Car-X Franchise Costs, Fees & Owner Salary (2023)

INVESTMENT

$315,000

-

$512,000

LOCATIONS

145

Adam

Updated

April 11, 2024

Is

Car-X

a franchise?

Yes,
Car-X
currently
accepts
franchise
applications

Car-X, headquartered in Schaumburg, Illinois, is a chain of automotive repair shops specializing in routine maintenance and auto repairs such as oil changes, tires, brakes, and more.

Founded in 1971 by a group of experienced muffler shop owners with a focus on exhaust systems, Car-X has evolved into a prominent player in the automotive service industry. As of 2020, it boasted a network of 95 franchised units and 57 company-owned locations.

Car-X remains dedicated to excellence and embraces technological advancements, solidifying its position as a leader in the thriving automotive repair sector. It offers aspiring entrepreneurs a compelling business opportunity, backed by robust systems, a stellar reputation, and a passion for delivering outstanding customer experiences.

How many

Car-X

franchises

are there?

In 2022, there were
145
outlets in
the United
States, of which
76
are franchises, and
69
are corporate-owned.

What are the

Car-X

franchise

fees?

Royalty fee

2.5% to 5%

Advertising fee

upto 10%

Initial Franchise Fee

A fee of $25,000, which may vary under certain circumstances, such as for U.S. military veterans or first responders, where it is reduced to $10,000. Payment is due before opening the franchise.

Initial Advertising Fee

A fee ranging from $5,000 to $10,000, depending on the market size and media offerings of the franchise location. This fee is paid along with the initial franchise fee.

Royalty

For the first 180 days of operation, the royalty fee is 2.5% of gross sales, and thereafter, it is 5% of gross sales, not exceeding 10% of weekly gross sales.

Advertising Payments

Franchisees must pay up to 10% of their gross sales for advertising, with payments due weekly.

Late Charge and NSF Fees

A late charge of 1.5% per month and NSF fees as applicable, along with additional reasonable administrative fees.

Audit Fee

In cases where an audit reveals underreported sales, a surcharge of 25% of the royalty and advertising payments on the unreported sales is imposed, along with the cost of the audit.

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

Car-X

franchise?

It costs between
$315,000
and
$512,000
to start a
Car-X
franchise.
Type of Expenditure Amount
Reservation Deposit $6,000 (One payment)
Initial Franchise Fee $25,000 (One or Two payments)
Equipment and Furniture $220,000 to $275,000 (One payment)
Signs $17,000 to $50,000
Inventory $12,000 to $18,000
Lease and First Month’s Rent $8,000 to $30,000
Miscellaneous Pre-Opening Expenses $1,200 to $4,000
Travel and Living Expenses While Training $5,000 to $10,000
Initial Advertising Fee $12,000 to $60,000
Additional Funds – 3 months $315,200 to $512,000
Total Estimated Initial Investment $315,200 to $512,000

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

Car-X

provide

training

to its

franchisees?

Yes,
Car-X
provides
training
  1. Initial Training: The franchisor offers an initial course of instruction covering the operation of the Franchise Business and the use of the Car-X System. A Principal of the Franchisee must attend and complete this training program before opening the franchise business. This training is provided without charge, although the Franchisee is responsible for their own and their employees' salaries, travel, food, and lodging expenses during training.
  2. Additional Training, Sales Programs, and Meetings: A Principal of the Franchisee is required to attend additional training, sales programs, and meetings at locations and times specified by the Franchisor, at the Franchisee's expense.
  3. New Dealer Training Program: The program may include in-person instruction with materials like handouts, the Operations Manual, training videos, role play, and hands-on work at a Car-X Center. The length of the training program is up to four weeks, depending on the franchisee's knowledge and experience.

Does

Car-X

provides

territory

protection?

The franchisor offers limited territory protection to franchisees. The "Protected Area" is generally defined as a three-mile radius around the franchise location, excluding existing or under-development Car-X Centers. Within this area, the franchisor won't operate or authorize others to use the Car-X trademarks.

However, this protection doesn't extend to marketing territory or customer exclusivity, allowing both the franchisor and other franchisees to market and sell to customers within this area. The franchisor also retains the right to sell products under the Car-X trademarks through alternative channels like the Internet and direct marketing both within and outside the protected area.

Can a

Car-X

franchise

be run as

a passive

investment?

Car-X expects active involvement from franchisees, limiting the possibility of passive investment. Individual franchisees must fully manage and operate their Car-X Center, emphasizing a hands-on approach.

In cases where the franchise is owned by a corporation or entity, principals with significant equity or voting interest are required to actively manage and operate the franchise. 

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