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1AAMCO FRANCHISE INFORMATION REPORT
CONTENTSWHAT IS AAMCO TRANSMISSIONS? 3WHAT ARE MY START-UP COSTS? 6HOW MUCH CAN I MAKE? 8WHAT TRAINING AND SUPPORT IS PROVIDED? 10HOW DO I FINANCE AN AAMCO? 12MEET THE MANAGEMENT TEAM 15NEXT STEPS 182AAMCO FRANCHISE INFORMATION REPORT
WHATIS AAMCOFRANCHISE?AN ICONIC AMERICANBRAND FOR THE PAST 50YEARS, AAMCO IS WELLPOSITIONED TO BECOMETHE DOMINANT PLAYERIN COMPLEX CAR REPAIRGOING FORWARDFor half a century, the American publicimagination has linked the word “transmission”to AAMCO — and for good reason. Ourproven expertise in fixing the most technicallychallenging part of a car is heralded far andwide, and as a result, we remain the leadingbrand for transmission work. Rather than rest onour laurels, AAMCO has prepared for the radical3AAMCO FRANCHISE INFORMATION REPORTshift inautomotive repair.As cars become more likecomputers on wheels, and as hybrid andelectric vehicles become mainstream, AAMCO ismaking significant strides toward becoming theonly brand capable of fixing them.In recent years, AAMCO has investedsignificantly in new technology and ongoingeducation to ensure that our franchise ownersand their technicians have the skill set tomeet the demands of modern vehicles withthe expertise for which our brand is known. In2014, we launched AAMCO University, a stateof-the-art training facility in Newnan, Georgia,which offers more than 300 hours of classes forfranchisees and their technicians, as well a hightech garage where technicians can learn how torepair electric and hybrid vehicles.To make the business easier to run and moreprofitable, AAMCO recently launched a newPoint of Sale system that provides franchiseeswith executive-class analytics, helping to make
In recent years, AAMCO has madesignificant investments in technologyand training that have made AAMCOeasier to run and easier to scalethan ever. Our existing franchiseesare submitting deposits to open newcenters in record numbers.Kim RobinsonDirector of Franchise Developmentscaling to multi-unit ownership easier thanever before. AAMCO also invested in new CRMsoftware, which gives franchise owners accessto the entire support network.As part of the Icahn Automotive Group, AAMCOfranchise owners enjoy enormous benefits. IcahnAutomotive Group is one of the largest franchisorsin the auto repair industry, with over 2,000locations across four different brands. The brandsin the Icahn Automotive Group network specializein different aspects of car repair, and can thereforesupport each other and refer business back andforth. For example, if a customer visits one of the1,000 Pep Boys locations across the country,and the vehicle requires transmission repair, thatPep Boys shop will refer that customer to theirlocal AAMCO. Icahn Automotive Group also helpsAAMCO franchise owners keep ongoing inventorycosts low, due to the strength of the brand’sspending power.“These initiatives have had a tremendousimpact. In an interview with Franchise Times,”Brian O’Donnell, Senior Vice President ofFranchise Development with AAMCO, said,“Centers training at the highest levels are seeing15 to 20 percent sales increases, and the abilityto offer training helps franchise owners attract4AAMCO FRANCHISE INFORMATION REPORTand retain technicianswhen the rest of theindustry is struggling tohire qualified personnel.Most importantly,existing franchisees arereinvesting in recordnumbers as a direct resultof these initiatives, andentrepreneurs without anyexperience in auto repairare rapidly joining ourfranchise family.”“It could not be a more exciting time to be anAAMCO franchisee,” says Jim Gregory, Presidentof AAMCO. “We’re lucky to be a part of anincredibly large industry that’s profitable andrecession-resistant, and our ability to become thedominant brand for complex car repair positionsus to make the future brighter than ever before.Our main goal is to help our franchisees thriveand prosper, and we have made significantinvestments on our franchisees’ behalf to increaseprofitability over the long term. AAMCO is goingto continue to grow, and we cannot wait to helpmore entrepreneurs realize their dreams of owninga business that has the potential to be financiallyand personally rewarding.”
vehicles also is lucrative. In the Nissan Lead,one of the most popular electric vehicles on theroad, a new battery will cost upwards of 5,499.More importantly, putting a new battery in is toodangerous to do at home or at your typical autorepair shop. Doing it safely requires a significantamount of training and expertise.AAMCO FRANCHISEOWNERS ENJOY HIGHMARGINS AND LITTLECOMPETITIONThere aren’t many worldwide leaders intransmission repair — there’s only one — andbeing associated with a brand that has spentdecades building consumer trust and loyaltycomes with several advantages. The firstadvantage is immediate: when you open yourdoors to your new business, your communityalready will know where to take their vehiclesfor complex car repair. The other advantageis that the automotive industry is changing sorapidly that other brands are far behind in termsof being able to repair complex vehicles. So themarket is wide open.One other advantage in being the worldwideleader in transmission repair is that complexcar repair is lucrative. According to Angie’sList, the average cost of transmission repaircan range from 2,800 to 3,800 for a rebuilttransmission and up to 8,000 for a transmissionreplacement. Higher tickets means that AAMCOcenters can thrive on a much lower volume thanbrands that specialize in common car repair,such as oil changes and brake pad replacement.The cost of replacing batteries on electric5AAMCO FRANCHISE INFORMATION REPORTWhile no one likes to be alarmed by the checkengine light, AAMCO goes above and beyond tomake the experience easier on the consumer.Last year, we rolled out a consumer financingplatform, which approves customers of all creditratings in minutes, and offers them the ability tobudget an expensive repair. In turn, the abilityto offer consumer financing helps AAMCOfranchise owners generate more revenue andbetter serve their communities.“55 years ago, a single AAMCO center startedservicing transmissions in the Philadelphiamarket,” said Brian O’Donnell, Senior VicePresident of Franchise Development withAAMCO. “Before that, consumers had reallyone choice: going back to the dealer, which wasexpensive and inconvenient. That created theneed for this transmission shop. In turn, it createdan entire industry, and the industry boomed.”
“Roll forward to 2018, and AAMCO is positionedto take advantage of a new boom in a new era:hybrids, electric vehicles, complex repair, CVTtransmissions — they’re coming into our storesright now. And right now, hybrid and electricvehicle owners think that they have to take theircars back to the dealer. We’re going to ownthat market. We offer better pricing and a betterconsumer experience, and we’re right theretoday, just as we were 55 years ago, when thetransmission industry opened up and we createdthis great brand.”BRING THE ICONIC AUTOREPAIR FRANCHISE TOYOUR COMMUNITYAAMCO’s network of locally owned andindependently operated automotive servicecenters employs the latest technology. Experttechnicians diagnose a repair, fix it right the firsttime and back it with a nationwide warranty.Known as the world’s leading transmissionexpert, AAMCO enjoys enormous brand equity,decades of consumer trust and enormousgrowth potential.With more than 600 centers across NorthAmerica, AAMCO is actively seeking single- andmulti-unit operators who are passionate aboutthe brand and committed to providing thehighest-quality service. Interested candidatesshould have a minimum net worth of 250,000and liquid assets of at least 65,000 per unit.Depending on the real estate site selected,franchisees can expect the total investmentto be 223,600 to 330,500, with a 39,500initial franchise fee. Reduced franchise fees areavailable for honorably discharged veterans.“There is no question that the interest in AAMCOis incredibly strong,” says Kim Robinson, Directorof Franchise Development with AAMCO. “As aninvestment opportunity, AAMCO truly makes sensefor entrepreneurs who want to join a brand that iscommitted to their success. In recent years, AAMCOhas made significant investments in technologyand training that have made AAMCO easier torun and easier to scale than ever. Our initiatives tosimplify our business model are working, becauseour existing franchisees are submitting deposits toopen new centers in record numbers.”WHAT ARE MYSTART-UP COSTS?INVEST IN YOUR AAMCOFRANCHISE CENTER WITHCONFIDENCEThe total investment to open a new AAMCO autofranchise ranges from 223,600 to 330,500.This figure includes a 39,500 franchise fee, aswell as the costs for equipment, training, leasinga property, and other items.Franchise candidates should have a minimumof 60,000 in liquid capital and a net worth of atleast 250,000 to get started. The decision toopen an AAMCO franchise is a major investment,which is why we offer several financing optionsthat make it possible for us to partner with themost passionate owners in the industry.6AAMCO FRANCHISE INFORMATION REPORT
AAMCO FRANCHISEITEM 7AmountMethod of PaymentWhen dueTo whom paymentis to be made 39,500InstallmentsUpon Signing FranchiseAgreementAAMCOBusiness CoachTraining 10,000Lump SumUpon Signing FranchiseAgreementAAMCOAAMCO Security Deposit 5,000Lump SumUpon Signing FranchiseAgreementAAMCOGrand Opening AdvertisingExpenses 3,000Lump SumUpon Signing FranchiseAgreementAAMCOTravel Expenses for TrainingProgram 2,000 - 4,000As IncurredBefore OpeningThird PartiesReal Estate & Utility Deposits 14,000 - 43,000As IncurredBefore OpeningLandlord, Utility Companies,other Third Parties 8,500 - 12,000As ArrangedAs ArrangedLandlord, other Third Parties 7,500 - 19,000As AgreedBefore OpeningAAMCO 78,400 - 98,000As AgreedAs ArrangedAAMCO and Third Parties 500Lump SumBefore OpeningAAMCO 6,500 - 10,000As IncurredAs ArrangedOffice Furniture 5,500 - 7,000As IncurredAs ArrangedSales Materials 500 - 1,000Lump SumBefore OpeningAAMCO 4,000 - 10,000As IncurredAs ArrangedThird Parties 1,500 - 2,500As IncurredBefore OpeningThird PartiesAAMCO, Ad Pool, regionalmonthly internet searchprogram (or national programif applicable) and Yellow PageagencyType of ExpenditureInitial License Fee(including credit of application feereceived under Deposit Agreement)Leasehold ImprovementsSigns(included in Center OpeningPackage)Shop Equipment, Supplies,Lifts & Installation, plus freight& Taxes(included in Center OpeningPackage, See Item 5)POS SystemComputers and Phone System- HardwareMiscellaneous Costs &Professional Fees(Legal and Accounting Advice,Personnel recruitment, etc)InsuranceAdvertising Costs(13 weeks)Additional FundsTOTAL ESTIMATEDINITIAL INVESTMENT 4,700 - 13,500As agreedPeriodically (weekly ormonthly) and As arranged 30,000 - 50,000As IncurredAs ArrangedSuppliers you choose(may include AAMCO)Suppliers you choose(may include AAMCO) 223,600 - 330,500* Start-up costs can vary depending on the market and individuals’ financial needs.
in vehicles after crossingthe 80,000- to 90,000mile mark.HOW MUCH CAN IMAKE?AAMCO IS A PROVEN,TOP-RATED BRAND WITHA CLEAR PATH TOWARD APROFITABLE FUTUREOne of the biggest positives in partneringwith a nationally known brand with a 50-yearhistory of expertise and customer trust is thatthe groundwork already is laid. We have spentdecades establishing ourselves as a preeminentbrand, and franchisees benefit from that legacythe day they open their doors.AAMCO enjoys overwhelming brand recognitionin the lucrative transmission segment, whichis the direct result of our winning the nation’strust to fix the most complicated part of the car.This ability is a huge boon to our franchisees, astransmission repair is one of the most expensiveparts to fix. It ranges from 2,800 to 3,800 fora rebuilt transmission and up to 8,000 for atransmission replacement, according to Angie’sList, which notes that wear and tear is common8AAMCO FRANCHISE INFORMATION REPORTThis is a tremendousadvantage that helpsAAMCO franchiseowners enjoy muchhigher margins thantraditional auto repairshops that specializein oil changes — whichmeans they need amuch higher customervolume to thrive. AAMCO, as the industryspecialist in transmission repair, requires a lowvolume of customers in comparison.“The average age of the vehicles that come intoour shop is 11-13 years old or older,” says JimGregory, President of AAMCO. “Consumers wantto hang onto their vehicles longer, and thosevehicles need to be repaired. The good news forAAMCO is that we are widely known for complexrepair. We fix the powertrain, the engine and,of course, the transmission. We’re a 55-year-
old brand, and we’vefixed over 45 milliontransmissions in thattime. As the car industryshifts toward electric andhybrid vehicles, we havethe high ground in thatwe already are known forcomplex repair. We arepoised to dominate thisfast-growing segment.”According to HybridCars, there are 4 millionhybrids on the road,and this number is poised to go up. A new AAAsurvey reports that 20% of car owners want tobuy an electric car or a hybrid in the future, citingenvironmental accountability and better gasmileage among their reasons. When their warrantyruns out at the dealership, owners of thesevehicles will have very few repair options outside ofthe expensive and inconvenient dealerships. This iswhere AAMCO is primed to thrive.The cost of repairing hybrid and electric vehiclesis one of the most promising revenue streams forAAMCO franchise owners. Replacing the batteryof a Nissan Leaf will cost 5,499, and only aqualified and skilled technician will be able todo the job safely. AAMCO invested in hybridand electric vehicles for technicians to receivehands-on training at our state-of-the-art trainingfacility, AAMCO University. Since we launchedthe program, we already have trained hundredsof technicians and are introducing marketingcampaigns to get the word out that AAMCO isready, qualified and competent in hybrid andelectric vehicle repair.“We are extremely well positioned in today’smarketplace,” Gregory says. “We’ve spent over 800 million in advertising in marketing the brandover 55 years, and noother brand even comesclose to matching that ormatching our reputationfor complex repair.”The investments AAMCOmade in new technologiesextend directly to ourfranchisees, who nowhave industry-leadingtools to help manage theirbusinesses and increaseprofitability. Our new9AAMCO FRANCHISE INFORMATION REPORT
Point of Sale system provides AAMCO franchiseeswith executive-class analytics that are updatedto the minute and are accessible from anywherein the world. AAMCO also launched a consumerfinancing platform, which allows franchise ownersto make more high-ticket sales without burdeningtheir customers.“We are a data-driven company,” says BrianO’Donnell, Senior Vice President of FranchiseDevelopment with AAMCO. “While technologyhas been a challenge to our competitors, it isan advantage for AAMCO because we do havethe skill set and capability inside our franchisecenters. We have the ability to diagnose electricproblems and perform high-quality repairs. Mostimportantly, we have the capability to be thespecialist in the consumer’s mind, because theyunderstand that their vehicles are so complicatedthat they require a specialist. Our POS systemprovides KPIs that allow our franchisees to makegood business decisions based on real data.Technology is a part of our growth, and we’re ableto see the benefits of it today.”WHAT TRAININGAND SUPPORT ISPROVIDED?AAMCO OFFERS ELITETRAINING AND SUPPORTFOR ALL PARTS OFFRANCHISEES’ BUSINESSESThe AAMCO leadership team believes that it’sabsolutely paramount that we are perceived asthe industry’s technical experts. That is how we willmaintain the leadership position that our wonderfulbrand has earned over the past 50 years.We recognize that the automotive industryis becoming more complex, and to ensurethat our owners and technicians achieve thelevel of expertise they need, we have made asignificant investment in creating a state-of-theart education and training center, which we callAAMCO University.AAMCO UNIVERSITYWhile we don’t require that our owners haveautomotive experience before partnering withus, they will know the second they walk throughthe doors of AAMCO University that we take ourtraining seriously.10AAMCO FRANCHISE INFORMATION REPORT
Our top-of-the-line programs and equipment haveprovided consistent benefit to franchisees, staffand loyal customers who trust the AAMCO namelike no other in the automotive world. Franchiseowners can work with our expert instructors inmore than 300 courses, ranging from basic shopsafety to master-level diagnostics, transmissionrebuilding, and electric and hybrid vehicle repair.These modules are offered in classroom, onlineand interactive settings.WHAT YOU’LL LEARNAAMCO center owners receive more than 250hours of training at AAMCO University, as wellas more than 200 hours of online coursework.Here’s a basic overview of what you’ll learn: CUSTOMER CAREFrom first contact to vehicle delivery,franchisees become experts atensuring lasting and positiveexperiences for customers, leading toa positive reputation you can leveragefor word-of-mouth and future sales.drive repeat business. Special attention isgiven to pooled promotional advertisingopportunities and marketing to existingcustomers to serve their scheduledmaintenance needs. QUALITY CONTROLWe will teach you how to work with keyteam members to solve challengesrelated to parts, production andworkflow. This isn’t a theoretical exercise:We’ll play out common scenarios youcan expect as a business owner. UTILIZING BUSINESSNETWORKSWe’ll discuss opportunities for buildingand maintaining community ties andthe effect these relationships can haveon the top and bottom line. LEADERSHIPWe’ll study ways to build and enhanceleadership skills, which will help you builda more cohesive team, create attractivecareer paths for your employees andretain valuable team members. KEY PERFORMANCEINDICATORSIt’s important to be able to analyzeyour business and identify areas whereyou can grow and improve. We willhelp you understand the key metricsthat drive your business and how tointerpret the data. CENTER GROWTHSTRATEGIESWe’ll explore short-term and long-termplans for expanding your customerbase and offering additional services to11AAMCO FRANCHISE INFORMATION REPORTAAMCO UNIVERSITY SERVESAS A RECRUITMENT TOOLTO HELP YOU ATTRACTAND RETAIN THE MOSTQUALIFIED TECHNICIANSIN YOUR AREAAAMCO University serves your employees,too. It provides them training opportunities thathelp them build skills, which makes them more
important to us as the first three, because itreflects our ongoing commitment to training theteam that will be supporting you. Each school hasa growing list of custom coursework designedto create growth opportunities and help AAMCOmaintain the excellence that customers havecome to expect for more than 50 years.HOW DO I FINANCEAN AAMCO?valuable employees and enhances their earningpotential. The end result is that you are morelikely to hang on to your best people.AAMCO University offers courses for generaltechnicians, certified technicians, mastercertified diagnosticians, repair technicians,master transmission rebuilders, center servicemanagers and general managers. This abilityto educate technicians in a way that advancestheir skill set and career opportunities is atremendous asset for AAMCO franchise owners.“I am a technician, and one of the things thata technic
local AAMCO. Icahn Automotive Group also helps AAMCO franchise owners keep ongoing inventory costs low, due to the strength of the brand’s spending power. “These initiatives have had a tremendous impact. In an interview with Franchise Times,” Brian O’Donnell, Senior Vice President of
