Risk Score
Pending analysis
Investment Range
$226,774 - $580,818
Franchise Fee
$20,000
Total US Locations
724
Business Summary
Meineke offers franchises for the operation of Meineke automotive maintenance and repair centers. These centers specialize in servicing exhaust system components, brake system components, and providing various other automotive maintenance and repair services to the general public. Meineke also provides multi-unit development rights and a conversion program for existing independent or franchised repair facilities to operate as Meineke Car Care Centers.
Corporate History
Meineke Franchisor SPV LLC was organized in June 2015 as part of a securitization transaction, becoming the franchisor for Meineke Car Care Centers in the U.S. Before this, Meineke Car Care Centers, LLC (MCC) was the franchisor, originally incorporated in Texas in 1972. The broader corporate structure involves Meineke being an indirect, wholly-owned subsidiary of Driven Brands, Inc., which itself is ultimately majority-owned by private equity funds managed by Roark Capital Management, LLC. Driven Brands, Inc. became a publicly traded company in January 2021. Meineke is part of a large network of automotive and other franchise brands under the Driven Brands umbrella, including Maaco, Merlin, Econo Lube, CARSTAR, Take 5, and others.
Financial Overview
Investment Range
$226,774 - $580,818
Franchise Fee (Low)
$20,000
Franchise Fee (High)
$45,000
Minimum Net Worth
$1,000,000
Royalty %
7%
Marketing %
8%
Equipment Costs (Low)
$65,000
Equipment Costs (High)
$355,000
Working Capital
$62,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Meineke Franchisor SPV LLC's parent company, Driven Systems LLC, received an unqualified audit opinion on its financial statements and acts as the guarantor for Meineke's performance. Driven Systems LLC itself is part of a securitization structure that holds approximately $2 billion in debt, which is secured by its assets and guaranteed by its subsidiaries, including Meineke. Weekly cash flows exceeding expenses are remitted to Driven Holdings, LLC. Driven Brands, Inc., the indirect parent, also received an unqualified audit opinion and manages the Meineke system. Driven Brands, Inc. reports significant long-term debt through various Senior Notes but was in compliance with all debt covenants as of December 30, 2023. These financial statements are provided for disclosure only, as Driven Brands, Inc. does not guarantee Meineke's obligations.
Financing Details
Meineke Franchisor SPV LLC does not offer any direct or indirect financing options to its franchisees. Meineke also does not guarantee any notes, leases, or obligations for its franchisees.
Performance Metrics
Total US Locations
724
Franchised Units
724
Corporate Units
0
Avg Square Footage
5,200
Franchising Since
1972
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
14
Litigation Summary
Meineke Franchisor SPV LLC and its affiliates have been involved in several litigation cases, both recently and historically. Currently, Meineke has three ongoing cases filed in 2023. One is a securities class action against its indirect parent, Driven Brands Holdings Inc., and its CEO (who also serves as Meineke's CEO), alleging failure to disclose material adverse information following recent acquisitions. Another case involves Meineke and an affiliate suing a former franchisee for abandonment and unpaid fees, with the franchisee having filed counterclaims for alleged breaches related to leasing and remodeling funds; this case is ongoing. A third 2023 case saw Meineke successfully confirm an arbitration award against a former franchisee for amounts owed. Past concluded cases for Meineke include a 2018 lawsuit from a former franchisee alleging fraud and breach of contract, which was settled for $54,000. Meineke's predecessor was also found liable in a 2017 customer complaint for breach of warranty and unfair practices, with the judgment paid by the franchisee. A significant 2016 lawsuit from the Meineke Dealers Association regarding renewal rights and independence riders was settled in 2018. Additional historical cases involved franchisees alleging fraud and contract disputes, most of which were settled. An affiliate of Meineke, Take 5 Canada, is also defending a 2022 lawsuit from a former franchisee alleging breach of disclosure and fair dealing laws. Meineke's affiliate, Econo Lube N' Tune, Inc., was subject to a 2011 consent judgment with the State of Arizona regarding alleged unfair trade practices. Other affiliates, Arby's and Dunkin' Brands, settled multi-state actions in 2019 concerning "no-poaching" provisions, and Dunkin' Brands settled a 2019 NY lawsuit in 2020 regarding data breaches.
Bankruptcy History
Meineke Franchisor SPV LLC has no bankruptcy history to report.
Agreement Terms
Initial Term
15 years
Renewal Term
15 years
Renewal Conditions
To renew a Meineke franchise, franchisees must provide notice at least 180 days before their current agreement expires. The franchisee, their owners, and affiliates must be in compliance with all agreements with Meineke. Franchisees must also maintain possession of the premises for the entire term of the renewal, sign Meineke's then-current successor franchise agreement (which may have materially different terms except for certain provisions), remodel their center to meet current specifications and standards, pay a successor franchise fee of $5,000 (subject to CPI increase), and sign a general release (if allowed by state law).
Training & Support Program
Franchisor Assistance
Meineke Franchisor SPV LLC provides comprehensive assistance to its franchisees. Before opening, Meineke helps with site approval and provides an initial training program for the franchisee or operating partner and one other person, along with access to the confidential Operations Manual. Meineke also offers site location assistance, including a Project Resource Manual, real estate contacts, contractors, developers, financing sources, and site evaluation mapping. Ongoing support includes opportunities for retraining, periodic guidance through the Operations Manual, bulletins, and electronic communications, and consultations by telephone or in person. Meineke conducts regular on-site and virtual inspections, maintains a national customer warranty program, and administers the Meineke Advertising Fund. Meineke also consults with the Dealer Association Advisory Council on various matters relevant to fees, product changes, insurance, advertising, and chain expansion.
Initial Training Hours
76
Training Location
Meineke University training center in Charlotte, North Carolina, a designated Meineke Center, and/or virtually through its learning management system.
Ongoing Support
Meineke Franchisor SPV LLC provides ongoing assistance to its franchisees after opening. This includes opportunities for retraining in the initial training program at no charge, and training on new core products and services as they are added. Meineke offers periodic guidance through its Operations Manual, bulletins, weekly newsletters, and other written or electronic communications, along with consultations by telephone or in person. Franchisees can also access Internet training through the dealer website at no cost. Meineke conducts both on-site and virtual center inspections to evaluate operations and ensure compliance with the system. Additionally, Meineke maintains a national customer warranty program and administers the Meineke Advertising Fund for marketing efforts. Meineke consults with the Dealer Association Advisory Council on various matters relevant to franchisee relationships.
Franchise Requirements
Ideal Candidate Profile
Meineke Franchisor SPV LLC seeks qualified individuals or entities to operate its automotive maintenance and repair centers. Ideal candidates, or their designated Operating Partners, are expected to actively participate in the center's management, dedicating substantially all of their business time to on-premises operations. They must successfully complete Meineke's initial training program. While not explicitly stated as mandatory, the application process for resales indicates that candidates with prior experience in the automotive aftermarket, supervisory roles, or sales may be preferred. Multi-unit developers are required to hire a full-time managing director for their centers. Financially, at least one guarantor for multi-unit development must demonstrate a minimum net worth of $1,000,000.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Retail
Owner Participation
Hands-On
Territory Type
Protected
Territory Size Requirements
Meineke Franchisor SPV LLC defines single-unit franchise territories with a "Protected Area" of a two-mile radius around the premises. Additionally, Meineke will not grant other franchises within a three-mile radius without offering the existing franchisee a right of first refusal. Overall, Meineke limits itself to no more than one Meineke Center for every 50,000 registered motor vehicles in the Metropolitan Statistical Area. For multi-unit developers, territory size and boundaries are defined using county boundaries and vary based on market conditions, the number of centers committed, and demographics, with no minimum size specified.
Staffing Notes
Meineke Franchisor SPV LLC requires its franchisees to staff their centers at all times with a sufficient number of competent and properly trained employees. Franchisees are solely responsible for hiring and managing their staff, including determining employment terms, compensation, and training. The center manager must dedicate substantially all of their business time to on-premises management and operations. At least one employee at each Meineke Center must obtain and maintain Automotive Service Excellence (ASE) certification for the authorized services performed. For multi-unit developers, a managing director is required to devote full-time efforts to the management and supervision of centers within the development area. Performance metrics for staffing also suggest a minimum of three technicians, with four being ideal.