What is the MAC Tools Franchise Cost in 2024?
This article is based on its 2022 FDD.
Mac Tools franchise (previously, Mechanics Tool and Forge Company) is an American company that distributes and markets professional tools and related equipment. It is headquartered in Westerville, Ohio, United States. The Mac Tools line consists of over 8,000 professional tools, including screwdrivers, ratchets, wrenches, and assorted air tools.
How Much is a MAC Tools Franchise?
The initial MAC Tools Franchise Fee is $8,000. You have to pay this upfront fee when opening a MAC Tools franchise.
MAC Tools Franchise Cost
The estimated total investment necessary to begin the operation of a MAC Tools Franchise ranges from $120,500 to $340,535. The following costs are part of the upfront costs included in the initial investment for a MAC Tools location. Many of these are one-time fees that you need to pay to launch the franchise. Review the chart below to see how much it costs to buy a MAC Tools franchise in 2022.
| Type of expediture | Amount | To Whom Payment is to be Made |
|---|---|---|
| Initial franchise fee | $8,000 | Mac Tools |
| Annual Fee | $1,200 | Mac Tools |
| Travel and Living Expenses While Training | $2,025 to $4,050 | Airlines, hotels and restaurants |
| Starter Inventory | $70,000 to $75,000 | Mac Tools |
| Truck Lease or Purchase | $13,800 to $180,000 | Truck Suppliers |
| Truck Painting and Decal Application | $0 to $10,550 | Various suppliers |
| Tool Displays | $35 to $1,500 | Mac Tools and other suppliers |
| Payment processing services | $0 to $500 | Approved suppliers |
| Professional fees | $850 to $1,800 | Your professional advisors |
| Insurance | $750 to $1,985 | Insurance company |
| Uniforms | $250 | Approved suppliers |
| Computer System | $3,000 to $3,800 | Mac Tools or other designated supplier |
| Opening Advertising and Business Cards | $50 to $250 | Various suppliers |
| Licenses, Permits and Authorizations | $50 to $250 | Government agencies |
| Mac Tools Software License Fee | $240 to $900 recurring monthly fee; and $250 to $500 initial license fee | Mac Tools |
| Additional funds – 3 to 6 months | $20,000 to $50,000 | Various suppliers, employees and others |
| TOTAL | $120,500 to $340,535 |
Ongoing Fees
Annual Fee: $1,200
On-going Inventory Purchases: Variable, depending upon sales by franchisee Payable weekly Total price of product, less 2% if paid in full within 10 days or full price if paid within 30 days.
Credit Program – Management Fees: 9% of the amount of each purchase by your customer on a Credit Program account. (4% of this amount is paid to Mac Tools.)
How much do MAC Tools franchise owners make?
2021 MAC Tools Median Franchise Sales: $440,474
| Initial investment (midpoint) | %Profit margin of median franchise sales | Estimated Profits | Time to recoup investments |
|---|---|---|---|
| $230,517 | 10% | $44,047 | 7 years |
| 15% | $66,071 | 6 years | |
| 20% | $88,094 | 5 years |
Based on the median sales provided by MAC Tools’s franchise locations, at an average of a 15% profit margin it will take around 6 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 Hardware stores; the extent of market penetration and brand awareness that MAC Tools stores have attained in your market. Also, the quality of management and service at your Franchised Store are major factors.
Is the MAC Tools Franchise Profit Worth the Franchise Cost?
To assign a valuation multiple for MAC Tools 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 MAC Tools franchise based on the median multiple of .58 and net sales averaging in 2021 of $440,474, it would sell for $255,474. This is slightly more than the midpoint investment of $230,517 but still worthwhile.
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.
Stanley Black and Decker (Franchisor) Income Statement Key Insights:
Consolidated Statements of Operations
| Years ended January 1, 2022, January 2, 2021, and December 28, 2019 | |||
|---|---|---|---|
| 2021 | 2020 | 2019 | |
| Net Sales | $15,671.2 | $13,057.7 | $12,912.9 |
| Costs and Expenses | |||
| Cost of sales | $10,423 | $8,652.3 | $8,679.5 |
| Selling, general and administrative | $3,236.5 | $2,599.5 | $2,542 |
| Provision for credit losses | $3.9 | $29.0 | $26.3 |
| Other, net | $190.1 | $217.8 | $201.1 |
| Loss (gain) on sales of businesses | $0.6 | $13.5 | $(17.0) |
| Restructuring charges | $14.5 | $73.8 | $138.4 |
| Gain on equirt method investment | (68.0) | $ | $ |
| Loss on debt extinguishments | 46.9 | 17.9 | |
| Interest income | $9.8 | $(17.5) | $(51.9) |
| Interest expense | $185.4 | $222.6 | $282.2 |
| $13,976.2 | $11,837.9 | $11,818.5 | |
| Earning from continuing operations before income taxes and equity interest | $1,641.0 | $1,219.8 | $1,094.4 |
| Income taxes on continuing operations | $61.4 | $43.0 | $126.8 |
| Net earnings from continuing operations before equity interest | $1,579.6 | $1,176.8 | $967.6 |
| Share of net earnings (losses) of equity method investment | 19.0 | 9.1 | (11.2) |
| Net earnings from continuing operations | $1,598.6 | $1,185.9 | $956.4 |
| Less: Net (losses) earning attributable to non-controlling interests | $(1.7) | $0.9 | $2.2 |
| Net earnings from continuing operations attributable to Stanley Black & Decker, Inc | $1,600.3 | $1,185.0 | $954.2 |
| Add: Contract adjustment payments accretion | $1.3 | $1.7 | $1.7 |
| Net earnings from continuing operations attributable to common shareowners – Diluted | $1,587.4 | $1,162.6 | $954.1 |
| Earnings from discontinued operations before income taxes | $70.2 | $47.2 | $35.6 |
| Income taxes on discontinued operations | $(18.7) | $(1.6) | $34.0 |
| Net earnings from discontinued operations | $88.9 | $48.8 | $1.6 |
| Net earnings attributable to common shareowners – Diluted | $1,676.3 | $1,211.4 | $955.7 |
| Net earnings attributable to stanley black & decker | $1,689.2 | $1,233.8 | $955.8 |
| Basic earnings per share of common stock | |||
| Continuing operations | $9.99 | $7.53 | $6.42 |
| Discontinued operations | $0.56 | $0.32 | $0.01 |
| Total basic earnings per share of common stock | $10.55 | $7.85 | $6.43 |
| Diluted earnings per share of common stock | |||
| Continuing operations | $9.62 | $7.16 | $6.10 |
| Discontinued operations | $0.54 | $0.30 | $0.01 |
| Total diluted earnings per share of common stock | $10.16 | $7.46 | $6.11 |
| Net earnings from continuing operations attributable to common shareowners | $1,586.1 | $1,160.9 | $952.4 |
| Net earnings from discontinued operations | $88.9 | $48.8 | $1.6 |
| $1,675.0 | $1,209.7 | $954.0 | |
| Other comprehensive (loss) income | |||
| Currency translation adjustment and other | $(307.7) | $281.9 | $(36.0) |
| Gains (losses) on cash flows hedges, net of tax | $53.2 | $(48.8) | $(27.4) |
| Losses (gains) on net investment hedges, net of tax | $123.6 | $(37.7) | $(40.9) |
| Pension gains (losses). net of tax | $123.6 | $37.7 | $40.9 |
| Other comprehensive (loss) income | $(131.9) | $170.9 | $70.3 |
| Comprehensive income attributable to common shareowners | $1,543.1 | $1,380.6 | $883.7 |
MAC Tools is a very profitable business for the franchisor with retained earnings of $1,543 million in 2021. Compared to $883 million in 2020, they saw an increase of almost 100% from 2019 to 2021. This is a good indication of high growth as a company overall.
How many MAC Tools 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 | 695 | 687 | -8 |
| 2020 | 687 | 703 | +16 | |
| 2021 | 703 | 751 | +48 | |
| Company-Owned | 2019 | 2 | 1 | -1 |
| 2020 | 1 | 1 | 0 | |
| 2021 | 1 | 0 | -1 | |
| Total Outlets | 2019 | 697 | 688 | -9 |
| 2020 | 6888 | 704 | +16 | |
| 2021 | 704 | 751 | +47 |
Over the last three years, the company has been expanding. Over the last three years, franchises have opened at a rate of 19 units a year. This is an indicator that these stores are performing very well.
Conclusion
MAC Tools offers people the opportunity to be a part of a business that has some major players in it but the potential for profit is clearly present.
While this may be the business for you, make sure also to check out other companies offered on Vetted Biz and in the Hardware Industry.
