1-800-Radiator Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$383,500 - $5,279,000
Total US Locations
195
Business Summary
1-800-Radiator & A/C® operates distribution warehouses that primarily sell automotive parts. These parts include radiators, condensers, air conditioning compressors, fan assemblies, fuel pumps, hoses, exhaust-related products, heavy-duty hard parts, and other related services. The products are sold to automobile repair shops, parts stores, fleets, chain accounts, and retail consumers. The business uses a sophisticated proprietary Network system for managing inventory, purchasing, customer orders, pricing, delivery, reporting, and accounting.
Corporate History
1-800-Radiator Franchisor SPV LLC was organized as a Delaware limited liability company on June 9, 2015. The underlying business concept for 1-800-RADIATOR & A/C® Warehouses has been operated by an affiliate, 1-800-RADIATOR & A/C® Corporation, since 2001. The predecessor franchisor, 1-800-Radiator Franchise Inc. (RFI), began offering 1-800-RADIATOR & A/C® franchises in 2004. In July 2015, as part of a secured financing transaction, all existing U.S. franchise agreements were transferred to 1-800-Radiator Franchisor SPV LLC, which then became the franchisor for the brand.
Financial Overview
Investment Range
$383,500 - $5,279,000
Franchise Fee (High)
$45,000
Royalty %
8%
Marketing %
2%
Equipment Costs (Low)
$47,000
Equipment Costs (High)
$100,000
Working Capital
$100,000
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
The guarantor's financial condition, as reflected in its financial statements, raises questions about its ability to provide services and support to 1-800-Radiator & A/C® franchisees. This is a special risk highlighted for consideration.
Financing Details
The 1-800-Radiator & A/C® franchise itself does not offer financing. However, its affiliates, at their sole discretion, may finance a portion of the initial costs and fees required to purchase a 1-800-Radiator & A/C® franchise. These affiliate loans can cover up to the entire purchase price, with amortization terms ranging from 1 to 9 years and an annual percentage rate (APR) between 7% and 9%. The specific terms and amount financed are negotiated individually, based on factors such as the franchisee's credit history and any guarantees from their owners. Franchisees may also be required to secure Small Business Administration (SBA) or other conventional financing to qualify for a loan from the affiliate.
Performance Metrics
Total US Locations
195
Franchised Units
194
Corporate Units
1
Avg Square Footage
10,750
Franchising Since
2004
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
9
Litigation Summary
1-800-Radiator Franchisor SPV LLC and its affiliates have been involved in several legal matters. A securities class action lawsuit was filed in December 2023 against Driven Brands Holdings, which includes Jonathan G. Fitzpatrick (Manager and CEO of 1-800-Radiator), alleging failure to disclose material adverse information or misrepresentations regarding business operations after acquisitions. Previously, in 2014, two arbitration demands were filed against 1-800-Radiator's predecessor by individual franchisees, alleging breach of contract, fraudulent misrepresentation, and unfair competition; both cases were settled in August 2015. Additionally, an affiliate, Take 5 Canada SPV LP, is involved in a pending lawsuit filed in December 2022 by a former franchisee, alleging breach of disclosure and fair dealing provisions, along with negligent misrepresentation. Another affiliate, Econo Lube N' Tune, Inc., entered into a consent judgment with the State of Arizona in October 2011 concerning alleged unfair trade practices. Furthermore, other affiliates within the broader Driven Brands network (Arby's, Dunkin') settled separate actions in March 2019 regarding "no-poaching" provisions, and Dunkin' Brands, Inc. settled a lawsuit in September 2020 with the New York Attorney General related to data privacy. The latter affiliate actions do not directly impact 1-800-Radiator or allege unlawful conduct by 1-800-Radiator.
Bankruptcy History
1-800-Radiator Franchisor SPV LLC has no bankruptcy history to report.
Agreement Terms
Initial Term
20 years
Renewal Term
20 years
Renewal Conditions
To renew the franchise, 1-800-Radiator & A/C® franchisees must provide written notice of renewal 12 to 18 months before the initial term expires. They must not have materially defaulted on the Franchise Agreement or other agreements with 1-800-Radiator & A/C® or its affiliates in the last 12 months, and must have maintained substantial compliance throughout the initial term. All financial obligations to 1-800-Radiator & A/C®, its affiliates, and suppliers must be fully and timely paid. Additionally, franchisees are required to complete any mandated additional training, modernize their warehouse, vehicles, and equipment to current system standards, pay a $20,000 renewal fee, meet 1-800-Radiator & A/C®'s then-current franchisee qualifications, and sign a new franchise agreement and a general release. The new franchise agreement may include materially different terms and conditions, potentially including higher ongoing franchise and marketing fees.
Training & Support Program
Franchisor Assistance
1-800-Radiator & A/C® provides various forms of support to its franchisees. Before opening, 1-800-Radiator & A/C® conducts an operations training course, provides access to the Operations Manual, and offers assistance with site selection (though franchisees make the final decision). It also coordinates pre-opening activities and provides support for the first five days during the opening week, which can be on-site or remote. Franchisees must pay $30,000 for an opening marketing package. Ongoing assistance includes making additional training programs available as deemed appropriate, developing and administering advertising and promotion programs using System Marketing Fees, and utilizing Local Marketing Fees to help market individual warehouses within their specific territories. 1-800-Radiator & A/C® designates the required recordkeeping systems and forms and conducts periodic visits to franchisee locations as deemed advisable. Franchisees may also receive assistance with marketing related to re-opening their warehouses, for which a $30,000 fee is required.
Initial Training Hours
40
Training Location
Corporate headquarters in Benicia, CA and a company-owned 1-800-Radiator & A/C® Warehouse in Sacramento, CA
Ongoing Support
1-800-Radiator & A/C® provides ongoing support through various means. This includes making additional training programs available as deemed appropriate, developing and administering advertising and promotion programs to enhance all 1-800-Radiator & A/C® Warehouses, and utilizing local marketing fees to assist franchisees with marketing within their specific territories. 1-800-Radiator & A/C® designates the required recordkeeping systems, forms, and procedures for warehouses and conducts periodic visits to franchisee locations as deemed advisable. Franchisees may also receive assistance with marketing related to re-opening their warehouses, for which a $30,000 fee is required.
Franchise Requirements
Ideal Candidate Profile
The ideal candidate for a 1-800-Radiator & A/C® franchise is an individual who is willing to commit to the business full-time, dedicating their best efforts and constant personal attention to its day-to-day operations. Franchisees or their designated field sales representatives are required to make a minimum number of personal sales visits and outbound calls to customers in their territory annually, indicating a need for strong sales and customer relationship management skills. Management skill and business acumen are noted as important factors for success.
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
Yes
Technical Skills Required
No
Operational Details
Location Type
Commercial
Owner Participation
full-time
Territory Type
Non-Exclusive
Staff Count
7
Territory Size Requirements
The territory size for a 1-800-Radiator & A/C® franchise is mutually agreed upon by the franchisee and 1-800-Radiator & A/C® and is based on population and other demographics. Each territory typically encompasses a customer base of between 500 and 3,000 automotive repair shops, parts stores, and similar businesses, although this number can vary.
Staffing Notes
The typical 1-800-Radiator & A/C® Warehouse employs Customer Service Representatives (Inside Sales) to handle inbound calls and assist with deliveries and outbound calls. Field Sales Representatives (Outside Sales) are required to make regular in-person visits and outbound calls to metro customers in their territory, with one full-time representative typically covering 1,250 to 1,875 metro shops. Drivers are hired or contracted to deliver products to customers, with most franchisees employing at least one full-time driver for every $300,000 to $500,000 in revenue. Franchisees often use a mix of employed drivers, contract delivery services, and on-demand options to manage costs and seasonal fluctuations. Labor costs include health insurance, state and federal taxes, and Social Security.