Auto Appraisal Network Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$16,700 - $44,275
Franchise Fee
$9,600
Min Cash Required
$3,000
Total US Locations
23
Business Summary
Auto Appraisal Network is a franchise business that specializes in providing professional evaluations and inspections for all kinds of vehicles, including automobiles, watercraft, and motorcycles. These appraisals are often needed by vehicle owners for purposes like financing, insurance, or other specific requirements. Franchisees of Auto Appraisal Network will primarily serve clients such as classic car and motorcycle collectors, as well as owners of specialty vehicles and sports cars. They find customers through various channels like car clubs, car shows, networking events, insurance companies, and financial institutions, or through referrals from existing clients or the franchisor. The core service involves franchisees traveling directly to the customer's location to inspect and evaluate the vehicle. They use specific training, guidelines from an operations manual, and proprietary software installed on a laptop provided by Auto Appraisal Network. Franchisees also take required photographs with a provided digital camera. After completing the on-site inspection, franchisees are responsible for collecting payment from the customer. The electronic files of the evaluation and digital images are then sent to Auto Appraisal Network, which processes and completes a certified appraisal report. This report is then digitally signed by the franchisee and sent as a PDF to the customer, with a bound physical copy mailed directly within two business days.
Corporate History
Auto Appraisal Network was formally established and incorporated in California on August 28, 2006, with the main goal of offering and supporting its franchisees. The idea behind Auto Appraisal Network was to create a national network for vehicle inspection services, building upon business experience gained even before the company was officially formed. While the specific systems and processes were developed uniquely for Auto Appraisal Network, the brand itself had not offered franchises in this or any other business before its formal launch. Auto Appraisal Network began granting franchises in January 2007, and since then, it has also operated three company-owned auto appraisal businesses.
Financial Overview
Investment Range
$16,700 - $44,275
Franchise Fee (Low)
$9,600
Franchise Fee (High)
$20,000
Minimum Cash Required
$3,000
Equipment Costs (High)
$2,000
Working Capital
$6,500
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financing Details
Auto Appraisal Network generally does not offer direct or indirect financing. However, the company may, at its sole discretion and under limited circumstances, provide a guarantee for a loan to a franchisee. If Auto Appraisal Network chooses to offer financing, it is specifically for the initial franchise fee. Franchisees may be able to finance up to 50% of this fee over a 5-year period, with an interest rate of up to 6%. There are monthly payments required, but no penalty for paying off the loan early. There is no security required for this financing, but if a franchisee defaults, Auto Appraisal Network would have liability and would incur a loss. Auto Appraisal Network does not offer financing for other expenses such as land, construction, leased space, equipment leasing or purchase, or opening inventory.
Performance Metrics
Total US Locations
23
Franchised Units
20
Corporate Units
3
Franchising Since
2007
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
Auto Appraisal Network has a clean legal history, with no lawsuits or legal disputes required to be reported in this section of the FDD.
Bankruptcy History
Auto Appraisal Network and its key personnel have no bankruptcy history, either in the U.S. or internationally, that needs to be reported in this document.
Agreement Terms
Initial Term
5 years
Renewal Term
5 years
Renewal Conditions
To renew their franchise with Auto Appraisal Network for additional 5-year terms, franchisees must meet several conditions. They need to give Auto Appraisal Network written notice of their intent to renew between 6 and 12 months before their current agreement ends. At the time of renewal, franchisees cannot have any overdue payments or outstanding obligations to Auto Appraisal Network, its affiliates, or approved suppliers, nor can they be in default of their franchise agreement. They must have also substantially followed all terms of their agreement throughout the previous term. Auto Appraisal Network requires franchisees to sign a mutual general release, which essentially means both parties agree to drop any claims against each other. Although the document lists a renewal fee of $0, franchisees will need to sign Auto Appraisal Network's then-current franchise agreement, which could have significantly different terms, including potentially higher or additional fees. Franchisees must also meet Auto Appraisal Network's current qualification and training requirements. If they operate from a leased commercial location, they must renovate and modernize the premises, including installing new equipment, signs, and decor, to match Auto Appraisal Network's current brand standards. They must also prove they have the right to remain at their business location for the new term and demonstrate sufficient financial resources to continue operating the franchise.
Training & Support Program
Franchisor Assistance
Auto Appraisal Network provides a variety of support to its franchisees to help them get started and run their businesses smoothly. Before a franchisee opens, Auto Appraisal Network provides guidelines for setting up the business, including suggestions for fixtures, furniture, and equipment. Auto Appraisal Network also provides a comprehensive 5-day online initial training program for the franchisee and one employee, covering everything from the business overview and field operations to using their proprietary software, marketing, and performing vehicle appraisals. While Auto Appraisal Network covers the training instruction and materials, franchisees are responsible for their own travel, lodging, and other expenses. Additional staff can be trained for a fee. Franchisees receive a confidential operations manual and a list of approved suppliers. Auto Appraisal Network recommends operating from a home-based office and does not require a commercial location. Each franchisee is also supplied with a laptop, digital camera, proprietary software, an email address, FTP network access, and a personalized webpage on the Auto Appraisal Network site. For ongoing support, Auto Appraisal Network reviews and approves all advertising and promotional materials that franchisees plan to use and offers advice on marketing, management, and general operations. They conduct inspections of the business and provide updated lists of designated suppliers. A crucial ongoing service is that Auto Appraisal Network reviews, processes, prints, binds, and certifies all appraisal reports submitted by franchisees before sending them directly to the customers. Franchisees are required to use the Auto Appraisal Network Extranet daily for managing client data, online document storage, and company communications. Auto Appraisal Network also offers additional training programs and refresher courses, with the cost of online instruction covered by the franchisor, though travel and on-site training fees are the franchisee's responsibility. Regarding advertising, Auto Appraisal Network mandates a minimum monthly spend on local advertising and networking, emphasizing face-to-face meetings with potential clients. While a National Ad Fund may be established in the future, it is currently not active. If created, franchisees would contribute monthly, and up to 50% of these contributions could be credited towards their local advertising requirements.
Initial Training Hours
39
Training Location
Online/virtual
Ongoing Support
After you open your Auto Appraisal Network business, the company provides several types of ongoing support to help you run your franchise: Ongoing Training: Auto Appraisal Network requires franchisees or their inspectors to attend refresher courses and other training programs annually. This training will not exceed one business day per inspector each year and is conducted online. Auto Appraisal Network covers the costs for these online training programs. Annual Conventions: You or your inspectors may also be required to attend an annual convention for the franchise system for up to three days each year. If these conventions are held online, Auto Appraisal Network pays the associated costs. If you request additional training at your own business location, Auto Appraisal Network may charge a daily fee, and you would need to cover travel, lodging, and food expenses for the trainers. Online Resources and Coaching: Auto Appraisal Network provides access to a proprietary Extranet system. This system is a central hub for database management, online document storage, internal company communications, and online operations manuals. It is also used for franchise-wide marketing, managing service fees, financial reporting, benchmarking, and provides ongoing 'franchise coaching' to help support your business operations.
Franchise Requirements
Ideal Candidate Profile
Auto Appraisal Network is looking for individuals who can effectively manage and operate a business focused on professional evaluation and inspection of automobiles, watercraft, and motorcycles. The ideal candidate should be comfortable with customer interaction and business development, as the role involves soliciting clients through car clubs, car shows, networking, and referrals, as well as working with insurance companies and financial institutions. While specific prior industry experience isn't explicitly required, candidates must be prepared to learn and apply Auto Appraisal Network's unique system, which includes proprietary software and detailed operational standards. Franchisees need to be capable of traveling to customer locations to perform inspections and collect payments directly. If the franchisee is an entity rather than an individual, one owner with at least a 10% interest must be designated as a 'Designated Principal' to oversee general management. If this Designated Principal does not take on the full-time daily operations, a qualified full-time general manager must be hired and approved by Auto Appraisal Network. The business model suggests a need for an organized, customer-focused individual who can effectively market services and manage mobile operations.
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Hybrid
Owner Participation
Supervisory
Territory Type
Exclusive
Territory Size Requirements
Auto Appraisal Network defines its franchise territories as exclusive Demographic Market Areas (DMAs). Each DMA must have a minimum population of 80,000 people and is based on U.S. Census Metropolitan and Micropolitan Statistical Areas. The physical size of a territory will be no larger than a state and no smaller than a county, parish, or independent city. Auto Appraisal Network commits to having only one franchisee per defined DMA. Franchisees must operate from one official location within their exclusive territory and need permission from Auto Appraisal Network to relocate.
Staffing Notes
Auto Appraisal Network allows for flexibility in staffing. If the franchisee, or the designated principal (an owner with at least a 10% interest if the franchisee is an entity), does not personally manage the business day-to-day, they must hire a full-time general manager. This manager needs to have qualifications that Auto Appraisal Network finds acceptable and must successfully complete the initial training program. Beyond the initial training provided for the franchisee and one additional person, Auto Appraisal Network offers training for additional sales staff, with an extra fee. Area Developers, by the time they are developing their third franchise, are expected to be able to train their own general managers and other managerial staff according to Auto Appraisal Network's standards. Overall, the franchisee is responsible for staffing their operation, which can include hiring a manager if they are not hands-on with daily tasks, while still retaining general oversight and management responsibilities.