Take 5 Oil Change franchise does not present a passive investment opportunity. Franchisees must be actively involved in the decision-making and day-to-day operations of their businesses.
- Not a part-time business: The business must be open full-time for at least 40 hours a week.
- No financing: The franchisor does not offer its franchisees direct or indirect financing options.
- Competition: These include other parent company brands such as Maaco, Carstar and Meineke.
How much does a Take 5 Oil Change franchise cost?
Take 5 Oil Change requires an initial franchise fee of $35,000 and an average total investment of $1,021,000 to open a new franchise.
This amount is in line with the average investment required for other automotive franchises.
Of course, the $1,021,000 is an average, the investment varies depending on factors such as the location of your store, its size, and other factors. According to the latest Franchise Disclosure Document, the investment ranges between $734,000 and $1,308,000.
Note that this is the initial investment required to open a new Take 5 Oil Change franchised center. If you choose to convert an existing shop instead, the initial investment drops to $380,000 on average.
Startup costs
The investment covers all the startup costs needed to start a drive-thru oil change service franchise. You must pay the franchisor an initial franchise fee of $35,000. In addition to this franchise fee, the investment also covers:
- Building Costs: building work, site work, design, plans, signage, software installation, used oil system, etc.
- Operating Costs: opening inventory, 3 months’ rent, insurance, salaries, etc.
- Initial Marketing: grand opening advertising and marketing
| Type of Expenditure | Low | High |
|---|---|---|
| Initial franchise fee | $35,000 | $35,000 |
| Building costs | $561,997 | $1,118,388 |
| Operating costs | $65,500 | $82,500 |
| Initial marketing | $20,000 | $20,000 |
| Working capital (3 months) | $52,000 | $52,000 |
| Total | $734,497 | $1,307,888 |
Take 5 Oil Change Franchise Business Plan
All the stats: startup costs, profits, breakeven, etc.
5-year financial projections built with the FDD
Excellent 4.8/5 based on 70 reviews
What is the turnover of a Take 5 Oil Change?
On average, an Take 5 Oil Change franchise generates $1,031,000 in revenue per year.
To be clear, that’s the median revenue of the 164 franchised-owned centers as disclosed in the 2022 Franchise Disclosure Document. Whilst the top 82 centers (50%) had an median revenue of $1.3 million, the other 82 centers had a median revenue of $834,000 instead.
In general, revenue per center ranges from $411,000 for the less performing franchise up to $2.5 million for the most successful one.
In addition, Take 5 Oil Change also provides some useful insights into the typical revenue ramp-up for new service centers. Included in this analysis are all the 60 service centers that opened during 2017 to 2020.
As you can see below, the median revenue per year per service center was $1,031,000 for centers opened more than 1 year ago, and $1,421,000 for those opened more than 2 years ago.
How profitable is a Take 5 Oil Change franchise?
A Take 5 Oil Change franchise makes $128,000 in profits per year on average. That’s a 12% EBITDA margin.
Note that this information comes from the Franchise Disclosure Document, we didn’t invent nor estimated anything here else than the other costs (as highlighted below). Indeed, the franchisor provides a 4-Wall EBITDA in its FDD which excludes general administrative costs (e.g. accounting, bookkeeping, etc.) and any owner’s compensation which we estimated instead.
As per this information, Take 5 Oil Change is a profitable franchise. Indeed, 12% EBITDA margin is in line with automotive franchises as per our own benchmarks (10-15%).
| Profit and loss | Amount | % revenue | Source |
|---|---|---|---|
| Revenue | $1,031,108 | 100% | as per FDD |
| COGS | $(259,115) | 25% | as per FDD |
| Gross Profit | $771,993 | 75% | as per FDD |
| Staff | $(230,506) | 22% | as per FDD |
| Royalties | $(72,178) | 7% | as per FDD |
| Occupancy | $(88,999) | 9% | as per FDD |
| Marketing | $(51,555) | 5% | as per FDD |
| Insurance | $(11,079) | 1% | as per FDD |
| Other variable costs* | $(62,655) | 6% | as per FDD |
| Other costs** | $(126,555) | 12% | assumption |
| EBITDA | $128,466 | 12% | as per FDD |
** general administrative costs (accounting, bookkeeping, etc) which we estimated at 5% of revenue; owner’s salary which we estimated at $75,000 per year
Is Take 5 Oil Change a good franchise investment?
So are the profits worth the initial investment you would have to fund as the franchisee to open a new Take Oil Change franchise? Well, we do think so.
Indeed, when we compare the initial investment of $1,021,000 vs. the expected net profits used to reimburse this upfront investment, we estimate that a Take 5 Oil Change has a 9-10 years payback on average.
In other words, you would wait 9 to 10 years on average to reimburse the initial investment (either to a bank, investors and/or yourself). That’s a good payback for an automotive franchise, and as such we consider Take 5 Oil Change to be a good franchise investment.
Take 5 Oil Change Franchise Business Plan
All the stats: startup costs, profits, breakeven, etc.
5-year financial projections built with the FDD
Excellent 4.8/5 based on 70 reviews
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