Franchise Deep Dive: Snap-on Franchise Costs, Fees, Profit and Data

The mobile tool shop franchise offers entrepreneurs a unique opportunity to run their own businesses with a flexible model.

By 1851 Staff1851 Staff Contributions

8:08AM • 02/18/23

LAST UPDATED: January 5, 2023

FRANCHISE WEBSITE: https://www.snapon.com/EN/Franchise

NUMBER OF LOCATIONS: 4,700+

REPORTED COST TO GET IN: $175,146 – $411,941

REPORTED ROI: $55,000 annually

Snap-on is a mobile franchise that specializes in the sales of equipment and tools. Known as the #1 tool brand and backed by more than 100 years in business, Snap-on is a company with long-standing success that offers entrepreneurs a chance to run their own businesses. The awarded brand competes in the franchise space with concepts like Matco Tools and Cornwell Quality Tools.

How Many Snap-on Locations Are There?

Entrepreneur reports that as of 2022, there are 4,771 units of Snap-on in operation. There are currently 3,304 franchise units in the United States and 1,251 internationally. Additionally, Snap-on Incorporated has 216 company-owned locations. The number of franchise units has remained fairly steady in recent years, down slightly from a high of 4,858 in 2018.

Snap-on was founded in 1920 in Milwaukee, Wisconsin, primarily selling wrench sockets. There was a big boom in sales after World War II, and the company expanded to add routes to sell to mechanics on-site. The brand began franchising in 1990, becoming the first mobile tool company in the U.S. to do so.

After converting to franchising, Snap-on went on an aggressive growth campaign. The brand now has franchise models in Canada, Japan, Australia, Germany, Netherlands, South Africa, New Zealand, Belgium, and Ireland.

The company has undergone several acquisitions over the last decade; Snap-on Incorporated acquired Pro-Cut in 2014, Car-O-Liner Holding AB and Sturtevant Richmont in 2016, Norbar Torque Tools Holdings Limited in 2017, AutoCrib Inc. in 2020 and Dealer-FX Group in 2021.

What is the Snap-on Business Model?

Snap-on describes its franchise model as the opportunity to “own your own business, selling high-quality repair and diagnostic tools and equipment to a protected list of calls. The locations on your list of calls are not assigned to any other Snap-on Tools franchisee, so your route is your responsibility. You are in charge of your franchise, setting your own schedule and managing your customer relationships, and Snap-on offers you the resources and training you need to do your best work.”

Snap-on also offers Snap-on Credit for franchisees. This program helps cover funds for the initial investment and opening costs, making it easier to get their business up and running. This line of financing is also available to customers.

As a mobile franchise unit, the “territory” that owners operate in consists of a List of Calls, which is a collection of clients who buy tools that the brand has approved of. This list should have, at minimum, 200 potential “Core Customers” at the time of signing. Agreements are for a 10-year term length, with the possibility of a five-year renewal.

Through the agreement, owners operate a mobile store with the comprehensive support of the corporate team behind them. Each owner has a dedicated team comprised of a business manager, sales developer, franchise developer and diagnostic sales developer who are all committed to providing them with the tools they need to succeed.

Once new franchise owners sign an agreement, they will undergo Snap-on Franchise Store Management Training, which consists of 84 hours of classroom training and 135 hours of on-the-job training at the company facility in Grapevine, Texas. The franchisor also recommends that operators have their teams participate in regular Franchise Performance Team meetings, Franchise Development Training, kickoff meetings and the annual Snap-on Franchisee Conference.

How Much Can Snap-on Franchise Owners Make?

According to the most recently available Franchise Disclosure Document, Snap-on reported sales figures for 2019 for 2,951 of its franchisees – those who were in continuous, regular operations throughout the year.

The data shows that the median franchise sales for 2019 were approximately $550,000. The highest-earning franchise made over $2 million, and the lowest-earning franchise brought in under $150,000.

Based on the midpoint investment figure of $275,729 and an estimated profit margin of 15%, bringing a franchisee $82,500 in income per year, it would take the average owner about 5 years to recoup initial investment costs.

How Much Does it Cost to Open a Snap-on?

The estimated initial investment to begin operations of a Snap-on franchise is a range of $175,146 – $411,941. The itemized costs that factor into this range is broken down in the 2022 FDD, as reported by Franchise Direct.

The following costs are part of the upfront costs included in the initial investment:

Initial License Fee: $8,000 – $16,000
Initial Inventory: $114,500 – $125,000
Electronic Signature Pad: $0 – $200
Supplies: $0 – $400
Van: $45,000 – $155,000
Van Insurance (3 months): $688 – $2,063
Van Delivery Charge: $180 – $4,100
License: $200 – $2,400
Acquisition/Development of Revolving Accounts: $0 – $85,000
Other Equipment, Fixtures, Expenses: $150 – $170
Computer Software License Fee: $1,800
Additional Funds - 3 months: $12,419 – $19,808

Ongoing Costs and Fees include:

Weekly Remittance for Products and Services Purchased from Snap-on: 100% of miscellaneous charges less miscellaneous credits, plus any amount necessary to be $1 under the franchisee’s credit limit.
Monthly License Fee: $135
Computer Software Maintenance Fee: $80
Franchise Finance Program Loan Payment: No payment for the first 90 days, $1,495–$1,678/month after ($1,445 – $2,798/month for transfer franchise)
RA Loan Payment: $1,047 – $1,166/month ($0 – $1,166/month for transfer franchise)
Transfer Fee: $12,000.
Renewal Fee: 50% of the then-current initial license fee
Insurance and Other Coverage: $5,924 – $11,253
Van Lease and Maintenance Fee Payment: $2,322 – $2,722/month van lease payment plus $325/month maintenance fee
Training: $0 – $3,600

What is the Franchise Fee for Snap-on?

Snap-on is unique in the fact that it does not charge a franchise fee for new owners when they sign an agreement; instead, the company has a license fee. This amount ranges from $8,000 to $16,000 and is what allows the franchisee to operate a mobile tool business under the Snap-on name and with Snap-on branding and products.

Who is the Leadership of Snap-on?

What Helpful Articles Can I Read to Learn More About Snap-on?

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Franchise Deep Dive: Snap-on Franchise Costs, Fees, Profit and Data

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