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Buying an Ace Hardware Franchise

Top 20 Most Popular Franchises: Ace Hardware

Vetted Biz is the leading platform for accessible and analytical data on franchises and businesses available in the U.S. Our research team has reviewed over 2,600 franchises and knows the key facts and data that signal a successful franchise system. Upon extensive review using a number of internet research tools, our team was able to compile a short list of the “Top 20 Most Popular Franchises in the United States.” In the article below, we review the business model proposed by one of these 20 franchises: Ace Hardware, as well as the requirements that encompass its franchise application process.

About Ace Hardware

            Ace Hardware began its story in 1924 when four hardware store owners joined together to buy merchandise in bulk in order to maximize their profits and consequently be able to compete effectively with larger stores. After years of initial success and a considerable expansion across the country, Ace Hardware began franchising in 1976. Today, Ace currently has more than 5,000 independently owned Ace Hardware stores operating across the globe that is known to generate nearly $16 billion in sales. Ace Hardware’s headquarters is, to this day, still located in Oak Brook, Illinois and is now run by its President and CEO: John Venhuizen, who has been an employee at Ace for more than 25 years.

Buying an Ace Hardware Franchise

            When investing in an Ace Hardware franchise, the first factor to consider are the financial requirements that accompany this endeavor. The total investment amount required to open an Ace Hardware franchise ranges from $286,000 to $2,110,230 including the company’s franchise fee of $5,000. Additionally, Ace is particularly looking for candidates who are passionate about local customers and who possess leadership and decision-making skills, as they will be required to run the store’s daily operations. A positive factor to keep in mind is that Ace franchisees are not required to pay any royalty or marketing fees to the corporate company – a benefit that is not offered by most franchises. That being said, due to the high investment amount required to open a store, the minimum net worth required to own an Ace Hardware franchise is $400,000 and the applicant must have liquid assets totaling at least $250,000.

Ace Hardware Stores Are Growing in Numbers

            When evaluating an Ace Hardware franchise’s potential for growth one does need to go beyond their internal numbers to better understand the prospect for success of the investment opportunity at hand. Ace Hardware currently operates 4,700 U.S.-based stores and more than 540 international stores. Additionally, the sum of revenue from Ace Hardware’s cooperative member stores and company-owned retail stores increased at an annualized rate of 6.5% to $8.5 billion over the past five years. By 2018, due to this continuous success, the company’s operating income reached $272.2 million. Looking at Ace’s franchise program performance, although limited data was made available on the financial status of the company’s franchisees, it was found that from 2015 to 2017 Ace had a yearly increase of 50+ franchises to its system, indicating a strong franchise system that continues to attract new applicants. Moving forward, Ace is looking for candidates willing to open Ace Hardware franchises in the territory of their choice so that it can maintain and up its rank status on Entrepreneur’s Franchise 500 list, which was n˚13 in 2019.

Summary

            Investing in an Ace Hardware franchise is an interesting opportunity, especially for individuals looking to make their way into the retail industry. The prospects for growth and success within the industry and the Ace Hardware brand itself are extensive, and a number of markets continue to be available as Ace does not award previously delimited territories to any of their franchisees. If you are an individual passionate about your community and willing to invest in an amount ranging from $286,000 to $2,110,230, Ace Hardware is the right franchise for you!