Risk Score
Pending analysis
Investment Range
$172,500 - $1,275,500
Franchise Fee
$20,000
Min Cash Required
$50,000
Total US Locations
377
Business Summary
Maaco operates automobile repair centers that specialize in vehicle painting and body repair. The centers operate under brand names such as "Maaco," "Maaco Collision Repair & Auto Painting," and "America's Bodyshop." These businesses serve the general public for their automobile repair needs.
Corporate History
Maaco Franchisor SPV LLC was established on June 9, 2015, as a Delaware limited liability company. It is the direct successor to a business founded by Anthony A. Martino in 1972, originally named Maaco Enterprises, Inc. (MEI). MEI began offering franchises for 'Maaco Auto Painting & Bodyworks' centers in February 1972. In March 2003, MEI updated its brand name to 'Maaco Collision Repair & Auto Painting' to broaden its market perception for bodywork services. In October 2008, MAACO Franchising, LLC (MAA) acquired most of MEI's assets. Following a major securitization financing transaction in July 2015, all existing U.S. franchise agreements were transferred to Maaco Franchisor SPV LLC, establishing it as the current franchisor. Maaco Franchisor SPV LLC is an indirect, wholly-owned subsidiary of Driven Brands, Inc.
Financial Overview
Investment Range
$172,500 - $1,275,500
Franchise Fee (Low)
$20,000
Franchise Fee (High)
$45,000
Minimum Cash Required
$50,000
Minimum Net Worth
$1,000,000
Royalty %
8%
Equipment Costs (Low)
$40,000
Equipment Costs (High)
$1,107,000
Working Capital
$62,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Maaco's financial statements are consolidated with its parent company, Driven Systems LLC, and indirect parent, Driven Brands, Inc. The auditors have issued an unqualified opinion, indicating the financial statements are presented fairly. There are no going concern qualifications noted. Maaco, as an indirect subsidiary of Driven Brands, Inc., guarantees the indebtedness incurred through various secured financing transactions. Driven Brands and its subsidiaries are subject to debt service coverage and leverage ratio covenants related to these transactions, and as of December 30, 2023, Driven Brands was in compliance with these covenants. The financial health is tied to this larger corporate structure, which is heavily leveraged with debt but has met its obligations.
Financing Details
Maaco does not offer any direct or indirect financing to franchisees. It also does not guarantee any notes, leases, or other obligations for franchisees.
Performance Metrics
Total US Locations
377
Franchised Units
377
Corporate Units
0
Avg Square Footage
8,600
Franchising Since
1972
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
11
Litigation Summary
Maaco Franchisor SPV LLC has been involved in several legal disputes. In July 2023, Maaco settled a lawsuit against a former franchisee for unpaid amounts and operating a competitive business. In April 2023, Maaco settled a case with a multi-unit franchisee who alleged fraudulent inducement and franchise law violations; the franchisee paid Maaco $5.5 million in exchange for franchise terminations. In December 2023, Jonathan G. Fitzpatrick (Manager and CEO of Maaco and its parent) was named in a pending securities class action against Driven Brands Holdings Inc. alleging misrepresentations regarding acquisitions. Historically, in September 2019, six Maaco franchisees in California sued Maaco and affiliates for alleged breach of contract, unfair dealing, and misuse of advertising fees, which was settled in May 2021 for $100,000. In September 2015, a former franchisee sued Maaco for inadequate support, leading to a mutual settlement in December 2016. Maaco's affiliate, Take 5 Canada SPV LP, is currently defending a lawsuit filed in December 2022 by a former Canadian franchisee alleging disclosure breaches. Another affiliate, Maaco Canada Partnership, LP, settled a lawsuit in November 2022 that found a breach of disclosure obligations. Additionally, an affiliate, Econo Lube N' Tune, Inc., entered into a consent judgment with the State of Arizona in October 2011 concerning unfair trade practices. Other affiliates within the broader Driven Brands family have also resolved actions related to 'no-poaching' clauses and cyberattacks, although these do not directly impact Maaco.
Bankruptcy History
Maaco has no bankruptcy history to disclose in this FDD. Item 4 states that no bankruptcy is required to be disclosed.
Agreement Terms
Initial Term
15 years
Renewal Term
15 years
Renewal Conditions
To renew their Maaco franchise, franchisees must provide written notice between 6 and 12 months before the initial agreement ends. They must have paid all outstanding amounts to Maaco and its affiliates and be in full compliance with their franchise agreement. Franchisees are required to sign Maaco's then-current franchise agreement, which may include different terms such as a higher royalty fee and marketing fee. They must also execute a general release (if allowed by state law), pay a $2,500 renewal fee, provide a current lease for the center's location with a term at least equal to the renewal term, and provide an assignment of leasehold interest upon termination or expiration of any renewal term. Additionally, franchisees must refurbish the center to meet current Maaco image and operational standards, including installing updated merchandising systems, exterior signage, trade dress, performing general cleaning and repairs, servicing equipment, and replacing obsolete equipment.
Training & Support Program
Franchisor Assistance
Before a franchisee opens a Maaco Center, Maaco helps by designating the appropriate development area and providing site specifications. It also provides an initial advertising contribution for grand opening marketing and offers access to its confidential operations manual, the 'Playbook.' Comprehensive initial training is provided to the franchisee or principal operator. For those signing an Area Development Agreement, Maaco reviews and approves proposed site applications and leases. After opening, Maaco provides ongoing advisory assistance for the center's operation. It manages and uses marketing fees for advertising and promotional programs. Maaco also conducts inspections and evaluations of the repair services. Franchisees may be required to attend additional training programs, sales meetings, and conventions periodically. Maaco also develops and maintains brand websites and social media platforms.
Initial Training Hours
111
Training Location
Charlotte, North Carolina
Ongoing Support
After opening, Maaco franchisees receive ongoing advisory assistance for operating their centers. Maaco manages marketing fees for advertising and promotion, and conducts regular inspections and evaluations of the auto painting and body repair services. Franchisees may also be required to attend supplemental training programs, sales meetings, operations meetings, advertising meetings, and conventions. Maaco also provides and maintains websites and social media sites for the brand.
Franchise Requirements
Ideal Candidate Profile
Maaco seeks franchisees who are committed to full-time, hands-on management. The franchisee or the approved principal operator must dedicate their full time, energy, and efforts to managing and supervising the Maaco Center. They are required to successfully complete the initial training program. For franchisees structured as entities, each direct and indirect owner must sign a personal guaranty for the franchise's obligations. For area developers, a dedicated managing director is required to oversee multiple centers within the development area. This indicates a preference for actively involved operators with strong financial backing and commitment to business oversight.
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
full-time
Territory Type
limited
Territory Size Requirements
Maaco does not grant an exclusive territory. However, for a single Maaco Center, the franchisor will not grant a license to a third party to establish another Maaco Center within the Core Based Statistical Area (CBSA) if it would result in more than one Maaco Center for every 50,000 people in that CBSA, provided the franchisee is in compliance with their agreement. For Area Development Agreements, development areas vary based on market conditions, the number of centers committed, demographics, and site availability, with boundaries defined by county lines, but no specific minimum size is set.
Staffing Notes
Maaco requires the franchisee, or an approved principal operator, to dedicate full-time effort to the management and supervision of the Maaco Center. This individual must successfully complete the initial training program. If the franchisee will not be involved in the day-to-day operations, a designated principal operator is required to attend the three-week initial training program, while the franchisee (or majority investor) has the option to attend a one-week intensive training. For Area Development Agreements, a managing director, subject to Maaco's approval, must be hired and trained to oversee centers within the development area. Maaco also establishes mandatory standards for minimum staffing levels for its centers, which include the presence of district managers as outlined in the Playbook. However, Maaco clarifies that it does not dictate or control labor or employment matters for its franchisees' employees, such as selection, training, wages, or working conditions.