AAMCO
AAMCO offers transmission and general automotive repair franchises under the AAMCO brand. Known for reliable transmission repairs, it operates in the automotive service industry.
About AAMCO
AAMCO Transmissions Inc. is an American transmission-repair franchise founded by Robert Morgan and Anthony A. Martino in 1957 in Philadelphia. Martino eventually ended his affiliation with AAMCO to manage the MAACO autobody-shop franchise, but Morgan stayed on with his son, Keith Morgan, succeeding him as CEO.
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AAMCO franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment for a New Franchisee to open a new AAMCO Center is estimated in the range provided in the table on page [p.26]. This amount includes the Initial Deposit of $20,000 and additional costs not specified in the excerpts but can vary based on factors like local market conditions and specific start-up needs.
What is the initial franchise fee?
The initial franchise fee, also known as the initial franchise license fee, is $39,500 for a new franchisee purchasing a new AAMCO Center. This fee can be reduced for existing franchisees buying an additional franchise, veterans participating in the VetFran Program, or through certain incentives as described in Item 5 of the FDD [p.26].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is 7.5% of the Center's Gross Receipts unless an existing franchisee opens a new center within one calendar year after signing the Deposit Agreement, in which case it reduces to 5% for the first 15 years [p.17]. The continuing advertising fee is used for media costs and other promotional expenses; its amount varies based on market size, ranging from $400 to $500 per week or a percentage of Gross Receipts [p.92] [p.42]. AAMCO retains discretion over the placement and content of this advertising [p.92], and may develop additional national or regional advertising programs in the future that franchisees must participate in [p.43].
How long is the initial franchise agreement, and can I renew it?
The initial franchise agreement term is fifteen (15) years [p.126]. You have the right to renew this franchise for one additional fifteen-year term if you are not in default under the agreement, provided you execute a new franchise agreement at least ninety (90) days but not more than one year prior to the expiration of the initial term [p.126].
Can I sell or transfer my franchise, and what does that require?
According to the FDD, if you wish to sell or transfer your Center (franchise), you must notify AAMCO in writing along with any offer from a third party. AAMCO will have 30 days to exercise its option to purchase the Center on the same terms as offered by the third party. If AAMCO does not act within this period and the third party is acceptable, you can then sell the Center to that third party for up to 90 days after AAMCO's option period ends [p.101].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement for good cause, which includes the failure of the franchisee to comply with any lawful provision of the franchise agreement and to cure such failure after being given written notice and a reasonable opportunity (no more than 30 days) to do so. [p.205]
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts. The FDD does mention that financial holdings or liquidity may be a condition for approval [p.168], but it doesn't provide specific details on net worth or liquid capital requirements.
Do I get an exclusive or protected territory?
No, you do not receive and AAMCO does not grant you an exclusive or protected territory or trading area. You may face competition from other AAMCO franchisees, from AAMCO outlets that we own, or from other channels of distribution or competitive brands that we or our affiliates control. [p.45]
What training and ongoing support does the franchisor provide?
The franchisor provides New Franchisees with an on-site business coach for up to 5 weeks of intensive onsite training in addition to training at AAMCO University [p.18]. For new centers, there is no fee for initial training at AAMCO University [p.36], but a Business Coach program fee of $10,000 is required upon signing the Franchise Agreement and is not refundable [p.18].
How many franchised outlets are there, and how many have closed or been terminated?
As of the end of their last fiscal year, there were 551 total AAMCO Centers operating, with all but 13 being franchised. The excerpts do not specify the number of closed or terminated outlets. [p.7]
Does the franchisor share any financial performance or earnings information?
Yes, AAMCO provides financial performance representations based on reported gross revenue and expense information from a subset of their franchised centers. Specifically, they provide average and median gross sales figures for certain subsets of operating AAMCO Centers as reported by franchisees to the franchisor [p.52, p.55]. However, other than this specified financial performance data, AAMCO does not make any financial performance representations or authorize its employees or representatives to do so [p.58].
What am I restricted to selling, and where must I buy supplies?
You are restricted to offering and selling AAMCO products or services only from your AAMCO Center's premises. This means you cannot use other channels for distribution [p.45]. For supplies, there are no specific requirements that you must buy or lease items from the franchisor or a limited group of suppliers; however, certain goods like signs must be purchased as specified by AAMCO [p.27] and some services might need to comply with training and equipment standards [p.48].