Is
Carstar
a franchise?
How many
Carstar
franchises
are there?
What are the
Carstar
franchise
fees?
Initial Franchise Fee ($10,000)
The initial franchise fee for each CARSTAR facility required to be developed is $10,000. With respect to each facility developed, CARSTAR will credit $10,000 of the Development Fee against the applicable Initial Franchise Fee on the date on which the Initial Franchise Fee is payable under the applicable Franchise Agreement.
Royalty Fee (1.5% to 4% of Gross Sales)
Franchisees are required to pay a Monthly Base Franchise Fee, which is the greater of $1,000 or 1.5% of Gross Sales. Additionally, there's a Monthly Growth Franchise Fee of 4% of Gross Sales. The exact percentage can vary based on certain conditions and sales performance.
Advertising Fee (1% to 1.5% of Gross Sales)
Franchisees are obligated to contribute to the Insurance and Marketing Fund. The fee is the greater of $500 or 1% of monthly Gross Sales. This fee can increase to 1.5% of monthly Gross Sales under certain conditions, such as non-compliance with IMF guidelines or failure to maintain the CARSTAR image program.
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
Carstar
franchise?
For those considering a franchise with CARSTAR, there are two primary options available:
- Conversion CARSTAR Facility: This option is ideal for those who already operate an existing auto body repair shop and are looking to integrate with the CARSTAR brand. The estimated initial investment for this option ranges from $23,500 to $165,300. This includes an initial franchise fee and integration fee of $10,000 each, payable to CARSTAR. Other significant expenses include potential costs for furniture, fixtures, and equipment, computer hardware/software, training, initial inventory, signage, and additional funds for the first three months of operation. A detailed breakdown of these costs is provided in the table for the Conversion CARSTAR Facility.
- New CARSTAR Facility: For entrepreneurs looking to start a brand-new facility under the CARSTAR brand, the estimated initial investment ranges from $298,200 to $804,300. This includes an initial franchise fee and integration fee of $10,000 each. The facility costs can vary significantly, ranging from $50,000 to $200,000. Other expenses encompass furniture, fixtures, equipment, computer hardware/software, training, initial inventory, and signage. A comprehensive breakdown of these expenses is available in the table for the New CARSTAR Facility.
Conversion CARSTAR Facility:
New CARSTAR Facility:
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
Carstar
provide
training
to its
franchisees?
Carstar provides a comprehensive training program for its franchisees, which includes various components:
- Initial Orientation Training Program: This mandatory program is approximately 2.5 days of classroom training and 1 day of on-the-job training, conducted in Charlotte, North Carolina, or another location designated by Carstar. The training covers operation standards, CARSTAR Facility image, purchasing procedures, vendor training, productivity reporting, and communications with CARSTAR.
- Additional Training: Depending on the franchisee's experience, knowledge, and performance, additional training may be required. This could be due to new procedures, processes, or technology in the system or to meet requirements established by insurance companies for specific programs.
- Online Courses via Collision University: Franchisees and their employees are required to complete online courses listed in the "EDGE Integration – Store Visit Guide" within their EDGE Integration period. The franchisee pays an annual training fee, partly for technology/license fees and partly for content development.
- Specific Certifications and Compliance: Certain certifications like I-CAR Gold Class certification and I-CAR Welding Qualified certification are necessary, along with compliance with the EDGE Performance Platform and participation in specific partnerships and programs.
Does
Carstar
provides
territory
protection?
Franchisees of CARSTAR are granted territorial protection for their specific development area. During the term of the agreement, neither the franchisor nor its affiliates will grant a franchise for the operation of a CARSTAR Facility to anyone else within the designated development area.
This protection is provided as long as the franchisee complies with the development schedule and remains in material compliance with the terms and provisions of the agreement.
The territorial rights granted are specific to the development area. Outside of this stipulated protection, the franchisor and its affiliates retain the right to develop and operate, and license third parties to develop and operate, any business under any name, including CARSTAR Facilities, in any geographic area.
Can a
Carstar
franchise
be run as
a passive
investment?
Carstar places a strong emphasis on franchisees maintaining active management control over their facility. This means that franchisees must always retain and exercise direct management control over the operations of their facility.
In essence, the Carstar franchise model does not support a purely passive investment approach. Franchisees are expected to be actively involved in the management and operation of their facility, ensuring that the brand's standards and customer expectations are consistently met.
