Table Of Contents
The car repair industry is a booming place for businesses these days. The new tech-driven auto repair companies have to compete with the low prices of mechanics at gas stations. They have to appeal to drivers who understand the importance of spending on auto repair and maintenance.
The average American vehicle age is 12.1 years, and there are around 288 million vehicles on U.S. roads. Seeking professional help for these vehicles becomes imperative. Midas performs service and maintenance for these vehicles. It sells and installs motor vehicles’ brake parts, exhaust systems, suspension parts, tires, heating, cooling systems, batteries, and other vehicle parts. Midas also operates a SpeeDee oil change business with around 100 auto service stores in the U.S. and Mexico.
Each industry has its advantages and disadvantages. We can’t generalize this. If you have a keen eye for finding opportunities in an emerging sector, you can do well with fast-casual restaurants too. But it depends on your capacity to spot them.
Our spotted hidden gems are promising and have already made their presence felt In the US!!
Hey, I’m Dan Rowe. At Fransmart, we help entrepreneurs become franchisees by providing world-class support at every step of the process. We’ve been in your shoes before — we’re experts on everything from finding a great franchise to financing to opening day. If you have any questions about buying a franchise, leave a message here, and we’ll get back to you as soon as possible!
Midas International Corporation: Overview
With over 1000 stores in America and more than 2000 stores worldwide, Midas offers total car care to its customers. Midas started its operations in Macon, Georgia, with a slogan “for as long as you own your car.” Since 1956 the year it was established, Midas has grown to be a world leader in car repair and an integral part of America’s car culture. The Midas brand is owned by TBC Corporation, which purchased the franchise system in 2012.
Midas has come a long way from selling the only lifetime-guaranteed mufflers to being a global player in the auto repair market. Their marketing strategy is similar to another award-winning brand Taffer’s Tavern and has been able to pull them to huge demand in the USA.
Investing in Midas Franchise might initially sound like a safe bet, but in reality, it can be erratic for many new budding entrepreneurs.
Before you jump into the technical world of car repair, remember there are a lot of issues behind this big name. The biggest problem is that you have to spend a lot more to start a Midas franchise, and you’ll probably be bogged down with heavy fees and royalties, which will make it much harder to have decent ROI.
Compared with competitor brands like Norauto, Yazaki, Firestone Complete Auto Care, and Akebono Brake Corporation, Midas recently faces a downside run where goodwill or name is concerned. They’re known for overcharging their customers and for having strict contracts with franchise owners. Midas franchisees are experiencing high turnover rates and unhappy franchisees who feel limited in the creative solutions they can offer to customers.
Midas Franchise Fees and Requirements:
- Franchise Fee – up to $30,000,
- Initial Investment: $181,650 – $459,587
- Net-worth Requirement: $250,000
- Liquid Cash Requirement: $75,000
- In addition, Midas charges 10% royalty fees from its franchisees.
- Midas also has the following personnel requirements from its franchise:
- On-The-Job Training: 100 – 120 hours
- Classroom Training: 40 – 72 hours
- Additional Training: In-shop assignment
- Number of Employees Required to Run: 9
Problems with Midas Auto Repair Franchise:
As long as cars are a mode of transport, car repair will be a people’s need. Auto repair is the most lucrative market today, but is it worthwhile to take a car repair franchise?
We have researched through different forums of Midas Franchisee complaints, company financial status, analyzed feedbacks taken from various industry insiders to tell you the bitter truth behind a big name Midas is. Some of the pitfalls of the Midas franchise identified by Fransmart after thorough research are:
#1 High Royalty Fee:
Midas charge a whopping 10% royalty fee from its franchisees. In addition, there are many hidden charges that franchisees must pay to the company. It leaves little take-home profit for a franchise owner.
#2 Franchise Reputation affecting one another:
Franchising is a communal business. One franchise’s good reputation will reflect on all of them and vice versa. The auto repair industry is more vulnerable to bad publicity than most, given the potentially high costs of poor repairs. Many Midas franchisees faced a lot of infamy after receiving many complaints about overcharging and falsely charging their customers. So if you are willing to step into such a sensitive industry, you should be aware of the shortfalls as franchisees.
#3 Restriction in doing business:
Midas franchise has to follow the stringent company regulations for the auto servicing requirement standardized by the company. For instance, a franchise owner can use only the specified items in their shop, even if it does not give the best solution to the problem at hand. These restrictions in doing business affect the creativity and potential of a unit to a large extent. It may also drive away from the franchisee’s business to unbranded smaller repair units.
#4 Complex Contract Agreement:
The Midas Corporation has a franchise agreement, but it is quite complex and should be read carefully. You need the help of a lawyer to understand. The contract agreement is for a fixed number of years. The contract may be renewed, but it does pose some risks for the franchisees. That’s why it’s essential to go over the document many times before you sign on the dotted line. You won’t be getting any help from Midas to understand it.
Conclusion:
Franchise investment is a good business opportunity, and many times you make a lot of money in this business, but things can take a turn for the worse. For example, if you have a lot of work to do on warranties, then you’ll have less money to spend. Make sure to have enough funds before agreeing to anything with the Midas Corporation.
Midas takes a portion of your earnings. This income deduction can total as much as 50% of your profit for a specific job. It might sound like a lot of sharing of profit, well this is true too. Midas Franchise can be an expensive agreement. You need to have deep pockets if you want to partner with Midas Corporation.
While the amount of money you can earn as a franchise owner depends on various factors, there are some general benchmarks stated in FDD item 19 for every business. But are these realistic income projections? How much do franchise owners make?
The video below will show you how to calculate your return on investment (ROI) in 10 years for any franchise investment. It will also show you how much money you can expect as a business owner before taxes.
Midas Franchise can be an expensive agreement. You need to have deep pockets if you want to partner with Midas Corporation.
Sources:
- https://www.franchise.org/franchise-opportunities/midas-international-corporation
- https://www.franchisedirect.com/automotivefranchises/midas-franchise-07037/ufoc/
- https://www.entrepreneur.com/franchises/midas/284282
- https://www.thehulltruth.com/dockside-chat/738376-midas-franchise-2.html
- https://epodcastnetwork.com/auto-repair-franchise-the-pros-and-cons-of-the-business/