Published on 5 Jan 2023 Time 6 min read Last update by 28 Nov 2023

What is the MAC Tools Franchise Cost in 2023?

mac tools
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

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.)

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.

 

mac tools

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.

 

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