Updated on March 17, 2019.
Detailed Estimates of Midas Franchise Costs Based on Item 7 (Estimated Initial Investment) of Midas’ 2018 Franchise Disclosure Document
For a New (8-Bay) Midas Shop
1. Initial Franchise Fee or Minimum Site Payment: $0 to $30,000
- If an Application deposit is required, the deposit of $10,000 is applied towards the initial franchise fee or Minimum Site Payment, as applicable.
- All initial franchise fees are deemed fully earned once Midas receives them and are non-refundable, except that the $10,000 Application deposit may be refundable under limited circumstances where Midas rejects or terminates the Application, and the initial franchise fee may be refundable, less $10,000, if you are unable to obtain Midas’ approval of a site.
2. Marketing Support Program: $5,000
- Midas will provide Matching Funds for your Grand Opening Activities as described in the “Marketing Support Program” section in Item 5.
3. Travel and Living Expenses While Training: $1,000 to $7,800
- You are responsible for all transportation, lodging, meals, and other expenses associated with the Operations Training Program for you and your managers and employees. There is no charge for the training itself.
- The expenses estimated in this Item are for one person to attend training. The amount will vary depending on travel distance and mode of travel, lodging requirements, and other related personal costs.
4. Security Deposit, License, and Permits: $0 to $14,000
- You may be required to pay a security deposit for the leased premises. Typically, a security deposit will be equal to the amount of one month’s rent and taxes, but this amount may vary depending upon negotiations with the landlord. Generally, the security deposit is refundable to the extent it is not applied.
- Various permits may be required and may include building inspection fees and occupational license fees.
- Utility companies may also require a deposit before the installation of utilities and telephones.
5. Rent and Real Estate Taxes (3 months): $15,000 to $42,000
- Typical locations for Midas Shops are in retail and commercial areas. The typical Midas Shop (8-bay) has 4,500 to 5,500 square feet. The cost of acceptably located real estate is estimated to be between $400,000 and $700,000.
- The cost of constructing a typical Midas Shop is estimated to range between $600,000 and $725,000.
- Your monthly rent and real estate taxes for a new Midas Shop will typically range between $5,000 and $14,000, depending on factors such as size, condition, and location of the leased premises. Provided, however, if you lease or sublease the property from MRC or MPI, your actual rent will be the greater of the fixed minimum rent ($3,500 to $12,000 per month) or 7% of the Franchised Unit’s Gross Sales.
6. Warranty Registration Fee (3 months): $150 to $2,000
- The current warranty program provides that Midas will assess a warranty registration fee against each Midas Shop’s trade account in each instance that a Midas lifetime muffler, brake shoe, brake pad, shock, or strut is installed and the corresponding warranty is registered with Midas.
7. Equipment and Tools: $50,000 to $151,000
- The cost of this equipment may vary depending upon whether the equipment is purchased new, purchased used, or leased. The cost estimates shown here assume the equipment is purchased new.
- Midas does not finance any of these costs. However, it may assist you in locating financing opportunities from third party vendors.
8. Shipping and Installation Costs – Equipment: $5,000 to $20,000
9. Computer, Hardware, and Telephone System: $6,000
10. Office and Waiting Room Furniture and Point-of-Purchase Materials: $13,000
- You must purchase or lease furniture for your business office and customer lounge, and fixtures as well as point-of-sale materials according to Midas’ specifications, as described in the Manual or other written communications. The amount in the tables includes shipping and installation.
11. Branding: $10,000 to $25,000
- You must purchase certain interior and exterior signs for the identification of your Franchised Unit according to Midas’ specifications, as described in the Manual or other written communications.
12. Initial Inventory and Supplies: $25,000 to $50,000
- You must purchase initial inventory and supplies for the operation of the Franchised Unit.
13. R.O. Writer Software: $0 to $5,000
14. R.O. Writer Software Maintenance Fee (3 months): $0 to $330
15. R.O. Touch Installation and Monthly Fees (3 months): $0 to $400
16. Smart Status Installation and Monthly Fees (3 months): $0 to $400
17. Epicor Parts & Labor Guide Subscription (3 months): $0 to $300
18. MotoLOGIC Repair 3 User Subscription (3 months): $0 to $357
19. Insurance (3 months): $1,500 to $4,500
- This is the estimated cost for three months of general liability or garage liability insurance ($2 million aggregate minimum requirement), garage keeper liability insurance ($60,000 direct primary minimum requirement), employer liability insurance ($1 million/$1 million/$1 million minimum requirement), and auto insurance ($2 million minimum requirement) for each location and Midas Shop that you own and operate.
- This estimate does not include workers’ compensation insurance coverage, as required by state law.
20. Legal and Accounting: $1,000 to $3,500
- This item is the estimated cost of basic legal and accounting services provided to you by legal and accounting firms and includes legal and administrative fees and costs for corporate or other business entity organization start-up.
21. Additional Funds (3 months): $40,000 to $65,000
- This entry estimates additional funds you may need for the first three months of operation, including payroll costs (but not including any draw or salary for you) and working capital for other expenses that could exceed receipts.
22. Miscellaneous: $3,000 to $5,000
- You may incur other expenses due to local requirements and/or to purchase additional items of equipment.
23. Total Estimated Initial Investment: $181,650 to $459,587
- This table does not include royalties. This total assumes that the real property and building for the Franchised Unit will be leased by you.
- These figures also do not include the cost of any investigation into or compliance with various Federal, state, or local environmental laws, statutes, regulations, or ordinances relating to the use, handling, treatment, storage, disposal, and recycling of oil, used oil, oil filters, and other substances which are designated to be hazardous.