AAMCO Franchise Cost & Fees

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Description

Year Business Began: 1963Franchising Since: 1963Headquarters: Horsham, PennsylvaniaEstimated Number of Units: 630Franchise Description: The franchisor is AAMCO Transmissions, Inc. The franchise offered is for a transmission and general automotive repair center under the AAMCO brand. AAMCO Centers sell transmission repair services, as well as additional automotive maintenance and repair services the franchisor then currently authorize, such as oil and filter changes, brake services, heating and cooling system service, tune-ups, steering and suspension, factory-recommended maintenance, and related services, to the general public on both a retail and wholesale level.Training Overview: Franchisees of a new Center must attend AAMCO’s “Operator’s Training School” at AAMCO University before they open the Center for business. AAMCO’s 4 week Operator’s Training School includes intensive training in the operation of an AAMCO Center, including management skills and methods, and does not teach mechanical skills. For franchisees who are new to the AAMCO system, during the first quarter after they open their Center, the franchisor will provide an intensive 5-week Business Coach training program at their AAMCO Center for them and their staff. Business Coach training includes training in: personnel recruiting, policies and procedures, computer training and set-up, Center marketing; manager training; customer relations; accounting procedures; vendor establishment; and other topics relating to an AAMCO Center. While franchisees are responsible for hiring their employees, the franchisor will assist franchisees in recruiting a customer service manager and technicians for the Center. The franchisor may require that franchisees attend additional training courses. The franchisor will determine whether or not a franchisee has to attend additional training based on the effectiveness of his or her compliance with AAMCO’s policies and procedures.Territory Granted: The franchisor grants franchisees a license for the operation of one AAMCO Center located within a specific Statistical Area defined by the U.S. Office of Management and Budget. Franchisees do not receive and the franchisor does not grant them an exclusive or protected territory or trading area. While the franchisor maintains the right to establish additional company-owned, affiliate-owned or franchisee-owned AAMCO Centers in the same Statistical Area as a Center, the franchisor limits the number of Centers it will authorize to a maximum of one Center for each 100,000 motor vehicle registrations in the Statistical Area.Obligations and Restrictions: The franchisor strongly encourages that franchisees participate personally in the direct “on-premises” management and operation of the AAMCO Center. Franchisees must hire only those employees who, after appropriate screening, demonstrate themselves to be honest and dependable. Franchisees may hire a customer service manager for the AAMCO Center, and he or she must satisfactorily complete the customer service manager training and any other retraining the franchisor requires. If requested by the franchisor, the customer service manager must sign a confidentiality agreement by which he or she agrees to maintain confidentiality of trade secrets and proprietary information. While some AAMCO franchisees, with the franchisor’s advance written approval, have other business interests, franchisees must maintain a regular and reasonably consistent schedule of being “on-premises” to personally manage the day-to-day operations and development of the business of the Center. The franchisor requires that franchisees offer and sell only those goods and services that the franchisor has approved. Franchisees must offer all goods and services that the franchisor designates as required for all franchisees. Franchisees cannot operate any other business at the location of the AAMCO Center.Term of Agreement and Renewal: The length of the initial franchise term is 15 years from the signing of the Franchise Agreement. Franchise Agreement will automatically renew for an additional 15 years unless the franchisor receives notice of non-renewal from the franchisee, or provides the franchisee with notice of its intent not to renew, at least one year before termination of the current franchise term.Financial Assistance: The franchisor does not offer direct or indirect financing and it does not guarantee a franchisee’s note, lease, or obligation. AAMCO is listed on the SBA’s Franchise Registry as complying with SBA’s franchise eligibility guidelines. The Registry allows franchisees to enjoy the benefits of a streamlined review process for SBA loan applications. Investment Tables: Estimated Initial Investment Name of Fee Low High Initial License Fee (including credit of application fee received under Deposit Agreement) $39,500 $39,500 Business Coach Training $10,000 $10,000 Grand Opening Advertising Expenses $3,000 $3,000 AAMCO Security Deposit $5,000 $5,000 Travel Expenses for Training $2,000 $4,000 Real Estate & Utility Deposit $14,000 $43,000 Leasehold Improvements $8,500 $12,000 Signs (including in Center Opening Package) $7,500 $19,000 Shop Equipment, Supplies, Lifts & Installation (included in Center Opening Package), plus freight & taxes $78,400 $98,000 POS System – Acquisition $2,500 $2,500 POS System – 3 months Access/Support $500 $500 Computer & Phone System – Hardware $6,500 $10,000 Office Furniture $5,500 $7,000 Sales Materials $500 $1,000 Technical Information System – Acquisition) $1,700 $1,700 Miscellaneous Costs & Professional Fees (Legal and Accounting Advice, Personnel Recruitment, etc.) $4,000 $10,000 Insurance $1,500 $2,500 Advertising Costs – 3 Months $4,700 $13,500 Additional Funds – 3 Months $30,000 $50,000 ESTIMATED TOTAL $223,600 $330,500 Other Fees Type of Fee Amount Royalty Fee 7.5% of total gross sales. National Creative Advertising Fee $150 per month. Local Advertising $200- $876/ week (average $550/week) for active Pools; If no Pool, greater of 4% of Gross Receipts or $400 (or 5% of Gross Receipts or $500 in top 20 markets as determined by Nielsen Media Research) Internet Directories $23.10 per quarter for yp.com platinum ad. Web pages Fees Annual cost of third party URL provider, plus $35/year processing fee. 1-800-GO-AAMCO $125 initial connection, plus $0.25/minute per call in U.S. (or $0.55/minute in Canada). Remote Call Forwarding Telephone Numbers About $500/year for 5 numbers, plus adjustable usage fees at about $0.06/minute. POS System Software – Initial License $2,499 POS System Software – Support $149/month, plus tax Express Cash Processing Fee 1.38% of central billed, national fleet account approved repair order amount (amount subject to change based on prime rate and number of participating Centers) Intershop Warranty Work Other Center’s costs incurred for warranty work (parts plus labor). Indemnification Will vary under circumstances. Unauthorized Telephone Number Transfer Charge $250 per day Interest 18% per year, (1.5% per month). Late Fees $10 per week per late report. Audit Costs of audit, plus 3 times amount of underpayment, plus interest on underpayment. Transfer Fee $6,000 The above information has been taken from the FDD of AAMCO. Year of FDD: 2018Franchise Direct’s Disclaimer

Other Fees
Type of Fee Amount
Royalty Fee 7.5% of total gross sales.
National Creative Advertising Fee $150 per month.
Local Advertising $200- $876/ week (average $550/week) for active Pools; If no Pool, greater of 4% of Gross Receipts or $400 (or 5% of Gross Receipts or $500 in top 20 markets as determined by Nielsen Media Research)
Internet Directories $23.10 per quarter for yp.com platinum ad.
Web pages Fees Annual cost of third party URL provider, plus $35/year processing fee.
1-800-GO-AAMCO $125 initial connection, plus $0.25/minute per call in U.S. (or $0.55/minute in Canada).
Remote Call Forwarding Telephone Numbers About $500/year for 5 numbers, plus adjustable usage fees at about $0.06/minute.
POS System Software – Initial License $2,499
POS System Software – Support $149/month, plus tax
Express Cash Processing Fee 1.38% of central billed, national fleet account approved repair order amount (amount subject to change based on prime rate and number of participating Centers)
Intershop Warranty Work Other Center’s costs incurred for warranty work (parts plus labor).
Indemnification Will vary under circumstances.
Unauthorized Telephone Number Transfer Charge $250 per day
Interest 18% per year, (1.5% per month).
Late Fees $10 per week per late report.
Audit Costs of audit, plus 3 times amount of underpayment, plus interest on underpayment.
Transfer Fee $6,000