Snap-on Tools is a tools manufacturer and distributor, selling professional tools and diagnostic equipment to automotive dealers, garages and workshops as well as farm and industrial businesses, boat yards, and marine and aviation specialists. Snap-on Tools franchisees operate from branded mobile stores, selling products to customers on an exclusive call list.Â
Snap-on Tools have been manufacturing and distributing tools for professional use since 1920 and offering franchise opportunities since 1991. A globally recognised brand, Snap-on is known for their high-quality, precision-made products. The company currently operates in over 130 countries, employs +13,000 associates, and has +4,700 franchises worldwide.
Snap-on tools at a Glance
As well as minimum net worth and available cash of at $53,000 each, you must be prepared to pay at least $170,000 to get into a Snap-on Tools franchise. Like other companies in this sector, Snap-on accepts franchisees who have no previous experience of the tools industry. However, this is not a ‘hands off’ or part-time opportunity. Snap-on expects all their franchisees to be actively engaged with running the business and interacting with customers on a daily basis.
Starting a Snap-on Tools franchise is not something you can do with loose change. Estimated starting costs range from $170,000 to $360,000 for a full bells and whistle package and the average investment is over $300k. That ranks the franchise cost as moderate to high. On the plus side, you don’t need to buy or lease expensive commercial real estate to run a Snap-on franchise. All Australian franchisees operate from mobile store vehicles. The initial franchise fee is $8,000 to $16,000. Snap-on provides a $20,000 inventory gift to franchisees who are military veterans.
After opening, you are required to pay an array of ongoing fees and charges. They include:
| Key Costs Guide | Low | High |
|---|---|---|
| Franchise fee | $8,000 | $16,000 |
| Real estate | $0 | $0 |
| Initial inventory | $135,000 | $145,000 |
| Mobile store – vehicle | $65,000 | $195,000 |
| Electronic signature pad | $0 | $200 |
| Store supplies | $0 | $400 |
| Insurance – 3 months premiums | $800 | $2,750 |
| Van delivery charge | $200 | $4,750 |
| License | $200 | $2,400 |
| Other costs – three months | $5,000 | $27,500 |
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They can be. The average Snap-on Tools franchise generates revenues of $750,000, or two and half times the typical investment cost. However, these are gross figures, not net earnings – which is the cash left over after paying all expenses of the business. Net profits in this industry range from 10% to 20%. If your profits were 15% – $112,500 per year – it would take 2.7 years to get the average investment back, which ranks as a good payback. Note that Snap-on Tools franchise owners collect an average gross salary up to $62,000 per year.
Very low. Even though the number of Snap-on Tools stores, both franchised and company owned, has been in slow decline for several years, the failure rate is miniscule. In 2022 the falure rate for Australian franchise stores was 0.5%.
Despite a starting price that is not cheap and personal income that is modest, a low failure rate and the speedy return of investment make Snap-on Tools a solid franchise possibility. If you’re mechanically minded and you like the idea of going out on the road to sell your wares to a range of interesting businesses, a Snap-on franchise could be the opportunity for you.
Franchisees are provided with an exclusive ‘call list’ that identifies a minimum of 200 potential customers along a designated call route. Franchisees can only sell to the customers on their call list. If franchisees remain in compliance with their distributorship agreement, Snap-on will not grant another franchise that is authorised to sell products to the customers identified on their initial call list.
Snap-on Tools support for franchisees includes:
It begins with an application. Start the process today.
Starting a new franchise can be an exciting opportunity, but it’s easy to get lost in a maze of business loan applications that can make funding your new tools distribution business like too much hard work. Instead, cut out the hassle and cut to the chase. Swoop has the best lenders for the best franchises across Australia. Just tell us what you need and leave the rest to us.
Written by
Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Barclays Bank, Metro Bank, Wells Fargo, ABN Amro, Quidco, Legal and General, Inshur Zego, AIG, Met Life, State Farm, Direct Line, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of consumer and business finance and insurance.
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