Tommy’s Express Franchise Costs $5.3M – $7.2M (+ 2024 Profits)

Tommy’s Express Car Wash has established itself as a prominent name in the car wash industry since its inception in 1969. Based in Holland, Michigan, the company embarked on its franchising journey in 2016, leveraging over five decades of operational experience to support its franchisees.

Tommy’s Express differentiates itself with a striking combination of high-tech car wash systems and strong franchisee support, including training, marketing, and state-of-the-art equipment.

The franchise is noted for its efficient, low-labor model, which requires only about twelve full-time employees per location, reflecting the company’s emphasis on automation and streamlined operations. This model not only helps in managing operational costs but also aligns with the contemporary trends of minimalistic labor requirements in business operations.

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.

Initial Franchise Fee

You must pay an initial franchise fee of $50,000, payable in a lump sum when you sign the Franchise Agreement. This fee is imposed uniformly on all franchisees and is not refundable.

Royalty Fee

You agree to pay a Royalty Fee of 4% of your Gross Sales per week. This fee is paid each week based on the Gross Sales from the preceding week.

Marketing/Advertising Fee

The Marketing/Advertising Fee includes a Local Marketing Fee of 2% of Gross Sales and a Brand Development Fee of 1% of Gross Sales, both payable weekly alongside the Royalty Fee.

Technology Fee

The Technology Fee is up to $200 per week, payable at the same time and in the same manner as your Royalty Fee.

Transfer Fees

Transfer fees include 50% of the then-current initial franchise fee if the transfer is to a new franchisee, and 25% if the transfer is to an existing franchisee.

Renewal Fees

The renewal fee is set at $2,500, payable upon renewal of the Franchise Agreement.

Management Fees

The management fee is 20% of Gross Sales, plus expenses. This is incurred if the franchisor steps in to operate your Franchised Business under certain circumstances.

Franchise pros and cons

The Pros:

• Quality training: Tommy’s Express offers its franchisees 180 hours of on-the-job training and 60 hours of classroom training to equip them with the basics of the business. Franchisees are also trained in hospitality, including hiring and training qualified staff. 
• Marketing and social media: The brand has established aggressive marketing tools to help franchisees spread the word about their locations and increase leads. Franchisees can leverage nationwide brand popularity, regional advertising, loyalty program apps, social media, email marketing, digital ads and local area marketing campaigns.
• Exclusive territory protection: Tommy’s Express grants its franchisees rights to operate in a protected territory. As long as the franchisees comply with the franchise agreement, the franchisor does not license any other franchise or operate competing brands in the protected location.
• Third-party financing: Tommy’s Express has relationships with third-party partners to fund its franchisees for startup costs, franchise fees, development and ongoing costs.
• Site selection and real estate: The brand has a dedicated real estate team to help franchisees with site selection guidance to locate the best car wash location.It also helps with lease negotiations, design and development.
• Flexible design models: The franchisor offers its franchisees different franchise designs to choose what fits their budgets and make the best out of the available real estate opportunities in their locations. These include the express tunnel wash, which caters to higher traffic, the flex or multi-profit gas/C-store/wash model for larger investments or the mini model for smaller sites.
• Technology suite: The franchise utilizes the latest technology to help franchisees stand out from the competition and improve sales. Franchisees get access to modern technology such as a proprietary license plate reader system, advanced point-of-sale programs, dashboard and manager apps and a user-friendly retail app.

The cons:

• Not a passive investment: The Tommy’s Express franchise does not allow for absentee ownership. Franchisees must be actively involved in the day-to-day activities of their businesses.
• Not a home-based or mobile business: The franchise cannot be operated from home or a mobile unit. Franchisees must have an established office space.
• No global presence: The franchise does not have locations globally. It may not be attractive to franchisees outside the US.

How to open a Tommy’s Express franchise

Opening a Tommy's Express franchise involves several steps, designed to ensure you are a good fit for the franchise. Here are the main steps to follow to open a Tommy's Express franchise.

1. Discovery and Application Process

• Begin by attending a franchise webinar to understand the basics of the Tommy’s Express franchise.
• Sign the Franchise Disclosure Document to officially start your journey.
• Visit the Tommy’s Express headquarters for a detailed discussion and site tour.

2. Site Selection

• Work with Tommy’s real estate team to identify the optimal location for your car wash.
• Evaluate multiple sites for potential market saturation and choose the best one based on strategic insights and local demographics.

3. Financing and Agreement

• Secure the necessary capital; a full ownership requires a significant upfront investment in liquid capital and net worth.
• Finalize your franchise agreement which includes initial franchise fees and ongoing royalty and marketing contributions.

4. Design and Construction

• Collaborate with Tommy’s preferred general contractors for building your car wash facility.
• Design your site according to the unique building architecture of Tommy’s Express, which maximizes operational efficiency and customer throughput.

5. Training and Installation

• Undergo extensive training at Tommy University to learn the operational, service, and management skills needed to run your franchise.
• Install state-of-the-art car wash equipment and systems, with help from Tommy’s project managers to ensure everything is optimally set up.

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.