Submit
Feedback

Take 5 Franchise Payback Period Is Long in 2024

Written by: Patrick Findaro
Last Updated by Ailen Faiad: May 14, 2024
Download our Exclusive Automotive Franchise Free Guide
Download Now

This article is based on the video featured above, originally recorded for Vetted Biz Youtube Channel.

This article is based on its 2022 FDD

Take 5 franchise is an American oil change company that has 674 locations, as of 2022, in 25 U.S. states and three in British Columbia, Canada. The company is owned by Driven Brands Company, which is also the parent company of other well-known car care companies such as Maaco and Meineke.

Contents

Follow the podcast

Apple Podcast    Spotify    Google Podcast

How Is Take 5 Franchise Positioned in the Automotive Industry?

The U.S. has one of the largest car industries in the world. Auto manufacturing deeply depends on thousands of suppliers, materials, retail, and vehicle maintenance. It is an industry that delivers economic benefits and creates jobs in many different sectors in all 50 states. The Auto industry supports a total of 9.9 million American jobs, about 5.1% of private-sector employment. In addition, it is an industry that provides great global trade benefits: In 2017, $99 billion in exports of cars and parts were shipped from U.S. ports.

The U.S. Automotive industry accounts for 2.7% of the gross domestic product (GDP), or $545.4 billion. Of that, $327 billion was auto manufacturing and $218 billion was vehicle retail sales.

Take 5 Franchise

How Much Is a Take 5 Franchise?

The initial Take 5 Franchise Fee is $35,000. You have to pay this upfront fee when opening a Take 5 franchise.

Take 5 Franchise Cost

The estimated total investment necessary to begin the operation of a Take 5 Franchise ranges from $734,497 – $1,307,888. The following costs are part of the upfront costs included in the initial investment for a Take 5. Many of these are one-time fees that are needed to launch the franchise. Review the chart below to see how much it costs to buy a Take 5 franchise in 2022 .

Type of expediture Amount To Whom Payment Is To Be Made
Initial franchise fee $35,000 Us
Building costs
Building work $250,000 – $400,000 Contractors
General site work $108,000 – $375,000  Contractors
General conditions and fees $103,000 – $166,000  Contractors
Due diligence, permits, design and plans $35,000 – $80,000  Contractors
FF&E Package $30,997 – $39,388 Us, Spire Supply and/or another affiliate
Software Installation Fee $3,000 Us or affiliate
Used oil system $7,000 – $15,000 Supplier
Signage $25,000 – $40,000 Sign company
Total estimated building costs  (excluding real estate) $561,997 – $1,118,388
Other costs and expenses
Opening Inventory $23,000 – $35,000 Us, Spire Supply, and/or another affiliate
3 month’s rent and security deposit $20,000 Us or landlord
Training fees, salaries and expenses during training $15,000 – $20,000 Employees, third parties and us
Grand opening advertising and marketing $20,000 Us
Insurance $7,500 Insurance broker
Total estimated non-building costs (excluding real estate) $85,500 – $102,500
Additional funds- 3 months $52,000 Employees, suppliers, and other third parties
TOTAL (excluding real estate costs) $734,497 – $1,307,888

Take 5 Franchise

Take 5 Franchise Requirements

The following are Take 5’s requirements from their franchise website:

  • Have a net worth of $1.5M+.
  • Be an experienced business owner or a Franchise Owner of another brand who is looking to diversify, build wealth, and be first to market.
  • Have management experience and a mentorship mentality.
  • Have strong operations experience.

Owning a Take 5 Franchise Requires Ongoing Fees

Royalty: 7% of Gross Sales

Marketing Fee: 5% of Gross Sales

How Much Do Take 5 franchise Owners Make?

Bottom 50% Top 50% All Centers
Lowest Gross Sales $411,087 $1,038,101 $411,087
Highest Gross Sales $1,024,116 $2,552,419 $2,552,419
Median Gross Sales $833,877 $1,327,311 $1,031,108
#Met Exceeded Average 44 25 63
%Met Exceeded Average 54% 30% 38%

franchise specialist

2021 Take 5 Median Franchise Sales: $1,031,108

Initial investment (midpoint) %Profit margin of median franchise sales Estimated Profits Time to recoup investments
$1,021,192 10% $103,110 11.5 years
15% $154,666 9 years
20% $206,221 6.5 years

Based on the median sales provided by Take 5’s franchise locations, at an average of a 15% profit margin:

It will take around 9 years to recoup your investment. This is longer than other franchise opportunities. You may not get a 15% profit margin, which would elongate getting a return on your investment.

Many factors affect the sales, costs, and expenses of your Franchised Store, such as the Franchised Store’s size, geographic location, menu mix, and competition in the marketplace; the presence of other Automotive stores; and the extent of market penetration and brand awareness that Take 5 stores have attained in your market. Also, the quality of management and service at your Franchised Store are major factors.

Is the Take 5 Franchise Profit Worth the Franchise Cost?

To assign a valuation multiple for Take 5 franchises, we leverage estimates from DealStats, a database of acquired private company transactions sourced from U.S. business brokers and SEC filings. We reviewed the larger franchise industry as well as selling price multiples for larger systems where more transaction data is available.

Under $5 Million Net Sales

  • Estimated Selling Price = Net Sales * 0.58

When you go to sell a Take 5 franchise based on the median multiple of .58 and net sales in 2021 of $1,031,108, it would sell for $598,042. This is significantly lower than the midpoint investment of $1,021,192.

The more franchises you own, the more earning potential you have as private equity firms become interested in your business instead of individual owner-operators

Driven Systems (Franchisor) Income Statement Key Insights

For the years ended
December 25, 2021 December 26, 2020
Revenue:
Franchise fee revenue $173,404 $134,239
Other revenue $35,360 $23,276
Total revenue $208,764 $157,515
Costs and expenses:
Operating expenses $66,909 $62,024
Amortization $8,925 $9,206
Total costs and expenses $75,384 $71,230
Net income $132,930 $86,285

Take 5 is a profitable business for the franchisor with retained earnings of $132,930 in 2021. Compared to $86,285 million in 2020, they saw an increase of almost 175% from 2020 to 2021. This is a good indication of high growth as a company overall

Take 5 Franchise

How Many Take 5 Units Have Opened and Closed?

Outlet type Year Outlets at the Start of the Year Outlets at the End of the Year Net Change
Franchised 2019 7 30 +23
2020 30 64 +34
2021 64 134 +70
Company-Owned 2019 336 447 +111
2020 447 483 +36
2021 483 536 +53
Total Outlets 2019 343 477 +134
2020 477 547 +70
2021 547 670 +123

Over the last three years, the company has been rapidly expanding albeit with a long payback period for franchisees. Both franchising units and company-operated stores have increased. Over the last three years, franchises have opened at a rate of 42 units a year.

Conclusion

Take 5 offers people the opportunity to be a part of a competitive industry where they can seek to differentiate themselves. While this may be the business for you, make sure also to check out other companies offered on Vetted Biz and in the Automotive industry.

Change Subscription

Vetted Member - $80/mo

Checkout

Vetted Member (Yearly) - $64/mo

Checkout

Your Suscription has expired!

Looks like your subscription is due. Please renew to keep using our services.

Share link

Or

Downgrade subscription

You are going to downgrade your subscription.This action will proceed the difference in cost of plans and reset subscription period after moneyback.

Vetted Member $79/month

Simple Start Free

Upgrade subscription

You are going to upgrade your subscription.This action will proceed the difference in cost of plans and reset subscription period after moneyback.

Simple Start Free

Vetted Member $79/month

Cancel subscription

You’re about to cancel your subscription. Please confirm by clicking on the “Cancel Subscription” button below.

 

Plan Updated

Your current subscription plan is:

Vetted Member $79/month

Support Form

Please fill out the form below with any technical issues, questions or feedback you might have.

Sorry. You must be logged in to view this form.

close
close

Franchise Specialist Request

close

Franchise Form - Automotive

Name(Required)
Untitled