Ace Hardware franchise

Hassle-free business loans to start your Ace Hardware franchise.

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Ace Hardware sell home improvement products, tools, paints and a wide range of hardware via the largest retailer-owned hardware cooperative in the world. Ace sets itself apart from its big-box competitors by offering convenient, locally-owned neighborhood locations that are staffed by friendly, expert associates. 

Ace Hardware business details

Ace Hardware was launched in Oak Brook, Illinois, in 1924 and they have offered franchise opportunities since 1976. Today, there are more than 5,500 Ace Hardware stores scattered across the globe.

Ace Hardware at a glance:

  • Stores: 5,500+
  • Required investor net worth: $400,000
  • Required investor liquid cash: $250,000 
  • Minimum investment: $280,000
  • Maximum investment: $2,000,000

Can I start an Ace Hardware franchise?

Yes, if you can meet the financial requirements. As well as finding the resources to meet the start-up costs of a new store (see below), Ace demand that their franchisees must have a minimum net worth of $400,000 and liquid assets of $250,000 or more. Apart from this, Ace set few restrictions on franchise ownership, although you (or a co-investor) will be required to take a day-to-day role in running the business. This is not a franchise you can run as a light-touch or passive investor. 

How much does an Ace Hardware franchise cost?

Depending on location, size of your store, the amount of inventory you carry at opening, the size of your retail team, and many other variable cost factors, opening a new Ace Hardware franchise can cost from $280,000 up to $2,000,000. This does not include any additional services, such as providing an Ace Rental Place tools and equipment rental subsidiary.

After launch, there is no ongoing royalty fee with an Ace Hardware franchise. The few extra ongoing fees and charges include:

  • Royalty fee: zero
  • Late payment charge: 0.77% of the past due bi-weekly billing statement balance
  • Low volume service charge: $100 per bi-weekly billing period if the annual volume purchased is less than $200,000

Core retail services fee: $300 per month for all parent stores and $125 per month for branch stores.

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Estimated key costs to open an Ace Hardware franchise (new store):

Key Costs GuideLowHigh
Franchise fee$5,000$5,000
Capital stock subscription $5,000$5,000
Initial advertising$6,000$12,000
Exterior Signage$10,000$30,000
Training for you and your retail team$0$37,000
Opening inventory$200,000$1,000,000
Store set up – fixtures, improvements, décor, etc.$100,000$200,000
Store set-up labor$30,000$120,000

Other Ace Hardware franchise start-up options:

Instead of opening a new ground-up location, with all the costs that come with that, you could convert an existing hardware retail store into an Ace Hardware franchise location. Ace says that converted stores typically experience an 11% lift in retail sales, 12% increase in gross margins, and a 24% boost in gross profits after conversion. Ace offers special incentives for conversions, depending on the size, setup, and product mix of the store in question.

Alternatively, you could add an Ace Hardware unit to an existing independent grocery business and take advantage of existing foot traffic. There are over 200 Ace Hardware + Grocery combination franchises across the US. This option requires no franchise fees or royalties, and Ace supplies free initial inventory.

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Are Ace Hardware franchises profitable?

Many variables can impact the performance of any store. Your site location, opening hours, range of products, marketing, and other important factors will determine if your Ace Hardware store makes money. However, according to external research, the average Ace location has annual turnover of more than $3,000,000 and your initial investment should be returned within the franchise term.

What is the failure rate for an Ace Hardware franchise?

Very low. According to Ace Hardware, new ground-up stores have a nearly 99% success rate, and the average store yields sales of $138 per square foot in their first year.

Why should you start an Ace Hardware franchise?

Investing in an Ace Hardware franchise is an interesting opportunity. Especially for newcomers to the retail sector. Growth prospects and success within the Ace Hardware brand are extensive and it is a brand with a proven track record. If you’re passionate about your community, are keen to provide an important local service, and can meet the financial requirements, an Ace Hardware store may be the right franchise for you.

What are the franchise territory policies for Ace Hardware?

Ace Hardware grants its franchisees the right to operate in a protected area. It does not authorize any other franchise or a competing brand to operate in the protected area.

What franchise resources does Ace Hardware offer?

Ace Hardware Corporation provide comprehensive support to their franchisees. Available resources include:

  • Marketing support: Franchisees can leverage national and regional advertising strategies, email marketing, web development, loyalty program apps and local market campaigns.
  • Flexible store designs: The franchisor utilizes different store sizes and designs. This includes small, urban stores and large, rural stores, allowing franchisees to make the most of available real estate opportunities. 
  • Comprehensive training: Ace has a detailed online and in-person training program to help franchisees manage and operate their stores. Franchisees get training on the franchisor’s business concept, customer service, hiring qualified staff and how to carry out a successful grand opening. 
  • Third-party financing: Ace has relationships with third-party lenders who may offer funding for the franchise fee, startup costs, equipment, inventory and payroll. Or you could work with the many independent funders who provide business loans to franchise operators.
  • Site selection and construction: Ace Hardware offers its franchisees site selection support to identify the right store location in terms of traffic and competition. Ace can also help you with lease negotiation, store design and build out. 
  • Simple franchise process: Franchisees can get started quickly and scale into multiple units. 

What is the process for starting an Ace Hardware franchise?

Securing an Ace Hardware franchise means passing their initial preview and qualification tests. This will cover things like your management and organization skills, your communication skills, sales skills, a successful track record, leadership qualities, and a sound knowledge of marketing. You can start the process here.

If you pass the qualification tests, next do your own market research. This would include an assessment of the competition in your selected operating area, and the potential for sales and growth. (Will the store be in a location that is expanding, with new homes and businesses arriving, or older properties being refurbished?). Calculate the likely footfall and how many sales you could make per day. If the data adds up, explore your franchise funding options, and be sure you meet the minimum net worth and liquidity levels. After that, make your initial investment, then start your training program.

Secure franchise funding with Swoop

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 hardware store 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 the US. Just tell us what you need and leave the rest to us.

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Testimonials

Written by

Chris Godfrey

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 Wells Fargo Bank, Visa, Experian, Ebay, Flywire, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of US consumer and business finance.

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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.

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Article sources
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Swoop requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate.

Ace Hardware: https://www.acehardware.com/about-us

Profitability: https://sharpsheets.io/blog/ace-hardware-franchise-sales-costs-profits/

Failure rate: https://www.franchisetimes.com/franchise_news/ace-actively-fueling-store-growth/article_d8b9d502-49c9-5f98-8746-2d8f72a9dd12.html

Independent funders: https://swoopfunding.com/us/blog/funding-your-franchise-a-guide-for-franchisees/

Ace application form: https://www.myace.com/

Franchise funding: https://swoopfunding.com/us/blog/funding-your-franchise-a-guide-for-franchisees/

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