Five franchise brands run a tire 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 a tire shop: $800k to $3.5M in sales, and the owner keeps 8% to 18% 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.
Your own tire shop and each brand, side by side
The independent version
Your own tire shop
Built and run under your own name
Cost to open
$215k to $778k
Annual sales
$1.7Mtypical
Franchise fee
None
Royalty + ad fund
Noneall marketing is yours
$217,100
The owner keeps in a year, after about $50k of marketing
Taking new owners
Midas
Auto repair and tires
Total investment
$93k to $740k
Avg. annual sales
$1.2M to $1.3M
Franchise fee
$35k
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
Tire Pros
Tire and auto service shops
Owner-operators; absentee ownership generally not allowed
Total investment
$111k to $504k
Avg. annual sales
Ask the brand
Franchise fee
$7k
Royalty + ad fund
In the details
$209k
The owner keeps in a year at $1.7M in sales (your sales), after $11k to the brand
$8k less a year than on your own
Taking new owners
Tuffy Tire & Auto Service
Tires and auto repair
Total investment
$224k to $719k
Avg. annual sales
$1.2M to $1.4M
Franchise fee
$30k
Royalty + ad fund
5% + 5% of sales
$77k
The owner keeps in a year at $1.3M in sales (what it reports), after $129k to the brand
$140k less a year than on your own
Taking new owners
Big O Tires
Tires and auto service
Total investment
$311k to $1.1M
Avg. annual sales
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.
Taking new owners
RNR Tire Express
Tires and wheels with rent-to-own
Total investment
$719k to $1.8M
Avg. annual sales
Franchise fee
$45k
Royalty + ad fund
5% of sales
$134k
The owner keeps in a year at $1.7M in sales (your sales), after $84k to the brand
$84k less a year than on your own
Free account
See all 5 tire shop brands side by side
Every brand’s investment and fees, and what the owner keeps against running your own
The yearly sales the first 3 report, and a plus to add brands to your comparison and benchmark them in your account
Members see the sales every franchisor reports, for every brand
Free, no card. A new account accepts the Terms and the Privacy Policy. smbnest is a self-assessment tool and never takes a cut of your deal or a fee from a franchisor.
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