Maaco
Maaco offers auto body repair and painting franchises. Known for quick paint estimates and collision repair services, Maaco operates in the automobile repair and painting industry.
About Maaco
MAACO Franchising, Inc. is an American franchisor of auto painting and collision repair shops based in Charlotte, North Carolina. It was founded in 1972 by Anthony A. Martino and Daniel I. Rhode.
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Maaco franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of an 'Auto Body Conversion' Maaco Center franchise ranges from $196,000 to $644,000. For a 'Ground Up' or 'Non-Auto Retrofit' Maaco Center franchise, the range is between $728,500 and $3,994,000. [p.2]
What is the initial franchise fee?
The initial franchise fee is $45,000 for the first Center. For subsequent Centers, it decreases to $22,500 for the second Center and $20,000 for each additional Center [p.255]. This fee is not refundable under any circumstances [p.31].
What are the ongoing royalty and advertising fees?
The ongoing weekly royalty fee and marketing fee are due on the Payment Day of each week based on the preceding week's gross receipts. The marketing fee is $1,200 per week or an amount equal to the weekly marketing budget of Maaco franchisees operating in the franchisee's designated market area, whichever is greater [p.188]. This fee is payable at the same time as the weekly royalty payments and can be increased by up to 10% annually after the first twelve months of operations [p.188].
How long is the initial franchise agreement, and can I renew it?
This isn't specified in the excerpts.
Can I sell or transfer my franchise, and what does that require?
You cannot sell or transfer your franchise without Maaco's prior written consent [p.199]. If you wish to do so, you must first offer the same terms and conditions to Maaco as any third-party offer [p.202]. Maaco will have 90 days to evaluate the proposed transaction; if they decline, you may proceed with the sale under certain conditions [p.202]. This isn't specified in the excerpts.
On what grounds can the franchisor terminate the agreement?
The franchisor, Maaco, can terminate the agreement if certain events occur, as outlined in [p.203]. Additionally, Maaco has the right to terminate for good cause, which includes failure by the franchisee to comply with any lawful provision of the franchise agreement and not curing such failure after being given notice and a reasonable opportunity to cure, no more than 30 days ([p.6]).
What financial requirements — net worth and liquid capital — do I need to qualify?
To meet Maaco’s Guarantor Net Worth Threshold, you or a guarantor must have a minimum net worth as defined by U.S. generally accepted accounting principles, which can be modified by Maaco. Additionally, you are required to provide financial statements annually and allow Maaco to examine your business records. There is no specific mention of liquid capital requirements in the provided excerpts. [p.275]
Do I get an exclusive or protected territory?
No, you do not receive an exclusive territory under the Franchise Agreement, Development Agreement, or Limited Exclusivity Addendum [p.57]. Additionally, your limited exclusive rights will terminate upon the expiration of the Development Area Rights License (DARL), allowing Maaco to enter into a Franchise Agreement with any third party for a Center within the Designated Area [p.297].
What training and ongoing support does the franchisor provide?
The franchisor provides an initial training program that includes business management methods and techniques such as selling services, marketing, safety regulations, and more. This training is typically conducted over 3 weeks at their headquarters or another site chosen by them, with travel, lodging, and meal expenses borne by the franchisee. Additionally, the franchisor may provide ongoing support through online, telephonic, or in-person training sessions as deemed appropriate. [p.55, p.42, p.184]
How many franchised outlets are there, and how many have closed or been terminated?
This isn't specified in the excerpts. The provided FDD excerpts do not include information on the number of franchised outlets that have closed or been terminated.
Does the franchisor share any financial performance or earnings information?
Yes, the franchisor shares historical average and median gross receipts along with certain key performance indicators for existing Maaco Centers. This information is based on data reported by franchisees and was prepared without an audit [p.73, p.77]. However, the franchisor does not make any financial performance representations other than those included in Item 19 of the FDD, and it does not authorize its employees or representatives to make such representations [p.77].
What am I restricted to selling, and where must I buy supplies?
You are not restricted in what you can sell, but the franchise agreement may prohibit you from operating a similar business during the term of the franchise. Additionally, you must follow standards and specifications for inventory and supplies, and while you have the option to purchase from any supplier meeting these standards, the franchisor has the right to require purchases from approved suppliers in the future [p.4, p.44]. Supplies related to establishing or operating your business may need to be bought from suppliers designated by the franchisor, which currently includes Driven Product Sourcing and Spire Supply [p.44] [p.57].