INDUSTRY BENCHMARK · 27 SYSTEMS · FISCAL 2021–2026
Are automotive franchises a good investment?
Across 27 automotive franchise systems, the median system's exit rate in its latest fiscal year was 1.7%, and its opening rate 3.9%. Pooled across systems, with no system counting for more than 20% of the weight, the exit rate was 4.6%. Median franchise fee: $38K; median royalty: 6.0%; median total investment: $235K–$786K.
There is no official “automotive franchise failure rate.” What franchisors must disclose, in the Item 20 outlet tables of the FDD, is how many franchised outlets were terminated, not renewed, or “ceased operations — other reasons” each year. The exit rate here is that count divided by franchised outlets open at the start of a single fiscal year. It counts exits for any reason (some are retirements, sales, relocations or non-renewals) and misses struggling units that were sold as transfers.
1.7%
27 systems · latest fiscal year each
4.6%
raw totals: 302 exits / 6,905 at start
3.9%
470 outlets opened in total
27
FDD filed within 24 months
7,041
at latest fiscal year end
$38K
FDD Item 5
6.0%
FDD Item 6
$235K–$786K
FDD Item 7
16/27
systems disclosing an FPR
SOURCE: FDD ITEM 20 OUTLET TABLES FILED WITH STATE REGULATORS (MINNESOTA CARDS) · 27 SYSTEMS · 27 FILINGS · FISCAL 2021–2026
| Signal | Brand | Verdict |
|---|---|---|
| STRONGEST RECORD | Take 5 | Strong |
| STRONGEST RECORD | TOMMY'S EXPRESS | Strong |
| STRONGEST RECORD | JIFFY LUBE | Strong |
| WEAKEST FILED RECORD | CAR-X | Weaker |
| WEAKEST FILED RECORD | Tire Pros | Weaker |
| WEAKEST FILED RECORD | LINE-X | Weaker |
VERDICTS FROM EACH BRAND'S OWN FDD ITEM 20 FILING · METHODOLOGY
Automotive franchise questions, answered from the filings
How many automotive franchised outlets leave their systems each year?
There is no official failure rate. FDD Item 20 tables report how many franchised outlets were terminated, not renewed, or "ceased operations — other reasons" each year. Across 27 automotive systems, the median system's exit rate in its latest fiscal year (fiscal 2021–2026) was 1.7%; pooled across systems, with no system counting for more than 20% of the weight, it was 4.6%. Not every exit is a failure: some are retirements or sales.
How much does an automotive franchise cost?
Across the latest FDD filings of 27 automotive systems, the median initial franchise fee is $38K (Item 5) and the median total investment range is $235K–$786K (Item 7).
What royalty do automotive franchises charge?
The median ongoing royalty across 27 automotive franchise systems is 6.0% of gross sales, per Item 6 of their latest FDD filings.
Are automotive franchises growing or shrinking?
In each system's latest Item 20 fiscal year (fiscal 2021–2026), the median automotive system opened new franchised outlets at 3.9% of its starting base and lost 1.7% to exits. For the median system, openings outpaced exits.
What is the healthiest automotive franchise?
Of the automotive systems rated from their FDD Item 20 tables, Take 5 has the strongest record (verdict: Strong). A verdict describes the filed record, not a recommendation to buy.
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