Valvoline Instant Oil Change Franchise Costs $300K (2023 Stats)

This article was updated with the 2023 Franchise Disclosure Document

With more than 800 locations in the US alone, Valvoline is undeniably one of the leading car service and repair center franchise. And with an investment cost of $300,000 on average (if you lease the property), it’s one of the most affordable franchise too.

What about the profits? As per the latest Franchise Disclosure Document, we found that one Valvoline franchise makes on average $1,420,000 in revenue per year. Is this a good investment?

In this article we are looking at Valvoline and its Franchise Disclosure Document to find out all you should know about how much it really costs, and how profitable this business really is. Let’s dive in!

Key stats

Franchise fee$30,000
Royalty fee6.00%
Marketing fee3.00%
Investment (mid-point)$300,000
Average sales$1,420,000
Sales to investment ratio756.0x
Minimum net worth$1,000,000
Minimum liquid capital$600,000
Source: Franchise Disclosure Document 2023

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What is Valvoline Instant Oil Change?

Valvoline Instant Oil Change is an American chain of preventive maintenance service centers based in Lexington, Kentucky.

It was founded in 1986 by the Valvoline Company.

The franchise operates quick-service engine oil change facilities, offering chassis lubrication, certain routine maintenance checks and other automotive services.

Valvoline Instant Oil Change began franchising in 1988 and now has 1,573 locations globally, with 817 units in the US.

Valvoline franchises pros and cons:

Pros

  • Third-party financing: The franchisor provides its franchisees with in-house financing arrangements to fund equipment costs. In addition, it has relationships with third-party lenders to fund its franchisees for the franchise fee, startup, equipment, inventory and payroll.
  • Exclusive territory protection: The brand grants its franchisees the right to operate in an exclusive territory. It does not establish other franchises or operate competitive units in the designated area.
  • Pre-opening training: Valvoline Instant Oil Change offers its franchisees a detailed online and classroom training program to train them about its concept and how to operate its centers successfully. It also trains them on the brand’s products and services, customer services and how to hire qualified technicians and prepares them for a successful grand opening.
  • Marketing and public relations: The brand provides its franchisees with a dedicated marketing strategy to create awareness about their centers. Franchisees can leverage the brand’s popularity, national and local market promotional campaigns, social and online media, email marketing and loyalty program apps.
  • Site selection and development: Valvoline Instant Oil Change provides its franchisees with site selection to help them identify a viable location in terms of competition and expansion potential. Also, it helps them with the designs, construction, equipment requirements and lease negotiations.
  • Corporate and ongoing support: The brand provides its franchise with management support and successful business partners’ consultations to build and grow their centers. Also, it provides them with timely product and service updates, proprietary software, field operations and franchise performance audits.
  • Convenience: The brand utilizes quick 15-minute drive-through oil changes with no appointment services. Franchisees can stand out from the competition and improve their profits.

Cons

  • Not a part-time business: The franchise cannot be operated on a part-time basis or as a side business. Franchisees must adhere to the parent company’s working hours.
  • Not a home-based business: The franchise cannot be operated from home or a vehicle. It requires franchisees to have fixed office space, a retail facility or a warehouse.
  • No absentee ownership: A Valvoline Oil Change franchise does not present a passive investment opportunity. Franchisees must take part in the day-to-day operations of their centers.
  • Competition: may include Mobil, Vioc and Castrol

Valvoline franchise costs

You have to invest around $300,000 to open a Valvoline Instant Oil Change franchise service center.

Note that this assumes you lease the property. If you decide to buy instead, you would spend on average $2.5 million.

Startup costs

In addition to the initial franchise fee of $30,000, which you must pay to the franchisor, you would also pay for the leasehold improvements, furniture and fixtures, equipment, opening inventory, insurance, etc.

Here’s the full breakdown of startup costs:

Type of ExpenditureAmount
Initial franchise fees$30,000
Land and improvements$33,000 – $2,750,000
Lube equipment and signage$3,025 – $250,000
Insurance$12,000 – $17,000
Additional funds -3 months$50,000 – $65,000
Other$41,725 – $158,550
Total$204,750 – $3,270,550
Source: Franchise Disclosure Document 2023

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Valvoline franchise revenue

A Valvoline Instant Oil Change franchise makes $1,420,000 in sales per year on average.

This is the average revenue per service center for 720 of the 827 franchised centers operating during all of 2022.

Revenue per franchise is steadily growing:

Valvoline franchise profits

We estimate that a Valvoline Instant Oil Change franchise makes $238,000 in profits per year on average (17% EBITDA margin).

We calculated this number using the information available in the Franchise Disclosure Document 2023. Fortunately, Valvoline provides detailed information on the cost structure of its franchised-owned service centers which we are summarizing below.

Profit and lossAmount ($)% Revenue
Revenue1,419,593100%
COGS(424,295)29.9%
Gross Profit995,29870%
Staff(404,786)28.5%
Royalties(85,176)6.0%
Advertising(66,610)5.0%
Store expenses(101,040)7.0%
Corporate administration(99,372)7.0%
EBITDA238,31517.0%
* assumption, as corporate administration expenses aren’t provided in the FDD
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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