There is no way to say this politely: 2020 rocked the automotive franchise industry. However, current information suggests that the auto repair and maintenance industry can expect a strong recovery in 2021 and is unlikely to slack for many reasons including:
- In 2019, more than 33 million vehicles in the United States were older than 14 years old, requiring regular maintenance and servicing due to their age.[1]
- By 2023 the size of the auto care industry is projected to reach $448.9 billion, up from an estimated $380 billion in 2020.
- Most vehicle owners prefer to visit local auto franchises, rather than dealer shops, to have work performed on their vehicle since this option is typically the most economical.[2]
- Repair and maintenance work is becoming increasingly complex due to onboard computers and intricate systems, and most people must rely on trained professionals to perform this work on their vehicles.
- Commercial vehicles, such as medium- or heavy-duty trucks, have seen an expansion in sales since 2018 while the passenger vehicle sales have declined. The preference for pick-up trucks that can transport passengers and cargo is the reason for this growth. Since trucks tend to cover more miles than regular passenger vehicles, they require more frequent servicing.[3]
- The part and component maintenance and replacement cycle for commercial vehicles is also more frequent because of the high distances traveled in a relatively short period of time.[4]
- Many commercial vehicles run on diesel as opposed to petrol. Diesel filters must be replaced at regular intervals, driving demand for maintenance of commercial vehicles until at least 2026.[5]
Below is a list of major auto franchises where we expect to see significant rebound in revenues in the coming year.
- Big O Tires - Consistently a top performer in automotive repair
- Tuffy Tire & Auto Service Centers - Established in 1970 with strong representation in the Midwest and some Southern states
- Midas - Founded in 1956, received top listing in their category in Entrepreneur’s Franchise 500 rankings
- Meineke - Uses cutting edge Meineke eInspection technology, an iPad-based tool that keeps a digital audit of each vehicle, services performed, and recommended service to provide transparency for customers
- Jiffy Lube - Consistently performing quick lube brand that provides a 12-week on-boarding process for all new franchisees
- AAMCO Transmissions - Specializes in transmission repair with a new emphasis on hybrid and EV repair
- Grease Monkey - Quick lube founded in 1978 and looking to open 30+ new locations in 2021
- CARSTAR - Collision repair leader that features a proprietary operational platform, EDGE, helping franchise owners measure business performance against industry Key Performance Indicators (KPIs)
- Mighty Auto Parts - A supplier to the auto service industry, offering a direct sourcing model for preventive maintenance, common use auto parts, shop supplies, oil, chemicals, and lubricants for vehicles
- Tint World - Premier auto styling and window tinting franchisor with experts in real estate, construction, training, purchasing, distribution, marketing, and operations
- Mr. Transmission - Specializes in the repair and installation of transmission systems and drive train components with over 60 years of experience
- Valvoline Instant Oil Change - Quick lube serving approximately 9 million customers nationwide
- 1-800-Radiator - Franchisees have on average 1,000 automotive businesses as their primary customers, including parts stores, repair shops, body/collision shops, new and used car dealers, junk yards, and radiator repair shops
- Christian Brothers Automotive - Offering collision repair services with an extra emphasis on customer service
- Ziebart - Auto detailing and styling franchisor that offers a military discount to all US military veterans, waiving 100% of the initial franchise fee
- SpeeDee Oil Change & Auto Service - Quick lube franchisor with comprehensive business planning assistance and on-going technical and marketing support to drive sales
- Fleet Clean - Commercial truck-washing service with proprietary washing method that ensures top-quality outcome while rapidly servicing customers
- Precision Tune Auto Care - Top-rated Entrepreneur Franchise 500 company with a full range of services from oil changes to engine replacement
- Honest-1 Auto Care - An eco-friendly car care company founded in 2003, focusing on pollution prevention, recycling, and resource conservation
- Alta Mere Automotive Outfitters - Install aftermarket accessories and window tint with a reputation for expertise and professionalism
- Milex Complete Auto Care - Providing a full range of auto care services such as preventive maintenance, brake repair, tune-up services, and engine repair
- Merlin 200,000 Mile Shops - Auto care centers with unique Motivation and Achievement Programs that help franchisees recruit, keep, and grow employees to promote better customer service
- Fleet Services International, Ltd. - SBA-approved network of on-site fleet repair dealerships serving commercial, government, and industrial clients across the US, including Amazon, U-Haul, and Cintas
- Fleet Services USA - Commercial vehicle maintenance and repair dealerships with major support services to help business owners to start and grow their company’s profitably
- Matco Tools - Manufacturer and distributor of professional quality mechanics’ tools and service equipment that allows franchisees the right to purchase, resell, and service the products as a mobile distributor
- Maaco - Paint and body repair services including cosmetic car repairs as well as fleet and industrial services
- RNR Tire Express - National franchise retailer of quality tires and custom wheels with a strong presence in Midwestern, Southern, and Southeastern states
- Glass Doctor - Offers complete glass replacement and repair services
- Snap-On Tools - Grants franchisees a license to operate a mobile store, selling quality repair and diagnostic tools
- Advanced Maintenance - Servicing and repairing commercial fleet vehicles and trucks with only a limited number of franchises awarded in any given area
This list is not exhaustive but represents the ample and diverse franchise opportunities available in the auto services industry.
The specialists at Black Iron Advisers are dedicated to working tirelessly with clients to identify opportunities (size, region, franchisor, etc.), negotiate purchase price and structure, and engage with all parties to ensure the deal closes.
[1] “United States Automotive Service Market - Growth, Trends, COVID-19 Impact, And Forecasts (2021-2026).” Mordor Intelligence. www.mordorintelligence.com/industry-reports/united-states-automotive-service-market.
[2] ibid.
[3] ibid.
[4] ibid.
[5] ibid.