Considering a Jiffy Lube Franchise? Don’t Overlook These 19 Important Franchise Fees

Updated July 28, 2019.

If you are considering a Jiffy Lube franchise, don’t get blindsided by these 19 important franchise fees (from the initial franchise fee, to the royalty fee, to 17 other fees found in Items 5 and 6 of Jiffy Lube’s 2019 FDD).

1.  Franchise Fee:  $0 to $35,000

• Under the Product Supply Franchise Agreement, the franchise fee for a new service center (that is, a service center that either has never operated before or has operated for less than a year under a trade name other than “Jiffy Lube”) is $35,000, of which $10,000 is paid when the Franchise Agreement is signed, and the balance of which is paid on the 15th day of the month after the month in which the service center opens for business.

• The franchise fee for an operating service center that is being “converted” into a Jiffy Lube service center is $17,500, all of which is paid when the Franchise Agreement is signed.

• There is no initial franchise fee under the Non-Product Supply Franchise Agreement, which is only offered (in very limited circumstances, depending on the language contained in the underlying Franchise Agreements) to franchisees that seek to renew an existing Non-Product Supply Franchise Agreement, or seek to purchase an existing service center operating under a Non-Product Supply Franchise Agreement.

2.  Royalty Amount:  under the Non-Product Supply Franchise Agreement, 5% (or 4% of Gross Sales if you pay the Royalty on or before the due date). Under the Product Supply Franchise Agreement, for new-to-system locations (either conversion sites or new locations), 0% of Gross Sales for 1st 6-month period of operation, and 4% (or 3% of Gross Sales if you pay the Royalty on or before the due date) for 7th month of operation onward (5% if the Product Supply Franchise Agreement is terminated).

• Monthly royalty fee will be reduced by 1% on all tire rubber revenue for Jiffy Lube Multi-care service centers under the Jiffy Lube Multi-care Franchise Agreement Addendum.

• Due Date:  Monthly on the 15th day of each month based on Gross Sales from the preceding month. The first payment will be due on the 15th day of the 7th month after the month in which the Service Center opens for business.

• “Gross Sales” means all receipts for goods and services sold, except sales taxes, proceeds of sales of recovered materials, and amounts refunded to customers.

• Jiffy Lube offers a prompt payment discount under which you may deduct from your royalty payment 1% of Gross Sales. To be eligible to receive this discount, you must be current in all of your obligations to Jiffy Lube and its affiliates and subsidiaries, and you must pay the monthly royalty on time.

3.  Remedial Expenses:  an amount that Jiffy Lube specifies if you have breached a provision of the Franchise Agreement and such breach results in harm to the Jiffy Lube brand or Jiffy Lube or other Jiffy Lube franchisees

• Due Date:  In connection with any remedial plan to help mitigate harm caused.

• Remedial activities could include a requirement that additional amounts be spent on advertising, mystery shopping, or other such activities as you and Jiffy Lube agree.

4.  POS Support Charge:  Jiffy Lube’s then-current fee, which will not exceed $160 per month per POS System installed, unless approved by TSAB or required under a contract with Jiffy Lube’s POS System support provider that has been approved by Jiffy Lube and the TSAB

• Due Date:  Monthly.

• Jiffy Lube’s then-current fee, which will not exceed $160 per month per POS System installed.

5.  Hardware Support:  currently $68 per month (prices are subject to change on 30 days’ notice upon the approval of TSAB)

• Due Date:  Monthly.

6.  Data Delivery Service (optional):  monthly fee based on the number of stores operated by you (currently $200 for 1 to 25 stores, $400 for 26 to 99 stores, or $850 for > 99 stores), plus operational and maintenance expenses

• Due Date:  Monthly.

7.  Training Expenses:  expenses Jiffy Lube incurs when it offers training for you or your managers; this does not include wages or salaries of attendees for which you are responsible

• Due Date:  At the time of training.

• Jiffy Lube offers web-based training and instructor-led training at designated training stores at no charge; you must pay salaries and expenses of individuals you send to Jiffy Lube’s training courses.

8.  Product Testing Expense:  expenses Jiffy Lube incurs in testing a product you want to use, but which it has not included in a list of similar products that meet its standards

• Due Date:  At the time of testing.

9.  Fleet Processing Charge:  an amount Jiffy Lube may specify at times during the term of the Franchise Agreement

• Due Date:  Currently, $50 per fleet invoice where automatically approved by the Auto Integrate fleet invoice verification program.

• Deducted from credits you earn by providing goods and/or services to fleet companies or consumers with which Jiffy Lube has a credit arrangement or who qualify for benefits under such an agreement.

• Fleet credits may be applied to reduce your debts to Jiffy Lube and its affiliates.

10.  Jiffy Lube Multi-care National Warranty Program:  $7 per month

• Due Date:  Monthly.

• Applies to service centers participating in the Jiffy Lube Multi-care Program.

• This fee is paid directly to Jiffy Lube’s designated program administrator.

11.  Audit Expenses:  expenses Jiffy Lube incurs in the course of auditing your books or financial records

• Due Date:  When an audit is conducted.

• These expenses are only due if Jiffy Lube finds an understatement of 2% or more of your Gross Sales during an audit.

12.  Service Charges:  the lesser of (a) 2% per month or (b) the highest rate permitted on all past due amounts

• Due Date:  When any obligation to Jiffy Lube or its affiliates is not paid when due.

13.  Transfer Fee:  $3,500, plus Jiffy Lube’s actual expenses

• Due Date:  At the time of a transfer.

• No transfer fee may be charged on a transfer to the family of a deceased or incapacitated franchisee, or for a non-controlling interest in the franchise.

14.  Renewal Fee:  $10,000 for the renewal term, subject to adjustment using the Consumer Price Index (utilizing 1982-84 = 100 as a base year)

• Due Date:  At the time of renewal of the Franchise Agreement.

15.  Relocation Fee:  $7,500

• Due Date:  On signing Franchise Agreement.

• Applies if you close a service center with Jiffy Lube’s consent more than 5 years before the expiration of the initial term and the new location qualifies as a Relocated Center with Jiffy Lube’s consent.

16.  National Advertising Fund (the “Ad Fund”) Contributions:  1.5% of Gross Sales under the Product Supply Franchise Agreement; not applicable to franchisees operating under a Non-Product Supply Franchise Agreement

• Due Date:  Monthly.

17.  Cooperative Advertising:  under the Non-Product Supply Franchise Agreement, 5% of Gross Sales. Under the Product Supply Franchise Agreement, 2.5% of Gross Sales.

• Due Date:  On a monthly basis.

18.  Local Advertising:  5% of Gross Sales; 4% if you sign the Product Supply Franchise Agreement

• Due Date:  Annual expenditure requirement.

• This amount will be reduced by your contributions to the Ad Fund and cooperative advertising, as applicable.

19.  BTS Development Reimbursement:  $25,000

• Due Date:  Due within five business days of your notice to Jiffy Lube that you wish to terminate your Build to Suit Development Agreement.

• Applies if you elect not to proceed with the development of a Service Center at a Preferred Site (both terms as defined in the Build to Suit Development Agreement).