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Midas’ Initial Franchise Fee, Royalty Fee + 28 Other Fees

Published on January 3, 2022 by Franchise Chatter Leave a Comment
in Auto Repair Franchise, Auto Service Franchise, Automotive Franchise, Franchise Fees

Midas Auto Repair Franchise Photo by Lancastrian



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Detailed Information on Midas’ Initial Franchise Fee, Royalty Fee + 28 Other Fees (Items 5 and 6, 2021 FDD)

1.  Application Deposit:  $10,000

  • You must complete and submit an Application for a Midas Shop franchise (“Application”) and other related informational documents pertaining to your operational background, credit history, and financial resources to be awarded a Midas Shop franchise.
  • If you do not sign a Franchise Agreement and pay your initial franchise fee (described below) upon Midas accepting your application, then you must remit a $10,000 deposit in a lump sum with your approved Application.
  • This deposit is applied towards the initial franchise fee.

2.  Initial Franchise Fee:  $15,000 to $35,000

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  • You will sign the Franchise Agreement (the “Franchise Agreement”) either upon Midas’ acceptance of your Application or following Midas’ acceptance of the Application but within 30 days of Midas submitting the Franchise Agreement to you, as it may designate.
  • Upon execution of the Franchise Agreement, you must pay Midas’ standard initial franchise fee of $35,000. However, you may qualify for a lower initial franchise fee.
  • If you own one Other Shop and meet certain criteria, the initial franchise fee is $15,000.
  • Midas will reduce the initial franchise fee to $17,500 for franchisees that are U.S.military veterans and first responders and for franchisees that are corporations, limited liability companies, or other entities for which a U.S. military veteran or first responder owns a majority of the equity interest (“U.S. Military Veteran & First Responder Program”).

3.  Royalty:  2-10% of Net Revenue, up to 11% in certain cases for a Co-Branded Shop franchise

  • Due Date:  Payable on the 10th of each month via ACH debit.
  • Net Revenue includes all revenue from the Franchised Unit, exclusive of sales, use, or gross receipts taxes.

4.  Marketing/Advertising

  • Except as described in Item 6, each calendar year, Midas will expend an amount equal to not less than one-half of the royalties it actually receives from its Midas franchisees for media costs, commissions, and fees; production; and other associated costs for marketing and promoting the products and services sold and performed by Midas Shops.

5.  Warranty Registration Fee:  brake pads or shoes: $2.43 per axle; mufflers: $4.80 each; shocks and struts: $1.04 each

  • Due Date:  The fee is added to the Franchised Unit’s Trade Account Statement upon warranty registration, which payment is due, generally, by the 17th day of the month.
  • Payable to Midas. Fees collected will be used to redeem future warranty claims on parts originally installed on or after the effective date of the program.

6.  Midas Touch Road Hazard Tire Warranty Fees:  $3.95 per tire (1-Year Warranty); $8.00 per tire (3-Year Warranty); increased by $1.25 per tire in states where a consumer liability insurance policy (“CLIP”) is required (currently Ohio, New York, and Washington)

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  • Due Date:  As tires are sold.
  • These fees apply to franchisees that offer the designated Midas Touch Road Hazard Warranty for tires.

7.  Rent, Taxes, and Insurance:  if the property is leased from Midas Realty or Midas Property: the greater of fixed minimum rent ($3,500 to $14,000 per month) or 7% of Gross Sales, plus real estate taxes ($500 to $2,000 per month) and insurance

  • Due Date:  Fixed minimum rent and monthly tax deposit payable the first of each month; plus any gross sales rent in excess of annual fixed minimum rent payable by March 1st of the succeeding year. Monthly payments made via ACH Debit.
  • If the premises is leased or subleased from Midas Realty or Midas Property, then payable to Midas Realty or Midas Property. Fixed minimum rent under a Midas Realty or Midas Property lease increases by a minimum of 2% each year over the 20-year lease term, and under a Midas Realty or Midas Property sublease the fixed minimum rent may increase based on the underlying head lease rent.
  • Under the lease and sublease, every five years Midas Realty or Midas Property at its option may establish a new fixed minimum rent based on fair market value.

8.  Transfer Fee:  for Franchise Agreements dated April 1, 2010 or after, the greater of: (a) $5,000 or (b) 15% of the initial franchise fee charged to new franchisees who own no other Midas Shops. For Franchise Agreements dated before April 1, 2010, 0.5% of the sales price of the business (excluding real estate). If you are transferring more than one Midas Shop at the same time, then Midas will cap the transfer fee for each Midas Shop after the first Shop at a flat fee of $1,250 per Shop.

  • Due Date:  Prior to consummation of transfer.
  • Payable when the Franchise Agreement or a controlling interest in the Franchise Agreement is transferred. No charge if transfer is to an entity you own or control.
  • Additional amounts will be required to be paid if the transferee requests an extension of the remaining term of the Franchise Agreement.
  • A transfer deposit of $5,000 must also be paid by the transferee with its Application to acquire a Shop in a transfer.

9.  Relocation Fee:  $1,000

  • Due Date:  Upon providing notice of intent to relocate.
  • Payable if you move your Midas Shop from one location to another, to compensate Midas for its expenses in reviewing your new site.

10.  Renewal Fee:  one-half of the initial franchise fee charged to franchisees who already own one or more Midas Shops at the time of renewal. The current Renewal Fee is $7,500.

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  • Due Date:  At your option, either in (i) two equal installments (the first on the start of the renewal period and the second on the one-year anniversary) or (ii) twelve equal monthly payments beginning on the start of the renewal period. If you have more than one Midas Shop franchise being extended within any 12-month period, the total of all the renewal fees must be paid in the same number of equal annual installments as the number of franchises so extended, up to 10 installments, from the date of the first extension.
  • You may be required to expend additional funds as a condition of renewal for things like Shop renovation or relocation.

11.  Audit Fee:  cost of audit, plus actual additional royalties found to be due by the audit

  • Due Date:  30 days after billing.
  • Costs of audit payable only if audit shows an understatement of more than 5% of Net Revenues during any consecutive 12-month period, or if you obstruct or fail to cooperate with Midas’ audit.

12.  Interest Charge on Late Royalty Payments:  lesser of 18% per year or maximum rate of interest allowed by law

  • Due Date:  Due 30 days after billing only if payments are overdue.
  • Assessed on past due obligations beginning the 10th day after applicable due date, or beginning on the due date if not paid within 30 days.

13.  Late Charge on Electronic Submission of Monthly Sales Report:  $20 per month

  • Due Date:  The fee is added to the Franchised Unit’s Trade Account Statement, which payment is due, generally, by the 17th day of the month.

14.  Fee for Manually Completing Monthly Sales Report:  currently $100

  • Due Date:  As incurred.
  • If Midas is requested or must manually calculate and create the monthly statement of Net Revenue, then franchisee will pay to Midas its then-current fee for performing this service.

15.  Promotional Material and Supplies:  will vary based upon what you purchase; may be provided free of charge in conjunction with marketing promotions

  • Due Date:  30 days after billing.
  • Midas supplies promotional materials, such as banners, posters, brochures, and supplies (such as estimate and invoice forms) for purchase by you.

16.  Costs and Attorneys’ Fees:  will vary under circumstances

  • Due Date:  As incurred.
  • Payable upon failure to comply with the Franchise Agreement or other situations.

17.  Fleet Program Processing Fee:  1.25% of sales transaction to National Fleet Customer

  • Due Date:  As specified by supplier.
  • Paid to Midas’ third-party billing processor for participation in the Fleet Program.

18.  R.O. Writer Software:  $1,000, but but waived for existing franchises acquiring an existing Midas Shop that uses the R.O. Writer Point-of-Sale system

  • Due Date:  As incurred.
  • Payable to Midas’ third-party designated supplier, CRI, if you use the R.O. Writer Point-of-Sale System.

19.  R.O. Writer Installation Fee:  $1,500, each time

  • Due Date:  As incurred.
  • Payable to CRI for installation of the R.O. Writer system.

20.  R.O. Writer Data Conversion Fee:  $750, if required

  • Due Date:  As incurred.
  • Payable to CRI if an independent location not using R.O. Writer is converting to a Midas Shop.

21.  R.O. Writer Training and Go-Live Support Fee:  $5,500 to $6,500

  • Due Date:  As incurred.
  • Payable to CRI if you are a new franchisee.

22.  R.O. Writer Software Maintenance Fee:  currently, $110 per month, subject to increase upon 30 days’ notice

  • Due Date:  Monthly, via credit card or ACH.
  • Payable to CRI if you use the R.O. Writer Point-of-Sale System.

23.  R.O. DVI Monthly Fees:  $149 per month

  • Due Date:  Monthly, via credit card or ACH.
  • Payable to CRI if you use the optional R.O. DVI module with the R.O. Writer Point-of-Sale System.

24.  R.O. DVI Installation:  $199, each time

  • Due Date:  As incurred.
  • Payable to CRI for installation and training on the optional module.

25.  Smart eCat Epicor Parts & Labor Guide Subscription:  $90 per month

  • Due Date:  Monthly, via credit card or ACH.
  • Midas recommends use of this catalog, although it is not required. Payable to CRI.

26.  MotoLOGIC Repair 3 User Subscription:  $129 per month

  • Due Date:  Monthly, via credit card or ACH.
  • Midas recommends use of this catalog, although it is not required. Payable to CRI.

27.  Liquidated Damages:  $100 per day

  • Due Date:  As incurred and billed.
  • Payable during any period you are in breach of non-monetary provisions of the Franchise Agreement.

28.  Indemnification:  will vary under circumstances

  • Due Date:  As incurred. You must reimburse Midas for all loss, damage, and claims for damage arising out of your operation of the Franchised Unit.

29.  Insurance:  will vary under the circumstances

  • Due Date:  As incurred.
  • If you fail to obtain and/or maintain the insurance coverage required, Midas may, but is not required to, obtain the insurance on your behalf. If Midas obtains the required insurance coverage for you, you must reimburse Midas for the cost of this insurance.

30.  Deferred Maintenance:  will vary under the circumstances

  • Due Date:  As incurred.
  • If you purchase a Midas Shop from an existing franchisee, either the buyer or seller of the Midas Shop franchise must repair conditions of the Midas Shop from Midas’ inspection of the Midas Shop within 90 days of the purchase.


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