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Maaco Franchise ProfileAutomotive Franchises > Auto Repair |
What is the Initial Investment for a Maaco Franchise?
To become a Maaco franchisee, the initial investment ranges from $172,500 to $1,275,500. This includes a franchise fee of $45,000 and a cash requirement of $172,500 to $605,500. Additionally, franchisees are responsible for a 4% royalty fee and a marketing fee of $1,200 annually. Understanding these financial commitments is crucial for prospective franchisees to ensure they are prepared for the investment.
What Are the Average Financial Metrics for a Maaco Franchise?
Maaco franchises generate an average annual revenue of approximately $1,373,842, with a median revenue of $1,059,850. The cost of goods sold (COGS) accounts for 78.7% of this revenue, leaving a gross profit margin of 21.3%. Operating expenses average around $683,141, resulting in an EBITDA of approximately $229,292, which represents 16.7% of revenue. These figures provide insight into potential profitability and operational efficiency for franchise owners.
How Long Does It Take to Break Even with a Maaco Franchise?
Franchisees can expect to reach their breakeven point in about 12 months. The investment payback period is estimated at 25 months, making it essential for new franchisees to have adequate financial resources to sustain operations during this initial phase. Understanding the timeline for recouping investments can help potential owners assess the viability of entering the Maaco franchise system.
What is the Current State of Maaco Franchise Units?
As of 2023, there are 377 Maaco franchise units, a decline from 411 units in 2021. This trend indicates a slight decrease in the number of franchised locations over the past few years. However, the brand's established presence in the automotive repair industry and its focus on franchisee support may present opportunities for growth and stability for new investors looking to join the system.
Maaco Franchise Financial Requirements
Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.
The minimum total assets (minus liabilities) you must possess.
Net Worth Required:
The estimated period to recoup your total investment.
Investment Payback:
The initial fee paid to join the franchise system.
Franchise Fee:
Ongoing percentage of revenue paid to the franchisor.
Royalty Fee:
Regular contribution toward the franchise’s advertising fund.
Marketing Fee:
The estimated timeframe to recover your initial costs.
Breakeven Time:
The total amount required to launch the franchise.
Initial Investment:
The minimum liquid capital you must have on hand.
Cash Required:
The typical yearly revenue generated per franchise location.
Average Revenue:
The middle value of yearly revenue among franchise locations.
Median Revenue:
The largest reported annual revenue among franchisees.
Highest Revenue:
The smallest reported annual revenue among franchisees.
Lowest Revenue:
A broad sector defining similar types of franchise businesses.
Industry:
A more specific division within the broader industry.
Category:
The key individuals guiding the franchise’s strategy and growth.
Leadership:
The official business address of the franchisor’s headquarters.
Corporate Address:
Available financing options to help start the franchise.
Funding Year:
The main organization that owns the franchise brand.
Parent Company:
Maaco Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2021 | 2022 | 2023 |
|---|---|---|---|
| Total Units | 411 | 398 | 377 |
| Net Change YoY | -13 | -21 | |
| Franchised Units | 411 | 398 | 377 |
| Net Change YoY | -13 | -21 | |
| Corporate Units | 0 | 0 | 0 |
| Net Change YoY | 0 | 0 |
Investment Overview
The Maaco franchise offers a range of investment options, with initial costs ranging from $172,500 to $1,275,500. A franchise fee of $45,000 is required, alongside a royalty fee of 4% on gross sales and an annual marketing fee of $1,200. Prospective franchisees should be prepared with a cash requirement of $172,500 to $605,500 and a net worth of at least $1,000,000 to qualify for ownership.
Revenue Potential
Maaco franchises boast impressive revenue potential, with average annual revenue per unit reported at $1,373,842. The median annual revenue stands at $1,059,850, while units can generate between $452,230 and $7,306,120 annually. This variability indicates strong market opportunities for franchisees who effectively manage their operations and marketing strategies.
Breakeven and Payback
Franchisees can expect to reach breakeven within approximately 12 months of operation. The investment payback period is estimated at 25 months, making it a relatively attractive option for those looking to recover their initial investment in a timely manner. These metrics highlight the potential for a quick return on investment in the automotive repair industry.
Franchise Growth
As of 2023, Maaco has experienced a gradual decline in the number of franchised units, with 377 locations compared to 411 in 2021. Despite this decrease, the brand remains a well-recognized name in auto body repair, offering franchisees a chance to tap into a market with consistent demand for vehicle repair services.
Operating Expenses
Average operating expenses for Maaco franchises total approximately $519,650 annually. Key expense categories include direct labor at $309,380, indirect labor at $152,222, and royalties at $106,085. Understanding these costs is crucial for franchisees to effectively manage their budgets and enhance profitability.
Financial Performance
The financial performance of Maaco franchises is characterized by a gross profit margin of 21.3%, with EBITDA averaging $229,292, or 16.7% of revenue. This indicates a healthy profit potential for franchisees who can control costs and maximize operational efficiency while delivering quality services to customers.
Frequently Asked Questions
The initial investment to open a Maaco franchise ranges from $172,500 to $1,275,500. This includes the franchise fee, equipment, and other startup costs.