AAMCO Transmission Franchise Costs, Fees & Owner Salary (2023)

INVESTMENT

$235,000

-

$353,000

LOCATIONS

562

Adam

Updated

April 11, 2024

Is

AAMCO Transmission

a franchise?

Yes,
AAMCO Transmission
currently
accepts
franchise
applications

AAMCO Transmission is a well-established American chain of transmission repair shops, currently under the ownership of the Icahn Automotive Group. The company is headquartered in Horsham, Pennsylvania.

The origins of this chain trace back to 1962 when Anthony A. Martino and Robert Morgan founded it in Philadelphia. Since its inception, AAMCO Transmission has been primarily focused on providing transmission services and comprehensive car care solutions, to retail customers and on a wholesale basis.

These services encompass oil and filter changes, brake services, heating and cooling system maintenance, tune-ups, steering and suspension, factory-recommended maintenance, and related services.

Having began its franchising journey in 1963, AAMCO Transmission has since expanded to nearly 600 locations nationwide. With a legacy of servicing over 45 million cars, it continues to be a trusted name in the automotive industry.

How many

AAMCO Transmission

franchises

are there?

In 2022, there were
562
outlets in
the United
States, of which
549
are franchises, and
13
are corporate-owned.

What are the

AAMCO Transmission

franchise

fees?

Advertising fee

4.00%

Initial Franchise Fee ($39,500)

The total amount of the standard License Fee for a New Franchisee is $39,500. This fee is payable in two installments: an Initial Deposit of $20,000 and the remaining balance of $19,500 due when signing the Franchise Agreement. For Existing Franchisees purchasing an additional franchise, the total License Fee is $17,500, which includes a $5,000 Initial Deposit and a remaining balance of $12,500.

However, if the additional Center is opened within one calendar year after signing the Deposit Agreement, AAMCO may offer incentives such as waiving the additional $12,500 balance and granting a reduced royalty fee.

Royalty Fee (7.5% of Gross Receipts)

Franchisees are required to pay a royalty fee equal to 7.5% of the Gross Receipts of the Center. This fee is collected weekly based on the prior week's Gross Receipts.

Advertising Fee (4% - 5% of Gross Receipts)

Franchisees are obligated to spend on local advertising or pay a continuing advertising fee. For Centers located in one of the top 20 markets as determined by A.C. Nielsen, the amount is the greater of 5% of Gross Receipts or $500 weekly. For Centers in all other markets, the amount is the greater of 4% of Gross Receipts or $400 weekly.

Note: The fees presented here can be found in the Item 5 of the Franchise Disclosure Document. For a complete list of all the fees borne by the franchisee, please consult the Franchise Disclosure Document.

How much does

it cost

to start a

AAMCO Transmission

franchise?

It costs between
$235,000
and
$353,000
to start a
AAMCO Transmission
franchise.
Expenditure Type Cost Range Paid To
Initial License Fee $7,500 - $30,000 AAMCO
Shop Equipment, Supplies, Lifts & Installation $78,400 - $98,000 AAMCO and Third Parties
POS System – Acquisition $2,500 AAMCO
POS System – 3 months Access/Support $500 AAMCO or Supplier
Computers and Phone System – Hardware $6,500 - $10,000 Suppliers (may include AAMCO)
Office Furniture $5,500 - $7,000 Suppliers (may include AAMCO)
Sales Materials $500 - $1,000 AAMCO
Miscellaneous Costs & Professional Fees $4,000 - $10,000 Third Parties
Insurance $1,500 - $2,500 Third Parties
Signs $4,700 - $13,500 AAMCO, Ad Pool, and others
Additional Funds (3 months) $40,000 - $60,000 Suppliers and other Third Parties
TOTAL ESTIMATED INITIAL INVESTMENT $234,800 - $353,200

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Does

AAMCO Transmission

provide

training

to its

franchisees?

Yes,
AAMCO Transmission
provides
training

If you're contemplating joining the AAMCO family, understanding the training and support they extend to their franchisees can be pivotal. Here's a snapshot:

  • Initial Training: Before you can open an AAMCO service center, you're required to attend AAMCO’s "Operator’s Training School" at AAMCO University. This training encompasses both classroom instruction and hands-on experience. The duration and content of this training are tailored to ensure franchisees grasp the nuances of running their service center efficiently. It's worth noting that all expenses related to travel, lodging, meals, and other associated costs during this training period are to be borne by the franchisee.
  • Business Coach Training: For those who are either not current franchise owners of an operational AAMCO center or are not signing the agreement due to the purchase of an existing AAMCO center directly from another franchisee, there's a "Business Coach" on-site training program. This program spans five weeks and is conducted on-site, ensuring that the franchisee and their staff are well-trained within the initial thirteen weeks of the center becoming operational. A fee of $10,000 is associated with this training.
  • Ongoing Training and Meetings: AAMCO believes in the continuous growth and development of its franchisees. As such, franchisees might be directed to attend additional training sessions or meetings at various locations as deemed necessary by AAMCO.

Does

AAMCO Transmission

provides

territory

protection?

Can a

AAMCO Transmission

franchise

be run as

a passive

investment?

AAMCO emphasizes the importance of franchisees being actively involved in the management and operation of their centers.

While AAMCO strongly encourages personal participation in the direct "on-premises" management and operation, franchisees have the option to hire a customer service manager for their AAMCO Center.

This manager, however, must complete AAMCO's customer service manager training and any other retraining that AAMCO mandates.

Additionally, if AAMCO requests, the customer service manager must sign a confidentiality agreement to maintain the confidentiality of AAMCO's trade secrets and proprietary information.

In essence, the AAMCO franchise model does not support a purely passive investment approach. While there's an option to hire a customer service manager, the brand emphasizes the importance of training and hands-on management.

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