Three franchise brands run an auto body shop. Here they are beside the independent version of the same business, with each brand’s fees as it publishes them and worked out in dollars. A brand can bring customers an independent has to earn one by one. The question is whether it brings in more than it costs.
Typical for an auto body shop: $1.5M to $6M in sales, and the owner keeps 8% to 16% after paying for its own marketing. Change either to your own numbers.
Work each brand out at
How the two sides are counted
Sales. A brand’s name brings customers an independent wins one at a time, so each brand is worked out at the sales it reports where we have them, and at yours where we don’t.
Marketing. On your own you pay for all of it, about 3% of sales here (the SBA’s usual range for ongoing marketing). The ad fund does part of that job, so it is counted once, not twice.
Survival. New franchised businesses were about 5 to 6 points more likely to make it through their first two years in Census data, and about half of all new businesses close within five years. It is not in the dollars; each brand’s details give the sources.
The independent version
Your own auto body shop
Built and run under your own name
Cost to open
$200k to $782k
Annual sales
$3Mtypical
Franchise fee
None
Royalty + ad fund
Noneall marketing is yours
$360,000
The owner keeps in a year, after about $90k of marketing
Taking new owners
Fix Auto USA
Collision repair
Total investment
$55k to $3.1M
Avg. annual sales
$2.7M to $3.2M
Franchise fee
$10k
Royalty + ad fund
3% + 0.75% of sales
$267k
The owner keeps in a year at $3M in sales (what it reports), after $111k to the brand
$93k less a year than on your own
Taking new owners
Maaco
Auto painting and collision
Total investment
$173k to $606k
Avg. annual sales
$1M to $2.2M
Franchise fee
Not listed
Royalty + ad fund
In the details
The fee is not a simple share of sales, so it is not worked out in dollars. The details show it as the brand words it.
Selective
CARSTAR
Collision repair
Total investment
$298k to $804k
Median annual sales
$1.5M to $3.4M
Franchise fee
$10k
Royalty + ad fund
1.5% + 1% of sales
$259k
The owner keeps in a year at $2.5M in sales (what it reports), after $62k to the brand
$101k less a year than on your own
Before you sign: what to read in the disclosure document
Every franchisor must give you its Franchise Disclosure Document at least 14 days before you sign or pay. These are the parts that answer the questions above.
Items 5 to 7, the fees and the investment. The franchise fee, every other fee (technology, training, transfer, renewal), and the full opening budget, including working capital.
Item 19, what owners earn. Whether the brand states owner sales or earnings at all, and for which units. Put its figures in the boxes above in place of the typical ones.
Item 20, units opened, closed and sold. How many owners left in each of the last three years, and a list of current and former owners you can call.
Item 12, the territory. Whether you get a protected area, and what the brand can open or sell inside it.
Item 21, the franchisor’s own finances. Whether the company behind the brand is in good health.
smbnest is a self-assessment tool, not individualized advice. Fees are as each brand publishes them on its franchising page and in its disclosure document, reviewed in the month shown, and change; the figures in dollars are worked out at the sales you enter and are not a forecast. We never take a cut of your deal or a fee from a franchisor. Before you sign, speak with a franchise attorney and a qualified financial adviser, and call owners from the disclosure document.
Your guidesmbnest
The guide is an automated assistant. Answers come from this business’s model, its sources and your plan; they are general information, not legal, tax or financial advice. Talk to a person