Take 5 Franchise in 2024: Costs, Fee & FDD
Looking to invest in a fast-growing franchise? Learn why Take 5 Oil Change, with its convenient drive-thru service and strong franchise support, stands out as a solid opportunity in the competitive automotive service industry.
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Take 5 Oil Change is an industry leader in the quick lube sector, known for providing a fast, hassle-free oil change experience. Founded in 1984 in Metairie, Louisiana, by a group of entrepreneurs focused on revolutionizing the traditional oil change experience, the company has built a strong reputation over the decades. The founders wanted to offer an automotive service that prioritized convenience and efficiency, which led to their iconic “stay in your car” model, a game changer in the industry. Today, Take 5 is synonymous with speed, efficiency, and customer satisfaction in vehicle maintenance.
At its core, Take 5 specializes in oil changes, but they also offer a range of other services like air filter replacement, wiper blade changes, and fluid top-offs. The “stay-in-your-car” approach caters to busy customers who want to minimize wait times while ensuring quality. Take 5’s primary market includes individuals and families with personal vehicles, fleet managers, and commercial businesses needing reliable, quick maintenance. They cater to a broad demographic, but the ease of use attracts time-conscious customers across suburban and urban areas.
Currently, Take 5 operates over 700 locations across the U.S., expanding rapidly into new regions. The franchise boasts millions of oil changes performed annually, with tens of thousands of customers visiting daily. While most of their locations are U.S.-based, their footprint is growing, making them one of the largest quick-lube chains in North America. The scalability of the business has been a key factor in its impressive expansion, and the brand continues to gain momentum in the automotive service industry.
Take 5 offers extensive franchisee support, starting with a comprehensive training program that covers both technical aspects and customer service. New franchisees are provided with tools to operate efficiently, including ongoing support in marketing, operations, and technology. Franchisees benefit from Take 5’s proven business model, which has been fine-tuned over decades, making it a great choice for both new and experienced investors. The company’s robust support system and turnkey operations ensure that franchisees have the tools they need to succeed from day one.
Take 5 Franchise Insights
- Take 5’s drive-thru oil change concept has revolutionized the industry by prioritizing convenience, allowing customers to stay in their car throughout the entire process.
- The franchise is built on simplicity, which means franchisees don’t need a background in automotive repair—everything from hiring to operations is designed to be easily managed.
- Take 5’s customer-first approach helps build long-term loyalty, with many customers returning for routine maintenance because of the fast, hassle-free experience.
- Take 5 has achieved a year-over-year unit growth rate of 44%, which stands out dramatically in an industry that has seen 0% growth, showcasing the franchise’s aggressive expansion and appeal to new franchisees.
- With a focus on friendly, approachable service, Take 5 is designed to appeal to a broad range of customers, including those who may feel intimidated by traditional repair shops.
Take 5 Franchise Key indicators
Unit Growth YOY (%)
44%
vs industry 0%
Total U.S. Franchised Units
325
3-Year Failure Rate
1%
vs industry 10%
Sales-to-Investment ratio
1.2:1
How much does it cost to open a Take 5 franchise?
Understanding the potential investment size and capital requirements is crucial when considering opening a Take 5 franchise. These financial commitments, including initial franchise fees, equipment costs, and ongoing operational expenses, impact the feasibility and profitability of the venture. Thoroughly evaluating these factors ensures that potential franchisees are prepared for the financial responsibilities and can make informed decisions about their ability to sustain and grow the business, ultimately contributing to long-term success.
Min & Max Investment
Opening a Take 5 franchise involves several key costs, which are outlined in Item 7 of the Franchise Disclosure Document (FDD). You can see a breakdown of the costs to open a Take 5 below from the most recent Item 7 below:
| Type of Expenditure | Minimum Investment | Maximum Investment |
|---|---|---|
| Initial Franchise Fee | $45,000 | $45,000 |
| Building Work | $230,398 | $689,709 |
| General Site Work | $161,278 | $517,282 |
| General Conditions and Fees | $69,119 | $344,854 |
| Due Diligence, Permits, Design, and Plans | $40,000 | $180,000 |
| FF&E Package | $30,997 | $39,388 |
| Software Installation Fee | $3,000 | $3,000 |
| Used Oil System | $7,000 | $15,000 |
| Signage | $25,000 | $45,000 |
| Opening Inventory | $23,000 | $35,000 |
| 3 Months' Rent and Security Deposit | $20,000 | $20,000 |
| Training Fees, Salaries, and Expenses During Training | $15,000 | $20,000 |
| Grand Opening Contribution | $20,000 | $20,000 |
| Insurance | $7,500 | $7,500 |
| Additional Funds (3 months) | $52,000 | $52,000 |
| Total Estimated Initial Investment | $749,292 | $2,033,733 |
Item 7 in the Franchise Disclosure Document (FDD) is the “Estimated Initial Investment” section. It outlines the total costs a franchisee can expect to incur when starting a franchise, including the initial franchise fee, equipment, inventory, real estate, and other startup expenses. This section is crucial because it provides potential franchisees with a detailed understanding of the financial commitment required, helping them assess affordability and plan their investment strategy effectively.
Required Capital
For Take 5 Oil Change, the required capital, liquid assets, and net worth align with general standards in the automotive service franchise industry. Based on available estimates and industry benchmarks:
- Initial Investment Take 5’s initial investment typically ranges from $749,000 to $2.03 million. This covers the franchise fee, equipment, construction, and other startup costs necessary to open a new location. Assuming that you will finance your franchise investment, you should plan to have 20% of the total investment amount in the form of equity (cash) for the investment.
- Liquid Assets Franchisees are generally expected to have liquid assets between $150,000 and $250,000 to cover operational expenses and maintain cash flow during the initial setup phase.
- Net Worth The recommended net worth for Take 5 franchisees is estimated to be around $500,000 to $1 million. This ensures the financial capability to manage both upfront and ongoing costs as the business grows.
How much does a Take 5 franchise owner make?
Calculating the salary of a Take 5 franchise owner involves analyzing gross sales to determine total revenue, assessing operational efficiency to understand profit margins, and accounting for franchisor fees and additional expenses such as rent, utilities, and payroll. Effective management of these factors can significantly impact the profitability and financial success of a Take 5 franchise owner. This comprehensive financial analysis helps estimate net profits, from which the owner’s salary can be derived. A clear understanding of these factors ensures accurate salary projections and financial planning for sustainable business operations.
Take 5 Revenue & Gross Sales
Based on the most recent analysis, Take 5 Oil Change franchises achieved a median gross sales of $1,395,000, demonstrating the brand’s strong financial performance and its ability to attract consistent customer demand. This impressive figure highlights the potential for significant revenue generation within the automotive service industry, making it an attractive opportunity for franchise investors.
Which key factors impact the average revenue performance of Take 5 franchisees?
The strong performance of U.S. franchisee median gross sales for Take 5 Oil Change this past year can likely be attributed to several key factors. First, the growing demand for convenient, fast automotive services has driven more customers to quick-lube providers, especially with many consumers looking to save time. The brand’s “stay-in-your-car” model has also become increasingly popular due to its efficiency and safety during the pandemic. Additionally, the expansion of Take 5 into new markets has likely contributed to higher overall sales, along with effective marketing campaigns and strong franchisee support. Improvements in operational efficiency and technology integration could have also boosted franchisee performance, ensuring a smooth and reliable customer experience.
Take 5 Franchise Operational Costs
Operational costs for a franchise like Take 5 Oil Change are the ongoing expenses required to run the day-to-day operations of the business. These costs are essential for maintaining the functionality of the service and ensuring efficient operations. For a Take 5 franchise, operational costs include:
- Oil and Filter Costs The primary expense comes from purchasing oil, filters, and other automotive fluids needed for the core oil change service and additional maintenance offerings.
- Labor Costs Wages, salaries, and benefits for technicians and service managers, including any overtime or bonuses for employees, are essential to keep the business running smoothly and efficiently.
- Rent or Mortgage Payments The cost of leasing or owning the property where the service center is located, including property taxes and insurance, is a major ongoing cost.
- Utilities Expenses for electricity, water, internet, and any other necessary utilities to keep the service center operational and comfortable for both staff and customers.
- Maintenance and Repairs Costs associated with maintaining the equipment used for oil changes and other services, as well as the upkeep of the building and any signage.
- Supplies and Inventory This includes essential items like wiper blades, air filters, coolant, and other ancillary products that are offered alongside oil changes.
- Insurance Coverage for various insurance policies, including general liability, worker’s compensation, property insurance, and potentially vehicle insurance for any service vehicles.
- Technology and Equipment Expenses for maintaining point-of-sale systems, service bay equipment, and any other technology or machinery used in operations.
- Miscellaneous Costs Other operational expenses such as licenses, permits, safety inspections, legal fees, and any costs related to customer satisfaction or promotions.
Carefully planning for these operational costs is vital for ensuring the profitability and success of your Take 5 franchise.
Take 5 Franchise Fees
Operational costs for a franchise like Take 5 Oil Change are the ongoing expenses necessary to manage the daily operations and ensure smooth business functionality. Here are some key operational fees to consider for Take 5:
- Royalty Fee 7% of Gross Sales, due each week on a specified Payment Day, typically Friday, based on the preceding week’s Gross Sales. This is a standard cost for using the franchise brand and system.
- Non-Recorded Payment Fee For each occurrence of unreported or missed sales reporting, there’s a fee of $1,500 or 120% of the last recorded Royalty Fee, whichever is greater. This fee emphasizes the importance of accurate and timely financial reporting.
- Additional Fees There might be other fees related to late payments, technology, or specific operational services, depending on the franchise agreement.
Planning for these ongoing fees is crucial for maintaining the financial health of your Take 5 franchise.
Take 5 Franchise Earnings
For Take 5 Oil Change franchisees, the potential earnings can be attractive, especially when considering the median gross sales of $1,395,000. This figure reflects the revenue generated by a typical franchise location and demonstrates the demand for fast and efficient oil change services. Franchisees with well-run operations and prime locations may see even higher sales, further increasing their earning potential.
For owner-operators, the earnings are equally compelling. Based on industry data, owner-operators can expect a median income of $167,000 annually based on industry profit margins. This figure represents the return for franchisees who actively manage their locations, taking on day-to-day operational responsibilities. It underscores the potential for solid financial returns, particularly for those who are hands-on in their business and can maintain efficient operations while minimizing costs.
How to Open a Take 5 Franchise
Becoming a Take 5 Oil Change franchisee involves several steps, beginning with the initial inquiry and ending with the launch of your franchise operations:
- Initial Inquiry You or your franchise specialist submits an initial inquiry basic information about your interest and background. You should also conduct thorough research on the franchise, including seeing all of the information available on the Vetted Biz franchise intelligence platform, including access to the most recent Franchise Disclosure Document (FDD).
- Franchise Application After the initial inquiry, you’ll complete a formal franchise application that includes your financial qualifications, business experience, and personal background. The franchisor reviews this to ensure you’re a good fit.
- Discovery Day You’ll then be invited to a Discovery Day, where you meet with the corporate team, visit franchise locations, and get a deeper understanding of the business model and culture.
- Franchise Agreement If both parties are satisfied, you’ll sign the franchise agreement, which formalizes your partnership with Take 5 and grants you the rights to operate a franchise.
- Securing Financing and Location Next, you’ll need to secure financing if needed and select a location for your franchise. Take 5 provides guidance on site selection, ensuring you choose a high-potential area.
- Training and Support Before opening, you’ll participate in an extensive training program that covers operations, customer service, and marketing strategies. The Take 5 team also provides ongoing support as you prepare to open.
- Construction and Setup During this phase, the construction and setup of your franchise location will take place. You’ll work with Take 5-approved vendors to ensure your store is up to brand standards.
- Grand Opening Once your location is ready, you’ll launch your business with a grand opening event, supported by Take 5’s marketing and operations teams to help drive initial customer traffic.
Following these steps, you’ll be well on your way to operating a successful Take 5 Oil Change franchise.
Pros & Cons
Pros
Proven Business Model: Take 5’s streamlined, no-appointment, drive-thru service is a highly efficient model, making it easy to manage and attract repeat customers.
High Growth Potential: The franchise has shown an impressive year-over-year unit growth rate of 44%, outperforming much of the automotive service industry.
Low Employee Count: With its simple service model, Take 5 typically requires fewer employees, which helps reduce labor costs and simplifies day-to-day management.
Customer Convenience Focus: The “stay-in-your-car” model is popular with customers, offering a competitive edge in the fast-paced, convenience-driven market.
Cons
Limited Service Variety: While the quick oil change model is efficient, it may not cater to customers looking for a broader range of automotive services, which could limit your market reach.
Dependence on Vehicle Traffic: Take 5’s success depends heavily on customer footfall from vehicle owners, and any downturn in local driving habits could affect business.
Highly Competitive Industry: The automotive service industry is crowded, with numerous players offering similar services, meaning you’ll need to differentiate yourself through marketing and service quality.
