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Trust the Midas touch.
It’s the slogan that car owners have heard for years, signifying the brand’s longtime commitment to quality and customer service. Not surprisingly, the brand has become widely trusted by consumers for decades now for vehicle owners looking for car parts, repairs, and just about everything else in between.
But why do entrepreneurs trust the Midas touch too? Our Midas case study takes an in-depth look at the automotive industry leader, examining the business’ story, why entrepreneurs choose to franchise with the company, key FDD information, and more. Let’s get started!
The Midas Story
The Midas story dates back many years and is in many ways symbolic of the growth and success of franchising in post-World War II America.
The business was established on April 20, 1956 by Nate H. Sherman, with Midas being an acronym for Muffler Installation Dealers’ Associated Service. The company’s first franchise location, run by Hugh Landrum, opened up later that year in Macon, Georgia.
Sherman, the president of the International Parts Corporation and an entrepreneur from Chicago in the car muffler manufacturing business, saw the potential in the rapid growth of the automobile market in the United States at the time. He believed that a new type of business was needed to sell mufflers directly to consumers, cutting out the need for distributors and that efficient, customer-centric service was needed for success.
Sherman guessed the market correctly and soon saw his vision play out in reality, as about 100 franchised Midas locations were in operation by the end of 1957. Sherman’s vision stretched well beyond just a new business model for the auto parts and auto repair market. Understanding that most Americans had a limited understanding of how cars worked, he instructed his franchisees to not only give customers written estimates, but also work with them directly and educate them on what repairs were needed. He even encouraged Midas shop owners to install large windows in their locations where customers could watch the repairs being made to their cars. This marketing strategy helped to educate consumers about their cars, quickly establishing Midas as a brand that could be trusted and put its customers first.
Midas soon began growing rapidly in the 1960s and 1970s, with the company offering shock absorber service in 1960 and brake services in 1979. It continued to grow and retain loyal customers in the 1980s, reaching a milestone 2,000 locations in 1986 and surpassing $1 billion in U.S. sales a few years later in 1993.
Today, Midas continues to be a major player in the automotive services market, offering motor vehicle repairs and selling mufflers, tires, exhaust pipes, brake pads, and other car parts at more than 2,300 locations in 13 countries.
Why Does Midas Offer the Golden Touch for Entrepreneurs?
The next part of our Midas case study examines the benefits of being a Midas franchisee and why entrepreneurs should consider franchising with this brand. Here’s a closer look!
1. Outstanding Brand Recognition
One of the strong benefits of franchising with Midas is the company’s exceptional brand recognition. In business since 1956, the Midas franchise has become well-known to and trusted by consumers all across the United States for decades, creating a large, built-in customer base and high amount of consumer trust and loyalty.
2. Proven Business Model with Extensive Experience
Midas offers franchisees decades of experience and a proven business model that’s stood the test of time to support them. For entrepreneurs seeking out a seasoned franchisor that knows the fine details of the industry well, Midas is hard to beat.
3. Solid Franchisee Training and Support
Midas franchisees also benefit from the business’ robust training and support programs.
New franchisees receive an extensive orientation session that includes in-shop observation, crafting an initial business plan, and analyzing the competition, as well as training in operating Midas’ point-of-sale system. Supplemental training services are also available.
In addition to all of this, the company offers ongoing support that includes marketing and advertising assistance and operational and developmental support through dedicated Franchise Business Managers and Shop Operations Managers who act as liaisons with the franchisor.
4. Established Leader in a Large Market
For years, Midas has been an established leader in the auto parts and auto repair market, trusted by millions of customers throughout the United States. In fact, the U.S. auto aftermarket stood at approximately $273.4 billion in 2017, meaning that entrepreneurs who franchise with Midas can tap into this huge and lucrative market for themselves.
5. Great Opportunity for Entrepreneurs Interested in Cars and Mechanics
Finally, the Midas franchise is an ideal opportunity for entrepreneurs interested in cars and all things mechanical. By becoming part of a major franchise with decades of brand recognition, Midas franchisees can position themselves as leaders in this industry themselves and work directly in the robust automotive market.
Initial Franchise Fee: $10,000 – $30,000
Per the 2019-2020 FDD for Midas, the franchise has a standard initial franchise fee of $30,000, though certain discounts are available that can reduce the fee to as low as $10,000.
Royalty Fees: 2% – 11% of Net Revenue
Typically, the royalty fees for owning a Midas franchise range between 2% and 10%, though this figure increases to 11% in certain cases for a co-branding shop franchise.
Estimated Initial Investment Cost: $191,650 – $468,482
|Name of Fee||Low||High|
|Initial Franchise Fee or Minimum Site Payment||$10,000||$30,000|
|Marketing Support Program||$5,000||$10,000|
|Travel & Living Expenses while Training||$1,000||$7,800|
|Security Deposit, Licenses and Permits||$0||$14,000|
|Rent and Real Estate Taxes (3 months)||$15,000||$42,000|
|Warranty Registration Fee (3 months)||$150||$2,000|
|Equipment and Tools||$50,000||$151,000|
|Shipping and Installation Costs – Equipment||$5,000||$20,000|
|Computer, Hardware & Telephone System||$6,000||$6,000|
|Office & Waiting Room Furniture & Point of Purchase Materials||$13,000||$13,000|
|Shipping and Installation Costs – Signage||$6,000||$9,000|
|Initial Inventory & Supplies||$25,000||$50,000|
|R.O. Writer Software||$0||$2,500|
|R.O. Writer Software Maintenance Fee (3 months)||$0||$375|
|R.O. Smart SmartStatus Installation and Monthly Fees (3 months)||$0||$650|
|Epicor Parts & Labor Guide Subscription (3 months)||$0||$300|
|MotoLOGIC Repair 3 User Subscription (3 months)||$0||$357|
|Insurance (3 months)||$1,500||$4,500|
|Legal & Accounting||$1,000||$3,500|
|Additional Funds (3 months)||$40,000||$65,000|
Revenue Range: $222,749 – $1,188,479
Per the most recent FDD for the Midas franchise, the revenue range for the company is approximately $222,749 to $1,188,479. It’s important to note that these are only historical revenue ranges, not in any way a guarantee or projection of what franchisees can expect to make at Midas.
Does Midas Offer the Right Touch for You?
Midas, with its decades of brand recognition that have built customer loyalty and trust, robust training and support, and proven business model, offers a great opportunity for entrepreneurs interested in the automotive industry. If you’re interested in revving up your career, you might just want to trust the Midas touch and see where your entrepreneurial road takes you!
Interested in franchising with Midas? Check out their client page here!