Jiffy Lube Franchise Costs, Fees & Owner Salary (2023)

Initial Franchise Fee ($35,000)

‍If the Franchised Center is a new Service Center, meaning that it has not been in continuous operation for at least the previous twelve-month period as a Jiffy Lube Service Center and is not otherwise a Converted or Relocated Center, the franchisee will pay Franchisor a franchise fee of $35,000.

Of this amount, $10,000 is earned by Franchisor and due upon the franchisee’s execution of the Agreement. The remaining $25,000 is earned by Franchisor and due on the 15th day of the month after the Franchised Center opens for business under the trade name "Jiffy Lube".

Royalty Fee (4-5%)

‍Franchisees will pay Franchisor a monthly royalty. If the Franchised Center is a new Jiffy Lube location, during the first six months in which the Franchised Center is open for business, the franchisee will pay no monthly royalty. Thereafter, the franchisee will pay a monthly royalty of four percent (4%) of Gross Sales.

If the Franchised Center is an existing Jiffy Lube location, then the franchisee will pay Franchisor a monthly royalty equal to four percent (4%) of the Gross Sales at the Franchised Center. However, in some cases, the royalty can be five percent (5%) of the "Gross Sales" at the Franchised Center.

Advertising Fee (4-5% of Gross Sales)

‍Franchisees are required to spend on local advertising compliant with the given guidelines an amount equal to two and one-half percent (2.5%) of the Gross Sales of the Franchised Center. This local advertising expenditure requirement can be up to 5% of Gross Sales under certain conditions.

Additionally, franchisees must contribute 1.5% of the Gross Sales of the Franchised Center to a National Advertising Fund (NAF), which is administered to enhance the goodwill and public image of the brand and system through advertising and sponsorships.

Jiffy Lube offers an operations training course specifically designed for Service Center managers. The content and duration of this course are determined by the franchisor. This training is conducted in venues selected by Jiffy Lube.

While the franchisor covers the costs for instructors, classroom facilities, and training manuals, there are certain scenarios where the franchisee might need to chip in. For instance, if the training is held outside the area of Jiffy Lube's main business location, the franchisee might be required to pay a share of the cost of renting classroom space and the travel expenses of the instructors.

Furthermore, franchisees are responsible for the salaries or wages of their employees attending this training. They also need to cover transportation, meals, lodging, and incidental personal expenses during the training period.

The training process at Jiffy Lube is quite comprehensive. Beyond the operations training, there's a web-based training component, which, upon completion, requires a passing test score. There's also on-the-job training (OJT) for skill-building and practice.

Jiffy Lube also offers Leadership Training certification, which is achieved by completing instructor-led training courses. There are multiple options for this, including virtual instructor-led training. The cost for this training varies, with some courses having a tuition fee.

Franchisees do not receive an exclusive territory. Before entering into a Franchise Agreement, an area is negotiated within which the franchisee may locate a site for their service center. This area is described in the New Construction Addendum to the Franchise Agreement.

If the franchisee does not locate a site or build a service center within the specified time, the franchisor can terminate the agreement and sell a franchise in that area to another prospective franchisee.

Once a specific site is approved and committed to within the defined area, that site will be identified in the Rider to the Franchise Agreement. Other franchisees can then develop a service center at any location in that area, including locations previously considered by the franchisee.

This means that while there is a negotiated area for the franchisee to operate, it does not guarantee exclusivity, and other franchisees can potentially operate within the same area.

The franchise agreement stipulates that franchisees must be actively involved in the day-to-day operations of their business. This means that the franchise cannot be treated as a passive investment.

If you're thinking of investing but prefer a hands-off approach, this might not be the ideal opportunity for you. Always ensure you're fully aware of all obligations before diving into any franchise agreement.