Matco Tools is a tools distribution franchisor, selling tools and sundry items to automotive dealers, garages and workshops as well as farm and industrial businesses, boat yards, and motorsport and aviation specialists. Matco franchisees operate from branded mobile stores, selling products to customers on an exclusive call list. The company claims to be the fastest growing tools distributor in the sector.
Matco Tools are headquartered in Stow, Ohio. They started manufacturing and distributing tools for automobile repair in 1946. Their franchise operations began in 1993. Today they sell tools, auto components, accessories, diagnostic equipment and even model car collectibles. Along with Snap-On and MAC, they are one of the nation’s largest tool suppliers, with over 1,900 mobile stores across the US and Canada.
Matco Tools at a glance:
Stores: More than 1,900
Required Investor net worth: $35,000
Required investor liquid cash: $15,000
Min. investment: $80,000
Max. investment: $340,000
Standard franchise term: 10 years
You’ll need at least $15,000 in liquid cash and a minimum net worth of $35,000, otherwise, Matco say franchisees need no previous experience of the tools industry. Note that this is not a passive type of opportunity. Matco expect all their franchisees to be actively engaged with running and building the business and interacting with customers. You cannot run this franchise from your armchair.
Although Matco Tools suggest a minimum investment of $80,000, the average investment for new franchisees is closer to $200,000. This places the cost of a Matco Tools franchise between as moderate. Note that the average cost includes a basic vehicle and minimum inventory. A larger and more costly vehicle, plus increased inventory could increase your initial start-up cost up to $340,000 or more. Additionally, franchisees can only sell products bought through Matco and they must maintain an inventory that is at least equal to their starter inventory and a ratio of purchase average to total sales of 60%. The starting franchise fee is $8,000. There are no royalty or advertising fees.
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 | $8,000 |
| Starter inventory | $55,000 | $90,000 |
| Deposit into time-payment reserve account | $22,000 | $22,000 |
| Mobile store – 1.5 months lease payments | $3,000 | $170,000 |
| Computer hardware | $3,000 | $4,000 |
| Computer software | $3,000 | $4,000 |
| Insurance – 3 months premiums | $800 | $3,000 |
| Professional services | $300 | $8,500 |
| Fixtures, supplies, licenses | $535 | $4400 |
| Other costs – three months | $5,000 | $13,500 |
Your loan details
This calculator is intended for illustration purposes only and exact payment terms should be agreed with a lender before taking out a loan.
Your results
Monthly payments
$-
Avg. monthly interest
$-
Total interest
$-
Total cost of finance
$-
Maybe. Matco Tools franchises have an average set-up cost of $200,000 and average annual sales of $450,000 giving them a sales to investment ratio of x2.3. However, this is a gross sales figure, 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% – $67,000 per year – it would take 4.5 years to get the average investment back.
Medium to high. Matco says that in 2021, 189 franchise operations closed or ceased operations. This was approximately 10% of their Canadian distributor network. (15 franchises closed within the first 12 months).
If you’re looking for a business opportunity that comes with low to moderate start-up cost and you love the tool industry and talking to people and driving, then a Matco Tools franchise could work for you. Best of all, although the Canadian auto and industrial tools distribution industry is competitive, it is also near recession-proof, giving potential franchisees scope to grow their business into a major success. Some Matco franchisees have built their businesses into multi-million dollar operations.
Franchisees are provided with an exclusive ‘call list’ that identifies a minimum of 325 potential customers along a designated call route. Franchisees can only sell to the customers on their call list. Matco make no promises to enlarge a franchisee’s call list with additional stops or potential customers in the event that the number of potential customers on their initial list declines. If franchisees remain in compliance with their distributorship agreement, Matco will not grant another franchise that is authorized to sell products to the customers identified on their initial call list.
Matco Tools support for franchisees includes:
It starts with an application. Begin 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 Canada. Just tell us what you need and leave the rest to us.
Daire made it happen! There is no doubt that Swoop sped up the process and found lenders that worked to our time scale rather than the other way round
Joint owner, F45 Virginia
Swoop was actually very helpful in helping us get our initial fundraising in place. Swoop was able to connect us with investors, with grant financing options and debt financing options.
Founder, SingleKey
Pedja was amazing. Super supportive, understanding of our needs and wasn't pushy at all. We've been going back and forth with Swoop for over a year inquiring about different financing options and they were patient until we were ready!
F45 Multi-studio owner
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.
Swoop promise
At Swoop we want to make it easy for SMEs to understand the sometimes overwhelming world of business finance and insurance. Our goal is simple – to distill complex topics, unravel jargon, offer transparent and impartial information, and empower businesses to make smart financial decisions with confidence.
Find out more about Swoop’s editorial principles by reading our editorial policy.
UK
IRE
AU
CA
US
ZA
NG
yet? Register here!