In this FDD Talk post, you’ll learn the following:

• Section I – Background information on the Grease Monkey franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Grease Monkey franchise, based on Item 7 of the company’s 2019 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Grease Monkey franchise, based on Items 5 and 6 of the company’s 2019 FDD

• Section IV – Number of franchised and company-owned Grease Monkey outlets at the start of the year and the end of the year for 2016, 2017, and 2018, based on Item 20 of the company’s 2019 FDD

• Section V – Presentation and analysis of Grease Monkey’s financial performance representations, based on Item 19 of the company’s 2019 FDD, including information on the:

• 2018 average and median number of vehicles serviced per day for the 164 franchised, 61 affiliate-owned, and 225 franchised and affiliate-owned (combined) Grease Monkey centers located in the United States that had been open at least one year as of December 31, 2018

• 2018 average vehicle count; ticket; net sales; cost of goods sold; salaries, wages, and benefits; gross profit; retail operating expenses; office and G&A expenses; and EBITDAR for the 132 franchised, 46 affiliate-owned, and 178 franchised and affiliate-owned (combined) Grease Monkey centers located in the United States that had been open at least one year as of December 31, 2018 and have provided complete profit and loss statements to the franchisor

Section I – Background Information

13 Things You Need to Know About the Grease Monkey Franchise

Secures Up to $20 Million in Franchisee Financing Through ApplePie Capital to Help Fuel Franchise Growth

1.  In late April 2019, Grease Monkey announced that it was working with ApplePie Capital to offer new and existing franchisees access to up to $20 million in debt capital to drive continued expansion across the U.S. Grease Monkey franchisees interested in getting started with a free consultation can contact ApplePie by visiting applepiecapital.com/grease-monkey or contacting Matt Sawicki at matthew@applepiecapital.com.

2.  Ralph Yarusso, chief development officer of Grease Monkey, said, “Grease Monkey is committed to helping our franchisees grow and prosper, and we are excited to launch this program with ApplePie. They are franchising professionals who understand the needs of our franchisees to help foster their growth. Their decision to allocate $20 million to Grease Monkey franchisees will help us achieve our accelerating expansion efforts in key target markets across the U.S.”

3.  Jeff King, director of franchise development for Grease Monkey, added, “As a multi-brand international franchisor, we chose ApplePie Capital as a preferred lender because they took the time to learn about our business model and our core values. Their knowledge of the franchise industry enables them to offer a multitude of loan options to our franchisees. ApplePie’s ability to customize loan programs for a first-time center owner or a multi-center operator, brings a unique component to the relationship that can be challenging to find with other lenders.”

4.  According to Denise Thomas, CEO and co-founder of ApplePie, “ApplePie Capital is thrilled to partner with Grease Monkey to help support their growth more quickly and efficiently. When selecting brands we want to partner with, we look for franchisors with strong unit-level economics, low closure rates, and successful franchisees. Grease Monkey’s track record in these areas made it an easy decision to embark on what we hope will be a long-term partnership. The options we are able to provide often do not require personal collateral, and we have introduced a lower pricing model to help them accelerate their aggressive growth plans.”

Announces CRM Contest Winners

5.  In mid-October 2018, Grease Monkey announced the winners of its first ever CRM Creative Challenge contest. The goal of the contest was to inspire in-house and vendor partner creative teams to develop more compelling customer relationship marketing communications for Grease Monkey’s repeat customers. All the participating teams were briefed on new customer insights gleaned from previous research and directed to use standard promotional offers so that the creative message and design would be the only difference noticeable by the judges.

6. Artwork submissions were evaluated by Grease Monkey’s on-line Customer Advisory Panel managed by Research Results, Inc. The Customer Advisory Panel, made up of new and repeat Grease Monkey customers, judged artwork consisting of existing and new campaigns for both the direct mail and email channels. Each submission was judged for overall appeal and inspiring interest in visiting Grease Monkey again for their next service.

7.  The overall winner, Bullseye Marketing, decisively won three out of the four categories with two new submissions. The third win came from an existing campaign which beat out the new submissions. The winning entries capitalized on three areas: personalization, attention getting graphics, and simple/straightforward layouts.

8.  Long-time partner Classicplus, parent brand of Throttle, won the important 4th category which represents a new type of communication designed to stay connected and relevant to customers between their service intervals visits.

Company History

9.  Grease Monkey was founded in 1978 in Denver, Colorado around the time when the concept of quick oil changes had emerged in the United States. According to Lori Schneider, a Grease Monkey franchise development specialist, “People did not want to take their vehicles in and leave them for half a day at a dealership. There was an opportunity to get consumers to come and have their oil changed and their vehicle serviced in an in-and-out fashion, so the founders brought the quick oil change concept into the Denver market and Rocky Mountain area.”

10.  A year after Grease Monkey was founded, the company began franchising the concept. Initially, Grease Monkey only offered quick oil changes; eventually, other services such as brake services and other light repairs were added.

11.  Previously, Grease Monkey had been operating under the Grease Monkey Holding Corporation, but in 2013, it was merged with Grease Monkey International (GMI). Also in 2013, Grease Monkey acquired the assets and franchise contracts of LubePro’s International, a chain of fast lubrication and automotive maintenance centers located in Illinois, Minnesota, Tennessee, and Wisconsin.

12.  In 2017, Grease Monkey International, LLC was acquired by CenterOak Partners, LLC, a Dallas-based private equity firm with a focus on making control-oriented investments in middle market companies. Today, there are locations across the United States, Latin America, and China.

Entrepreneur’s Franchise 500

13.  Grease Monkey ranked No. 174 on Entrepreneur’s 2019 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of Grease Monkey franchise costs, based on Item 7 of the company’s 2019 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

• Please click here for detailed information on Grease Monkey’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2019 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2016

• Outlets at the Start of the Year:  176
• Outlets at the End of the Year:  160
• Net Change:  -16

2017

• Outlets at the Start of the Year:  160
• Outlets at the End of the Year:  169
• Net Change:  +9

2018

• Outlets at the Start of the Year:  169
• Outlets at the End of the Year:  164
• Net Change:  -5

Company-Owned

2016

• Outlets at the Start of the Year:  33
• Outlets at the End of the Year:  48
• Net Change:  +15

2017

• Outlets at the Start of the Year:  48
• Outlets at the End of the Year:  48
• Net Change:  0

2018

• Outlets at the Start of the Year:  48
• Outlets at the End of the Year:  61
• Net Change:  +13

Section V – Financial Performance Representations (Item 19, 2019 FDD) and Analysis

Part 1 – Average and Median Number of Vehicles Serviced (Centers Operated at Least One Year – Fiscal Year 2018)

• The following charts compile the number and percentage of franchisee-owned and affiliate-owned Centers’ average daily vehicle-count ranges and median daily vehicle-count ranges during January 1, 2018 to December 31, 2018.

• As of December 31, 2018, 164 franchisee-owned and 61 affiliate-owned Centers located in the United States had been open at least one year.

• Grease Monkey determined the average and median vehicle-count per day for each of these Centers and placed each Center in one of four categories.

• The vehicle counts include all vehicles entering a Grease Monkey Center for service.

• Approximately 95% of a Center’s customers purchase the Center’s full-service oil, filter, and lubrication, for centers that do not perform emissions testing or state inspections. Customers also purchase air filters, wiper blades, transmission, radiator, differential, and other services.

A.  Franchisee-Owned Centers (164 Centers)