Risk Score
Pending analysis
Investment Range
$270,998 - $1,013,194
Total US Locations
180
Business Summary
LINE-X LLC offers a franchise to operate a business specializing in vehicle upfit services. These services include providing aftermarket vehicle accessories, enhancements, or improvements to existing vehicles. This involves offering a set of core services and products as outlined in LINE-X's Confidential Operations Manual, such as the sale and application of LINE-X brand spray-on coatings, as well as the sale and installation of LINE-X branded products and other vehicle accessories and improvements.
Corporate History
LINE-X LLC was formed in Delaware on June 7, 2012, and officially became the franchisor of the LINE-X brand on August 31, 2021. The brand's origins trace back to an earlier predecessor, LINE-X Franchise Development Corporation (LFDC), which was incorporated in California in March 1999 and began offering LINE-X franchises in April 1999. Over the years, the ownership and structure of the LINE-X brand evolved through a series of mergers and acquisitions involving various entities, including LFDC Holdings, Inc., LINE-X Acquisition LLC, and LXAPC ACQUISITION LLC. Eventually, LINE-X LLC acquired all of the LINE-X intellectual property assets on June 7, 2012. LINE-X LLC is currently a wholly-owned subsidiary of LINE-X Holdings, LLC, which is part of a larger group of entities affiliated with Clearlake Capital Group, L.P.
Financial Overview
Investment Range
$270,998 - $1,013,194
Franchise Fee (High)
$40,000
Royalty %
6%
Marketing %
1.5%
Equipment Costs (Low)
$114,047
Equipment Costs (High)
$513,648
Working Capital
$62,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
LINE-X LLC has received an unqualified audit opinion for its financial statements, indicating they are presented fairly. However, the company experienced a net loss of approximately $1.98 million in 2024, a notable shift from net incomes of $2.7 million in 2023 and $6.3 million in 2022. This change is linked to a significant restructuring initiated in 2024, which involved transitioning to a sales-based royalty model and a fundamental reorganization of its business. This transition led to a substantial decrease in the number of franchise outlets, from 420 in 2023 to 268 in 2024, and related restructuring expenses. Despite these changes, LINE-X LLC maintains positive working capital, with current assets exceeding current liabilities. The company is also a named guarantor in a lending arrangement of its ultimate parent, pledging all its assets as collateral.
Financing Details
LINE-X does not offer any direct or indirect financing to its franchisees for any amount due under the Franchise Agreement or Development Agreement. LINE-X also does not guarantee any franchisee's notes, leases, or other financial obligations, nor does it receive any payment or other consideration for helping to arrange third-party financing.
Performance Metrics
Total US Locations
180
Franchised Units
180
Corporate Units
0
Franchising Since
1999
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
21
Litigation Summary
LINE-X has been involved in numerous legal disputes, with 21 cases identified in its recent history. Currently, LINE-X is defending against 11 arbitration actions initiated by franchisees in late 2023 and early 2024. These cases largely revolve around challenges to the enforceability of non-compete clauses in the franchisees' agreements. In turn, LINE-X has initiated 8 arbitration cases against current or former franchisees since mid-2022. These lawsuits primarily allege trademark infringement, unfair competition, and breaches of the franchise agreement related to non-compete and non-solicit provisions, purchasing obligations, and post-termination duties. Some of these franchisor-initiated cases have resulted in interim injunctions, and at least one has been settled with specific terms. Additionally, LINE-X Canada Ltd., an affiliate, was involved in an arbitration case filed in October 2022 against former franchisees, which concluded in August 2024. The arbitrator in that case found the non-compete provision unenforceable but ordered the cessation of trademark use. Most recently, in November 2024, LINE-X agreed to a consent order with the Washington State Department of Financial Institutions concerning certain communications being deemed 'offers' under state law.
Bankruptcy History
LINE-X has no bankruptcy history to report.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their franchise, LINE-X franchisees must meet several conditions. They must be in full compliance with all terms of the Franchise Agreement, be in good standing (meaning not in default), and bring their franchised business into compliance with LINE-X's then-current standards. Franchisees are also required to meet current qualification and training requirements, provide LINE-X with written notice of their intent to renew between 6 and 12 months before the agreement expires, and pay a renewal fee of $2,500. Additionally, they must sign LINE-X's then-current form of Franchise Agreement, which may contain terms and conditions that are materially different from their original agreement, and execute a general release of claims.
Training & Support Program
Franchisor Assistance
LINE-X provides pre-opening assistance, including initial training for the franchisee and one other person, and electronic access to its confidential operations manual. It also grants a license to use its trademarks and authorizes the opening of the LINE-X store. For ongoing support, LINE-X specifies or approves certain equipment, inventory, and suppliers. It may provide additional or refresher training programs, including national and regional conferences, conventions, and meetings to help improve operations. If a franchisee fails to maintain required insurance, LINE-X may procure coverage and charge the cost back to the franchisee. LINE-X maintains and administers a national Marketing Fund, directing all marketing programs and reviewing and approving franchisee marketing materials. It also offers consultation and advice on administrative and operating issues, but does not assist in establishing prices or setting minimum or maximum prices for the franchisee's products or services.
Initial Training Hours
124
Training Location
Franchise Support Center in Charlotte, North Carolina; Training Facility in Lebanon, Tennessee; and the franchisee's business location.
Ongoing Support
After opening, LINE-X franchisees receive ongoing support including specifications and approvals for equipment, inventory, and suppliers. LINE-X may provide additional or refresher training programs, national and regional conferences, conventions, and meetings to help enhance operations. It also manages the Marketing Fund for brand promotion and may implement programs for customer satisfaction audits and quality control. Franchisees can consult with LINE-X for advice on administrative and operating issues. Franchisees are required to attend these additional training programs and meetings as LINE-X deems necessary.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Retail
Owner Participation
full-time
Territory Type
limited
Staff Count
5
Territory Size Requirements
LINE-X defines its franchise territories using a map and/or identifiers like zip codes, coordinates, street addresses, or area codes. The size and boundaries are determined by LINE-X using its sole discretion, based on factors such as the number of households, potential customer population, population density, drive times from the location, natural and manmade boundaries, and the number of vehicle dealerships and new truck sales within the specified area. LINE-X may also apply other reasonable criteria.
Staffing Notes
LINE-X requires the owner to personally manage the LINE-X Store full-time for the first twelve months of operation, and strongly recommends this level of on-site management for the entire franchise term. If an owner operates multiple LINE-X Stores, they may designate a full-time manager for any additional store, provided that manager successfully completes LINE-X's required initial training program. It is also a requirement that a trained and qualified spray technician is always present at the store during operational hours.