Franchise Deep Dive: Matco Tools Franchise Costs, Fees, Profit and Data

The tool distribution and servicing concept boasts just an $8,000 franchise fee and zero royalties, but there are restrictions to franchisees’ growth with the brand.

By Morgan Wood1851 Franchise Contributor

8:08AM • 04/27/23

LAST UPDATED: March 2023

FRANCHISE WEBSITE: https://www.matcotools.com/franchise

NUMBER OF LOCATIONS: 1,919

REPORTED COST TO GET IN: $76,819–$309,133

REPORTED ROI (Item 19): $476,328

Matco Tools is an automotive tools sales concept. Franchise owners are assigned exclusive routes with over 300 prospective clients. As they sell auto tools to a base of mechanics and technicians, franchise owners build a customer base that they can continue to work with on a tool-servicing or new-sales basis.

Among the long list of tools Matco Tools owners offer are toolboxes, ratchets and sockets, wrenches, pliers and power tools. With over 314 million registered vehicles and nearly 900,000 qualified auto technicians between the U.S. and Canada, the need for auto service tools is ever-persistent.

How Many Matco Tools Locations Are There?

According to Entrepreneur, there are 1,919 Matco Tools locations. The brand’s unit count has been steadily climbing since 2020, and it has been following a generally positive trajectory for the past decade.

Because the concept has restrictions on the total number of stores a single owner can acquire, its growth may be slowed compared to concepts that allow franchisees to invest in dozens of units. However, its willingness to impose these restrictions likely supports the integrity of the brand. Though growth may not be exponential, it is steady and healthy. The industry lends itself to continuing increases in demand, which will serve the concept well in the future.

What Is the Matco Tools Business Model?

The Matco Tools business model leverages the consistent demand for auto maintenance in the U.S. and Canada. Owners are assigned a route with over 300 prospective customers, and they sell, deliver and service tools to their auto mechanic clients.

The brand also offers multiple ownership structures, depending on the franchisee’s ambitions. As an owner-operator, franchisees can own between one and three Matco stores. In this space, the owner is responsible for the entire business, including day-to-day operations and client servicing.

Owners can invest in up to five stores. At the four- and five-store marks, the franchisee becomes a full-time owner-investor. At this level, owners have often acquired enough employees and exclusive territory so that they can afford to step beyond daily operations to focus on acquiring even more customers and continue to build the brand. Rather than working in their businesses, Matco owner-investors work primarily on their businesses.

How Much Can Matco Tools Franchise Owners Make?

Matco Tools publishes its total annual revenue representations by dividing the entire franchise network into thirds. In 2021, the bottom third of franchisees averaged $285,102 in total revenue. The middle third averaged $449,242, and the top third averaged $694,641.

The highest earner in 2021 drew in $1,920,299 in revenue.

Matco Tools’ website emphasizes that there are many factors that can impact how much revenue and profit an owner secures, including how much time is dedicated to the business, the owner’s money management skills and local tax requirements. Owners also must consider the cost of doing business in profit or salary calculations.

Notably, though, the brand advertises itself as a zero-royalty concept, saying, “Matco Distributors are able to keep what they earn.”

How Much Does It Cost To Open a Matco Tools?

The total estimated cost to open a Matco Tools business is $76,819–$309,133. This sum is broken down into the following categories:

Initial Franchise Fee: $8,000
Initial Inventory: $50,000–$84,000
Acquisition and Establishment of Time Payment Reserve OR Time Payment Line of Credit: $22,000 OR $4,700–$9,325
Mobile Store Lease: $2,784–$160,000
Computer Hardware: $2,700–$3,400
Computer Software and Internet Service—Three Months: $2,050–$2,825
Three Months of Insurance Premiums: $620–$3,573
Travel, Lodging and Meals For Training: $170–$2,515
Professional Services: $295–$5,320
Fixtures, Supplies and Licenses: $500–$4,000
Three Months of Additional Funds: $5,000–$13,500

The Matco Tools website also states that, for qualifying candidates, the franchisor can finance up to $89,000 of initial inventory, part or all of the Time Payment Reserve and up to $30,000 to cover other startup-related costs.

What Is the Franchise Fee for Matco Tools?

The franchise fee for Matco Tools is $8,000.

Who Is the Leadership of Matco Tools?

What Helpful Articles Can I Read To Learn More?

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Franchise Deep Dive: Matco Tools Franchise Costs, Fees, Profit and Data

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