Today we are covering the Jiffy Lube franchise. Is it a good investment? Any concerns buyers should be aware of?
So we have the brand new Disclosure Documents from Jiffy Lube Franchising so as of the making of this video these numbers are completely up to date. The total cost to open your own Jiffy Lube franchise is between $234,000 and $450,000, this number does not include your real estate costs and assumes you will be leasing a location. Your royalties will vary depending if you are on the Product Supply or Non Product Supply arrangement. So there are discounts if you agree to purchase your supplies exclusively through Jiffy Lube. Alternatively you can purchase oil, fluids and grease on your own, but your royalties will be higher.
You will pay 5% Royalty for Non Product supply and there is a 1% reduction if you pay on or before the due date. For product supply its reduced by 1%. There is a POS fee which will not exceed $160 a month, and a few other minimal fees. You will pay 1.5% national Ad fee for non product supply and another 5% for Cooperative advertising. Local Advertising will be another 5% or 4% if you signed the product supply agreement. So look at this closely because that is potentially 11.5% just for advertising, your royalties on top make it potentially 15-16% of your gross earnings every month
What kind of a location do you need for a Jiffy Lube franchise? A non Multicare location should have frontage of minimum 125 feet and a depth of 180 feet. Standard 3 bay building size is approximately 70 X 38 and including basement provides about 4,000 square feet
The new Multicare sites, and these are sites that provide additional car care services, are a bit bigger about 4400 square feet including basement. So if you have a piece of real estate and want to open a Jiffy Lube that’s what you will need.
Jiffy Lube Earnings:
So how much can you expect to earn with a Jiffy Lube Franchise? Well the Jiffy Lube Item 19 financials lists comparative annual sales of locations and provide a lot of information including average vehicle counts, brakes and services revenue, Multicare service revenue and more, but today let’s just look at the overall revenue. Again kudos to Jiffy Lube for a really informative item 19. The sales of locations are broken down into quartiles which for 2017 were as follows. The median revenue for the lowest ……quartile one was $455,084.49, for the second quartile $630,443.60, the third quartile was $817,694.42 and the top was 4TH which gives us a system wide average gross earnings of $714.001.49. Remember these are gross sales, that is not money in your pocket and all your expenses will come out of that. How is that by comparison with other Automotive franchise opportunities, it’s about in the middle – not the lowest and not the highest. But keep in mind there are many other considerations such as your your specific location demand, operational model and more that will dictate which franchise you should ultimately select.
Now if you follow the news you will know Jiffy Lube was caught on multiple occasions, often on prime time TV misleading and stealing from customers. These activities included telling customers their oil was low, when it wasn’t, misleading customers into thinking an “engine flush” was required maintenance when in fact it can and did destroy customers engines. This NBC4 reporter visited Jiffy Lube even after they had been exposed several times before and found that 7 of 11 locations still tried to sell services the car did not need and lied about work performed. There is no shortage of lawsuits either including this one Jiffy Lube settled for 47 million dollars for sending unauthorized texts and emails to customers.m Jiffy Lube has even made it to top 15 most hated companies lists.
So has Jiffy Lube turned things around? Is public perception changing? Is Jiffy Lube the best franchise to buy? As always we suggest people look at several franchise options to compare before they invest. If you need help finding and comparing franchises available in your area give the experts a call at Franchise city http://www.franchise.city
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