Matco tools franchise

Hassle-free business loans to start your Matco tools franchise.

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 business details

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 1,950 mobile stores across the US and Canada.

Matco Tools at a glance:

  • US stores: Approximately 1,950

  • 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

Can I start a Matco Tools franchise?

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.

How much does a Matco Tools franchise cost?

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:

  • Computer maintenance and support charge: $700 to $1,100 per year
  • License fee for credit card processing: $350 per year
  • Field training for additional employees: $1,500 per week
  • Web page maintenance fee: $195 per year
  • Late fees: 5% of amount due per week up to $100 per week maximum
  • Transfer assignment fee: 50% of current Matco franchise fee

Estimated key costs to open a Matco Tools franchise:

Key Costs GuideLowHigh
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

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Are Matco Tools franchises profitable?

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. 

What is the failure rate for a Matco Tools franchise?

Medium to high. Matco says that in 2021, 189 franchise operations closed or ceased operations. This was approximately 10% of their US distributor network. (15 franchises closed within the first 12 months).

Why should you start a Matco Tools franchise?

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 US 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. 

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What are the franchise territory policies for Matco Tools?

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.

What franchise resources does Matco Tools offer?

Matco Tools support for franchisees includes:

  • Training: Franchisees must successfully complete the Matco Business System Training Program before operating their distributorship. Matco provides franchisees with at least 50 hours of mandatory initial classroom training (MBST) at their corporate offices in Stow, Ohio. Additionally, the company may require franchisees or to attend and successfully complete at least 35 hours of mandatory continuation training. 

  • Marketing support: Matco provides signage, catalogs, merchandising, point of sale, promotional and other marketing support for their franchisees.

  • Third-party financing: Matco provides financial support for investors seeking franchise funding. However, you may obtain more economical and flexible funding solutions from the many independent funders who provide business loans to franchise operators.
  • Sales and product support: The company offers a 100% US-based support network for franchisees, open 16 hours a day

What is the process for starting a Matco Tools franchise?

It starts with an application. Begin the process here.

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

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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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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.

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