Franchising is one of the best ways to own a business and earn a lot of money. Because of this, a lot of people are already franchising one business and another. Restaurants are the most common one. However, you can franchise other types of businesses aside from restaurants if you don’t want to follow the mainstream. You can instead franchise an automobile related business instead such as Jiffy Lube. Jiffy Lube is an American brand car shops that specialize vehicle oil change. This can be a good option for you especially if you’re a car person. But first, how much does Jiffy Lube franchise cost?
Average Jiffy Lube Franchise Startup Fee
Jiffy Lube first started in 1979. This was the time when car services on gas stations were replaced by convenience stores. Change, Inspect, Check or Fill, and Clean. This is the signature plan of Jiffy Lube whenever they are performing an oil change. Franchising Jiffy Lube will let you have the name of recognition, world-class training, and a wide-range network of support. As of 2017, Jiffy Lube is rank #5 in Best Oil Change Franchise and that is according to Franchise Rankings.
This company is looking for franchisees with high management and social skills. They are also looking for franchise owners that have a high commitment to their systematic approach to satisfying their customers. However, Jiffy Lube is not increasing internationally as of now. This means that you should be situated in the United States or Canada. If you think you got this requirement, you can request more information by visiting Jiffy Lube’s website.
Today, there are more than 2,000 franchises of Jiffy Lube in the United States alone and around 45 in Canada. But before they became a franchisee, they were required by the company to have at least $150,000 liquidated assets and $500,000 net worth.
Jiffy Lube franchise cost can run around $220,000 up to $400,000 or more. The price depends on many factors. Here is the breakdown of the total cost:
- Initial Franchise Fee – This is the first and foremost cost you will have to make. If you qualify with their requirements, you will have to pay $35,000 for the Jiffy Lube franchise startup fee. This agreement term only lasts for 20-years. After the term expires, you will need to pay the renewal fee of $10,000 if you want to renew.
- Building Conversion – This only applies if you already have a building that only needs conversion or renovation to make it a Jiffy Lube shop. The cost will run around $17,500.
- Rental and Security Deposit – You should expect to spend at least $8,000 on the lower end and $20,000 on the higher end for the first month’s rental and the security deposit.
- Equipment, Fixtures, Signage – This can be the biggest factor that can add up to your total Jiffy Lube franchise cost. This depends on the size and location of your establishment. On the lower end, expect to spend around $120,000 and $225,000 on the higher end.
- Startup Inventory – You will need to purchase your initial inventory for your business to be complete. Expect to spend around $20,000 on the lower end and $30,000 on the higher end.
- Marketing – This is another expense you should consider. Although, this can be avoided but it is good for your business. Opening marketing cost can run around $15,000 up to $20,000.
- Insurance and Permits – Your business won’t be allowed to operate if you don’t have the complete insurance and permits. Expect around $10,000 up to $20,000 to be spent on a 1-year premium insurance.
- Working Capital – Since you will not be earning much for the first few months of your business’ operation, you will need to prepare a working capital. As for Jiffy Lube businesses, owners prepare a working capital equivalent to 6 months’ expenses. The cost would run around $45,000.
- Training –A training will be required before you Jiffy Lube allows you to open a business. Training usually runs for several weeks. The training will provide you and your employees with a great understanding of the standard operations of Jiffy Lube. This factor may cost you around $1,000 on the lower end and $5,000 on the higher end.
However, the training doesn’t end there. You and your managers are still required to attend training every 5 years.
Now that you know how much is Jiffy Lube franchise startup fee, the next thing you should know is the additional fees needed to run your business.
- The first additional fee you will have to consider is the royalty fee. This is the ongoing fee that is separated from the initial franchise fee that you are going to pay to the franchisor. As for Jiffy Lube, you will have to pay 4 percent of your gross sales during the 7th-month operation of your business onwards. You can lessen the fee to 3 percent if you pay on or before the due date.
- O.S support is another additional fee that will cost you. P.O.S support is usually less than $160 per month per P.O.S system your business has.
- Other expenses you will probably make are the remedial expenses. This only applies if you broke any rules and regulations of the franchise agreement that cause harm to Jiffy Lube’s brand. The cost will depend on how much the Jiffy Lube company requires.
- Another additional fee is the cost of product testing. This only applies if you want to use a product that is not included in Jiffy Lube’s list of standard products to be used.
- If you franchised Jiffy Lube under a Product Supply Franchise Agreement, you will have to pay 1.5 percent of your gross sales for the National Advertising Fund.
The main reason that you franchised Jiffy Lube is to earn a good amount of money. However, the income you will make will vary on a lot of factors. Main factors such as the location of your business, its size, and much more. Seasons can also affect the income you will generate monthly.