What is the business model of a Snap-On Tools franchise?
A Snap-On Tools franchise is in the business of selling exclusive, premium tools and equipment solutions to professional tool users. Snap-On Tools develops, manufactures, and markets a product line of over 22,000 tools, which are widely recognized by industry professionals as having the highest quality in the business.
Snap-On Tools specializes in hand tools and tool storage solutions, diagnostic equipment, information and management systems, and “under-car” shop implements like hydraulic lifts and tire changers.
Who are the typical customers of a Snap-On Tools franchise?
Snap-On Tools sells to technicians in the auto, marine, and aviation industries, vehicle manufacturers, utilities, and government and industrial organizations.
What is the retail format of a Snap-On Tools franchise?
Snap-On products are sold in “mobile tool stores,” which are basically vans stocked and merchandised with their most popular products, utilizing every last inch of space, including the ceiling. Customers can also order any item in the Snap-On Tools catalog and their order is delivered directly to them in these vans.
Since the retail stores are mobile, do Snap-On Tools franchisees have protected territories?
Yes, the great thing about a Snap-On Tools franchise is that every franchisee has a protected list of calls. A franchisee does not have to worry about other Snap-On Tools franchisees encroaching on his territory because he has the exclusive right to sell to all customers on his list.
What is the initial investment for a Snap-On Tools franchise?
The initial investment ranges from $150,614 to $289,080.
Does Snap-On Tools offer financing to its franchisees?
Yes. This is one of the key advantages of investing in a Snap-On Tools franchise that not many other franchise companies offer. Not only does this make it easier for prospective franchisees to afford buying a Snap-On Tools franchise, it also shows a lot of confidence by the franchise company that their business model is profitable and that their franchise system works.
So, if a franchisee takes advantage of in-house financing from Snap-On Tools, the initial capital outlay ranges from $38,778 to $80,071. And this already includes working capital of $8,974 to $13,940.
Is there any other financing program offered by Snap-On Tools that makes buying a franchise even more affordable?
Yes. They have a Gateway Franchise Program, which enables a prospective franchisee to operate the business for 2 years and build equity in the business before making the full investment.
A participant in the Gateway Franchise Program can expect to spend somewhere between $17,925 to $30,672 out of pocket, with the total investment topping out at around $83,941.
What is the net worth requirement for a Snap-On Tools franchisee?
A prospective franchisee must have a minimum net worth of $30,000.
What is the initial franchise fee?
The initial franchise fee ranges from $5,000 to $15,000, depending on the size of the territory.
What is the ongoing royalty fee?
According to Entrepreneur Magazine’s website, the ongoing royalty fee is a flat monthly fee of only $102. If this number is accurate, it’s by far the smallest royalty fee I’ve encountered in any franchise business, and makes a Snap-On Tools franchise hugely attractive.
Does Snap-On Tools require its franchisees to contribute to a national or regional marketing/advertising fund?
No.
What kind of training is provided to Snap-On Tools franchisees?
The first phase of training consists of 1 week of classroom training at a regional center. During this phase, the franchisee learns the basics of what’s needed to run the business successfully, including the features and benefits of the most popular tools in the product catalog, how to overcome obstacles in order to close the sale, and how to read financial reports.
The second phase of training involves an experienced franchise developer actually riding the truck with the new franchisee for 3 weeks. This hands-on coaching and mentoring ensures that the franchisee gains the knowledge and confidence needed to run the business day-to-day. The franchise developer shows the new franchisee how to find products and solutions in the company’s catalog to satisfy his customers’ needs, how to use the computer and pre-lists to accomplish daily tasks, and how to close the sale, among others. The franchise developer serves as a continuing resource and mentor to the franchisee long after the 3 weeks of training are over.
Finally, the franchisee benefits from ongoing training in the form of seminars and annual conventions.
How well does Snap-On Tools rank in the major franchise lists?
Very well.
#6 in Franchise Direct’s Top 100 Global Franchises (2011)
#24 in Entrepreneur Magazine’s Franchise 500 (2011)
#7 in Entrepreneur Magazine’s Top Homebased Franchises List (2011)
#22 in Entrepreneur Magazine’s List of America’s Top Global Franchises (2011)
#36 in Franchise Help’s Social Media Ranking of Franchises (2011). This #36 ranking was as of April 1, 2011 when Snap-On Tools had 107,463 Facebook fans. As of May 21, 2011, the company had 120,439 Facebook fans. I find this number simply astounding considering that the customers of Snap-On Tools are professional tool users. This just goes to show how well known and respected this brand is. (Snap-On Tools’ sponsorship of car racing teams must have a little something to do with this.)
What do the franchisees of Snap-On Tools like most about the business?
The franchise website of Snap-On Tools gives us a glimpse into a day in the life of 3 successful franchisees. What impresses me the most is how much these franchisees love their businesses and the lifestyle it affords them. All of them seem to really enjoy interacting with their customers, and they showed genuine admiration and respect for the franchise company.
The 2 franchisees with families both mentioned how owning a Snap-On Tools franchise has brought them closer to their children. The children help out in merchandising the trucks and they brainstorm ways to sell more products. Another benefit to owning a family business like Snap-On Tools is that the children learn the value and dignity of work and develop a good work ethic at a young age.
You might also be interested in reading my Matco Tools Franchise Review.
http://www.youtube.com/watch?v=3Bj7gW-o7bM
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Great information. Will share this to some of my clients. Thanks for the FAQ!