Franchise Deep Dive: Ace Hardware Franchise Costs, Fees, Profit and Data

Known as “the place with the helpful hardware folks,” Ace Hardware has over 5,600 stores around the world that are mainly independently owned and operated by local entrepreneurs.

By Victoria CampisiStaff Writer

Updated 6:18PM • 01/18/23

LAST UPDATED: 1/2024

FRANCHISE WEBSITE: https://myace.com/

NUMBER OF LOCATIONS: 5,800+

REPORTED COST TO GET IN: $579,000 - $1,900,000+

REPORTED ROI (Item 19): $1,468,805 (median annual sales for convenience store format per 2021 FDD)

Ace Hardware was founded in Chicago in 1924. It is the largest retailer-owned hardware cooperative in the world, with over 5,600 locally owned and operated hardware stores in approximately 65 countries. Since its founding, the brand has become a part of local communities everywhere and is known as “the place with the helpful hardware folks.”

Headquartered in Oak Brook, Illinois, Ace Hardware and its subsidiaries operate an expansive network of distribution centers across the United States and have distribution capabilities in China and Mexico.

How Many Ace Hardware Locations Are There?

Ace Hardware operates more than 5,800 locally owned hardware stores in all 50 states and 60 countries, with global sales topping $22 billion. Stores come in a variety of sizes based on the needs of each individual neighborhood. The brand has small urban stores, large rural stores and everything in between.

In 2023, Ace Hardware opened over 100 new locations. Globally, the franchise has opened more than 1,100 stores in the past five years. The new store growth has been fueled by existing retailers opening additional locations, competitor stores converting to Ace and new investors opening their first Ace Hardware store. The brand says that interest in owning and operating a local Ace Hardware store continues to be at historically high levels.

To keep pace with the growth, the brand continues to invest in expanding its distribution network to house more inventory. Ace Hardware plans to add 4.4 million square feet of capacity to its distribution network by opening three new warehouses in the next five years. That’s in addition to the more than 2.5 million square feet it’s added in the past four years.

What Is the Business Model?

After the initial costs to buy in, Ace Hardware franchisees pay ongoing fees for the brand’s central services, but they do not pay an ongoing royalty fee. Everything put in goes toward the company they own.

Ace owners are expected to be actively involved in the running of their stores as shareholders and members of the cooperative. Although there is a lot of independence in this model, franchisees cannot run the business as absentee or semi-absentee owner.

Different formats include:

Convenience Hardware Format (stores with a retail selling space up to 6,000 square feet)
Core Hardware Format (stores with a retail selling space of 6,001 to 12,000 square feet)
Super Hardware Format (stores with a retail selling space of more than 12,001 square feet)
Home Center Format
Contractor-Oriented Supply Format

How Much Can Ace Hardware Franchise Owners Make?

Below are financial performance representations according to Ace Hardware's 2021 Item 19, as reported by Franchise Chatter . The financial performance representation presented in this Item 19 should not be considered as the actual, potential, or probable results that you will realize from the operation of your store.

Convenience Hardware Format

Number of Reporting Stores in Category: 129 (18.4% of total)
Median Annual Sales: $1,468,805
Average Annual Sales: $2,385,510
Highest Annual Sales: $29,496,525
Lowest Annual Sales: $122,811

Core Hardware Format

Number of Reporting Stores in Category: 354 stores (50.5% of total)
Median Annual Sales: $2,108,729
Average Annual Sales: $2,901,637
Highest Annual Sales: $35,142,881
Lowest Annual Sales: $97,365

Super Hardware Format

Number of Reporting Stores in Category: 160 (22.8% of total in sample)
Median Annual Sales: $3,491,082
Average Annual Sales: $4,750,102
Highest Annual Sales: $64,513,733
Lowest Annual Sales: $991,711

Home Center Format

Number of Reporting Stores in Category: 41 (5.8% of total in sample)
Median Annual Sales: $4,220,752
Average Annual Sales: $7,230,427
Highest Annual Sales: $45,228,960
Lowest Annual Sales: $795,719

Contractor-Oriented Supply Format

Number of Reporting Stores in Category: 17 (2.4% of total sample)
Median Annual Sales: $4,722,220
Average Annual Sales: $5,544,933
Highest Annual Sales: $14,423,423
Lowest Annual Sales: $1,390,583

How Much Does It Cost To Open an Ace Hardware?

In order to open an Ace Hardware store, franchisees must meet the minimum financial requirements of $250,000 of unencumbered cash and $400,000 net worth. Depending on the size of the store, total investment can range from $579,000 to over $1,900,000.

Investment costs for new businesses on a leased premises can include:

Initial Franchise Fee – Affiliation Fee: $5,000
Initial Franchise Fee – Capital Stock Subscription: $5,000
Advertising – Initial Brand Assessment: $6,000–$12,000
Exterior Signage: $5,000–$35,000
Interior Decor: $15,000–$32,000
Leased Improvements – Decorating, Furniture and Fixtures: $9 per square foot; $27,000–$135,000
Telephone, In-Store Communications and Other Equipment: $10,000–$20,000
Computer System with Point of Sale: $45,000–$85,000
First Three Months Rent: $3,000–$60,000
Prepaid Expenses: $3,000–$15,000
Opening Inventory: $150,000–$1,000,000
Initial Supplies: $500–$2,500
Insurance: $2,500–$30,000
New Investor Retail Training: up to $37,730
Additional Funds – Working Capital for First 90 Days: $15,000–$150,000

What Is the Franchise Fee for Ace Hardware?

New Ace Hardware franchisees can expect to pay a $5,000 franchise fee for the rights to open their own location.

Who Is the Leadership of Ace Hardware?

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