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Want To Open an AAMCO Franchise? Here’s What It Will Cost You
For people looking to enter the auto repair business, opening an AAMCO Transmissions and Total Car Care shop is a viable option. Not only do they have a training program in place, but they also have a winning system so you won’t have to start from scratch. If you’re curious about pursuing this venture, you need to know the AAMCO franchise cost. Alongside that, you also have to be informed about the amount of time and effort you need to invest in the business.
Franchise Description
Let’s get to know the firm a bit more before we discuss AAMCO franchise cost. The company prides itself in being one of the “most forward-looking brands in the $67 billion auto repair industry.” AAMCO is a leader in transmission repair and is capable of offering complex car repairs.
The business began in 1963 and started offering the brand for franchise the same year. Today, they have around 580 units at present, all guided by their head office in Horsham, PA. Icahn Automotive Group, one of the largest players in its industry, owns AAMCO.
AAMCO strives to offer its “top-rated, time-tested” business model to franchise owners who aim for great profit. The firm does so while investing not only in its present-day tech but also in its future plans to improve the business further.
Training Overview
Aside from AAMCO franchise cost, you should also be prepared to invest time and effort in business training. The head office requires franchise owners to attend the “Operator’s Training School” at AAMCO University. Owners must complete this four-week required course focused on management methods and skills before they open the shop. However, it’s crucial to note that this training doesn’t include mechanical skills.
If you’re new to the AAMCO system, the head office will hold an intensive five-week Business Coach training program in your center for you and your staff. This course includes various training strands, including policies and procedures, computer training and set-up, hiring, center marketing, customer relations, and other facets.
Though franchise owners will need to hire their workers, the head office can help them get technicians and a customer service manager. In the same vein, the head office may also require a center’s workers to attend further courses to comply with franchise standards.
Obligations and Restrictions
The head office encourages franchise owners to be hands-on in their AAMCO center. Also, the head office advises franchise owners to hire workers who prove themselves to be honest.
The customer service manager hired for the AAMCO center should complete the training required to do the job. Besides, they may also need to undergo retraining and other extra courses. This person will be required to sign a confidentiality contract that protects the brand’s trade secrets and other crucial info.
Besides duties to uphold the brand’s service standards, all centers must also sell only goods approved by the head office. They also can’t operate any other ventures at the AAMCO center. The initial franchise term is 15 years. The contract will renew for 15 more years if the center meets the head office’s standards. If the franchise owner doesn’t want to push through with the business, they must send a notice of intention not to renew at least a year before the contract ends.
AAMCO Franchise Cost
Your 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 |
| 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 Costs
| Type of Fee | Amount |
|---|---|
| Royalty Fee | 7.5% of total gross receipts. |
| 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 Fee(s) | 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). |
| Recruiting Requisition Fee | $250 per requisition. |
| Reputation Management Fee | $50 per month. |
| 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 |
Did You Know?
Here are a few fun things to know about AAMCO:
- If you’re worried about choosing a brand that doesn’t earn income, you likely won’t have that problem with AAMCO. In fact, AAMCO franchise owners have been reinvesting in the brand because they know it rakes in profits. Some franchise owners have been opening their second, third, or even fourth centers.
- Entrepreneur magazine named AAMCO as the top franchise opportunity in 2018. The brand got the award for three consecutive years.
- AAMCO has sister brands under Icahn Automotive Group: Pep Boys, AutoPlus, and Precision Tune Auto Care. These other brands often forward complex auto repair jobs to AAMCO franchise owners.
- According to AAMCO CEO Jim Gregory, the brand is working hard to dominate the complex car repair market. How? By investing in expertise and focusing on growing its market share.
- The brand claims that its business model is “recession-resistant.” After all, cars are turning into computers on wheels these days and owners need skilled workers who can fix them. And AAMCO is gearing itself to be the top brand that can meet the market’s growing demands.
Though the AAMCO franchise cost is arguably higher than you’ll likely invest in opening your own brand, a franchise has its perks. For one, you’ll be using a tried and tested business model, so there’s a lower failure risk. In addition to that, you’ll always have someone to look over your shoulder as you try to reign the local market in a cutthroat industry.
For more franchise-related resources, you may check out Franchise How.