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Franchise Costs: Detailed Estimates of Mac Tools Franchise Costs (2017 FDD)

by Franchise Chatter on January 25, 2015

in Franchise Costs, Mobile Tool Franchise

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Mac Tools Photo by Roadsidepictures

This post was updated on April 2, 2017 to reflect information from Mac Tools’ 2017 FDD (Item 7).

Detailed Estimates of Mac Tools Franchise Costs Based on Item 7 (Estimated Initial Investment) of Mac Tools’ 2017 Franchise Disclosure Document

1.  Initial Franchise Fee:  $3,000

  • The initial franchise fee covers some of Mac Tools’ expenses of offering and selling Mac Tools franchises and training and assisting new franchisees with matters related to preparing to commence operation of their Mac Tools Businesses.

2.  Annual Fee:  $900

3.  Travel and Living Expenses While Training:  $1,100 to $2,200

  • This estimate includes airfare, meals, and hotel for one person while attending the initial training in Westerville, Ohio. The range of estimates presented above reflects that transportation expenses will vary according to the distance, mode of transportation, and market for airline transportation.
  • This estimate does not include personal expenses.

4.  Initial (Starter) Inventory:  Up to $65,000

  • The amount due for the Starter Inventory Package can be paid in cash or other readily available funds by the franchisee or financed by a third-party lender.
  • The Starter Inventory Package is the minimum required inventory for all starting franchisees. Inventory must be replenished on a weekly basis to serve customers.
  • Included with the Starter Inventory Package is a computer system meeting Mac Tools’ requirements and specifications.

5.  Vehicle Purchase or Lease:  $10,000 to $120,000

  • This estimate will vary significantly depending upon whether a new or used vehicle is purchased. Purchase of a new vehicle may cost between $80,000 and $120,000 and a used vehicle between $10,000 and $70,000.
  • The cost to lease a vehicle is dependent on several factors, including the price of the truck, the year of the truck, and the interest rate charged by the lessor. Mac Tools estimates that your lease of a truck will require a down payment of $0 to $5,000, and monthly payments from $1,200 to $2,000.
  • Purchase or lease of a model of a vehicle approved by Mac Tools is required for the operation of the Mac Tools Business.
  • This estimate does not include an estimate of the cost of outfitting the truck to display the current Mac Tools color scheme, logo, decals, and other display requirements.

6.  Vehicle Painting and Decal Application:  $0 to $8,640

  • New franchisees are required to operate their Mac Tools Businesses utilizing a new or used truck that meets Mac Tools’ current specifications and that displays this color scheme and decal package.
  • If a new franchisee obtains a used truck that already meets Mac Tools’ specifications and that displays the color scheme and decal package, there will be no cost to the franchisee for vehicle painting or decal application.
  • If a new franchisee’s truck does not meet Mac Tools’ specifications, including the display of the color scheme and decals package, the franchisee will be required to make arrangements for work to be performed to bring the truck in line with Mac Tools’ specifications and requirements regarding the color scheme and decal package.
  • This work will likely be performed immediately after the franchisee has successfully completed the initial training program.

7.  Equipment:  $0 to $1,500

  • This estimate includes the one-time cost of tool displays required for display of inventory inside the truck.
  • A franchisee buying a used truck may be purchasing a truck outfitted with tool displays meeting Mac Tools’ specifications and requirements, or a franchisee buying a used truck equipped with tool displays may want to update or add additional tool displays to the truck.
  • A franchisee purchasing a new truck must equip the truck with tool displays meeting Mac Tools’ specifications and requirements.
  • The cost of tool displays required for display of inventory inside the truck ranges between $0 to $1,500.
  • The estimate does not include optional equipment which many franchisees elect to use in their business, such as a fax machine, cell phone, tablet device, and credit card machine.

8.  Payment Processing Services:  $0 to $225

  • Franchisees may, at their option, use payment processing services offered by Franchise Payments Network (“FPN”). FPN offers a mobile method of accepting credit card payments using a card swipe device connected to the franchisee’s smart cell phone or tablet device.

9.  Professional Fees:  $850 to $1,800

  • This is an estimate of your expenses to have an attorney review the franchise documents, as well as the costs of forming a business entity, should you decide to do so.
  • This estimate does not include the possible expenses of a review of the documents by an accountant or business advisor.

10.  Insurance:  $340 per month; $2,040 for first 6 months

  • Coverage limits assumed in the estimate are as follows:
  • commercial auto liability insurance coverage:  $1,000,000;
  • comprehensive general liability insurance coverage:  $1,000,000;
  • inventory and equipment:  $50,000; and
  • business interruption:  $35,000

11.  Uniforms:  $200

  • This estimate covers three uniforms for one individual.

12.  Advertising Associated With Commencement of Business:  $50 to $250

  • Advertising expenditures in connection with commencement of the business are not required. Generally, franchisees have business cards printed for their Mac Tools Business. These amounts are generally not refundable.

13.  Licenses, Permits, and Authorizations:  $50 to $250

  • This is an estimate of various types of business permits and licenses that may be required in your locality, such as truck licenses, sales tax permits, and vendor licenses. You may also be required to obtain other types of licenses, permits, or authorizations.

14.  Additional Funds:  3 to 6 Months (Working Capital):  $20,000 to $50,000

  • This is an estimate only of the range of initial start-up expenses that you may incur. The actual amount of additional funds that you will need depends upon a variety of factors, including the time of year when you start your business, your own management skills, and economic conditions.
  • This estimate is based on management’s experience and expertise in the Mac Tools Business and its experience with businesses opened before the date of this disclosure document and the working capital needs of those businesses. The estimate is for a period of 3 to 6 months.

15.  Total:  $103,190 to $256,005

  • You may be able to finance all or part of the initial investment from third parties.

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