The automotive repair industry in the United States is a massive market, currently valued at $188.1 billion and encompassing approximately 290,000 auto repair shops as of 2024. If you’re considering entering this lucrative sector, or already involved and seeking to benchmark your business’s financial performance, understanding the profitability of franchise auto repair shops is crucial. You might be asking, just how much does a franchise auto repair shop profit? What are the real costs involved in starting and running such a business?
To provide data-driven answers, Car Repair Online has analyzed financial data from over 3,300 auto repair businesses across the United States. This comprehensive study, based on publicly available 2023 data, focuses on businesses affiliated with 20 of the largest franchises, including names like Carstar, Fix Auto USA, and Car-X. Whether you are evaluating franchise opportunities or simply curious about the financial landscape of auto repair, this article breaks down the key factors influencing revenue, startup costs, and, most importantly, profitability.
We will address these core questions with insights from our in-depth analysis:
- What is the average revenue for a franchise auto repair shop?
- What are the typical startup costs associated with opening a franchise auto repair shop?
- How profitable can a franchise auto repair shop be?
Decoding the Revenue of a Franchise Auto Repair Shop
Our analysis of nearly 2,800 franchise auto repair businesses reveals that the average annual revenue stands at $1,226,000. It’s important to note that revenue figures can fluctuate significantly based on factors such as geographic location, the range of services offered, and the overall scale of operations. To provide a clearer picture, let’s examine the median revenue across various prominent franchises:
| Franchise | Number of Businesses | Median Revenue |
|---|---|---|
| Tire Pros | 623 | n.a. |
| Carstar | 430 | $2,265,000 |
| Fix Auto USA | 178 | $2,391,000 |
| Car-X | 145 | $778,000 |
| Merlin Complete Auto Care | 24 | $1,150,000 |
| Tuffy Tire and Auto Service | 163 | $1,344,000 |
| Abra Auto Body & Glass | 57 | n.a. |
| Honest-1 Auto Care | 64 | $1,149,000 |
| Maaco | 398 | $1,281,000 |
| Meineke Car Care Centers | 705 | $897,000 |
| Rad Air Complete Car Care | 10 | $1,102,000 |
| Weighted Average Revenue | 2,797 | $1,225,778 |
* non available: some franchisors do not disclose publicly that information
Initial Investment: Understanding Franchise Auto Repair Shop Startup Costs
Entering the franchise auto repair business requires a substantial initial investment. Our data indicates that startup costs can range from $235,000 to $1,348,000. This wide range underscores the variability in investment depending on the franchise brand, location specifics, and the size and scope of the operation.
To break down this broad range, let’s delve into the investment specifics for different franchises. The following table outlines the low and high estimated investment ranges:
| Franchise | Low Investment | High Investment |
|---|---|---|
| Tire Pros | $12,000 | $483,000 |
| Carstar | $298,000 | $804,000 |
| Fix Auto USA | $170,000 | $3,090,000 |
| Car-X | $315,000 | $512,000 |
| Merlin Complete Auto Care | $265,000 | $534,000 |
| Tuffy Tire and Auto Service | $229,000 | $729,000 |
| Abra Auto Body & Glass | $264,000 | $4,569,000 |
| Honest-1 Auto Care | $223,000 | $998,000 |
| Maaco | $276,000 | $1,016,000 |
| Meineke Car Care Centers | $227,000 | $562,000 |
| Rad Air Complete Car Care | $146,000 | $573,000 |
| Average Investment | $235,000 | $1,348,000 |
For a medium-sized auto repair franchise, with an estimated startup budget between $200,000 and $500,000, typical cost breakdowns include:
- Equipment and Fixtures: $131,000 – $193,000
- Inventory: $5,000 – $24,000
- Leasehold Improvements: $8,000 – $64,000
- Training Expenses: $3,000 – $5,000
- Pre-Opening Expenses: $10,000 – $20,000
- Grand Opening Advertising: $7,500 (approximate)
- Signage: $20,000 – $100,000
- Business Licenses and Permits: $500 (approximate)
- Real Estate Costs (Initial Rent): $0 – $30,000
- Additional Funds (3 months working capital): $10,000 – $50,000
- Insurance (3 months): $4,000 – $5,000
Franchise Auto Repair Shop Profitability: What to Expect
Profitability is the bottom line, and franchise auto repair shops demonstrate a healthy average operating profit margin of 26%. This figure represents profit after covering operating expenses, but before accounting for taxes and interest.
Looking at specific franchise data provides further insight into profitability metrics. The following table details key financial ratios:
| Franchise | COGS % | Gross Profit % | Labor Costs % | Operating Profit % |
|---|---|---|---|---|
| Car-X | 35.2% | 64.8% | 30.3% | 19.9% |
| Merlin Complete Auto Care | 28.1% | 71.9% | 16.1% | 38.6% |
| Tuffy Tire and Auto Service | 30.8% | 69.2% | 28.2% | 26.3% |
| Meineke Car Care Centers | 26.3% | 73.7% | 19.2% | 24.2% |
| Rad Air Complete Car Care | 25.3% | 74.7% | 24.7% | 21.0% |
| Average | 29.14% | 70.86% | 23.7% | 26.0% |
Key Operating Costs for a Franchise Auto Repair Shop
Understanding the cost structure is essential for managing and maximizing profit. The primary operating costs for a franchise auto repair business typically include:
- Cost of Goods Sold (COGS): This encompasses direct expenses for repair services, primarily parts and materials, typically ranging from 25-35% of revenue.
- Labor Costs: Salaries, wages, benefits, and related expenses for technicians and support staff, generally accounting for 16-30% of revenue.
- Rent and Utilities: Costs associated with leasing or owning the business premises and essential utilities, usually between 5-10% of revenue.
- Marketing and Advertising: Expenses for business promotion, including digital and traditional marketing, approximately 1-5% of revenue.
- Insurance: Premiums for various necessary insurance coverages, around 2-4% of revenue.
- Supplies and Equipment Maintenance: Costs for maintaining and replacing equipment and consumable supplies, about 2-5% of revenue.
- Administrative Expenses: Overhead costs like office supplies and administrative support, roughly 5-10% of revenue.
- Training and Development: Investment in staff training to keep skills current, around 1-3% of revenue.
- Miscellaneous Expenses: Other operational costs such as travel, uniforms, and software, approximately 1-3% of revenue.
Profit & Loss Example: Maaco Franchise
To illustrate a real-world example, consider the profit and loss statement of Maaco franchises. With 398 locations in 2024, Maaco shops achieve an average yearly revenue of approximately $1,340,000 and an operating profit margin of 16.8% per month.
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Auto Repair Financial Model Template | Excel Spreadsheet
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