Quality Tune-Up Shops Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$234,000 - $282,750
Franchise Fee
$12,500
Min Cash Required
$50,000
Total US Locations
6
Business Summary
Quality Tune-Up Shops offers a system and method for promoting and operating a retail automotive center. This business provides services such as tune-ups, lube, oil and filter changes, smog-related services, and other specific automotive repair products and services. The Quality Tune-Up Shops system includes a marketing system, business organization, and guidelines for repairing and servicing new and used automobiles.
Corporate History
Quality Tune-Up Shops' predecessor, QT Express, Inc., was incorporated in California in November 1986 and continuously operated as a franchisor of Quality Tune-Up Shops until 2004. In August 2004, Tom McVey 2004 Quality Tune-Up Shops, LLC (TM, LLC) was formed in Delaware and acquired a portion of the California franchisee businesses from QT Express, Inc. Tom McVey, the managing member, has been involved with the Quality Tune-Up Shops business for over 39 years and has served as a franchisor for twenty years through TM, LLC.
Financial Overview
Investment Range
$234,000 - $282,750
Franchise Fee (Low)
$12,500
Franchise Fee (High)
$25,000
Minimum Cash Required
$50,000
Royalty %
10%
Marketing %
10%
Equipment Costs (Low)
$70,000
Equipment Costs (High)
$85,000
Working Capital
$25,000
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
The financial statements for Quality Tune-Up Shops (TM, LLC) indicate a concerning financial position as of December 31, 2023. The company has negative working capital, with current assets of $60,442 significantly lower than current liabilities of $308,045. Additionally, member's equity has substantially decreased to $32,535 in 2023, down from $106,255 in 2021. The company also carries a very large lease liability, totaling over $1.4 million. Despite these indicators, the independent auditors have provided an unqualified opinion on the financial statements, meaning they present fairly in all material respects.
Financing Details
Quality Tune-Up Shops offers direct financing only for the initial franchise fee. Franchisees can request to pay the initial fee in installments, requiring an upfront payment of $10,000 at the time of signing the Franchise Agreement, with the remaining balance paid in monthly installments over a period not exceeding twelve months. This installment plan includes an interest rate of 2.5% above the Bank of America's prime rate. Quality Tune-Up Shops does not offer any other financing arrangements directly or indirectly for the acquisition or operation of a Quality Tune-Up Shops franchise.
Performance Metrics
Total US Locations
6
Franchised Units
6
Corporate Units
0
Avg Square Footage
2,000
Franchising Since
1986
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
Quality Tune-Up Shops has no litigation or administrative proceedings to report, according to its Franchise Disclosure Document. The company states there are no cases or legal actions that it is required to disclose.
Bankruptcy History
Quality Tune-Up Shops reports no bankruptcy history for itself or its key personnel. No individuals identified in the FDD, nor the franchisor, have been involved in any bankruptcy proceedings that are required to be disclosed.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their franchise for an additional ten-year term, Quality Tune-Up Shops franchisees must provide written notice at least 90 days before the current term ends. They must be in good standing, not be in default of any material terms, satisfy all monetary obligations to Quality Tune-Up Shops, and have consistently complied with all operating standards. Franchisees are also required to sign the then-current Franchise Agreement, pay a renewal fee equal to one percent of their aggregate gross revenues from the prior twelve-month period, and execute a general release of liability in favor of Quality Tune-Up Shops.
Training & Support Program
Franchisor Assistance
Before opening, Quality Tune-Up Shops assists franchisees with approving their location, negotiating the protected territory, and (if Quality Tune-Up Shops is the lessor) executing a sublease agreement. The franchisor provides computer hardware and software, initial inventory specifications, and remodeling/equipping guidelines. On-site assistance and guidance are offered during the opening phase, along with a copy of the Operations Manual. After opening, Quality Tune-Up Shops provides support for the grand opening during the first 90 days and offers additional assistance when deemed necessary or requested. The franchisor also makes modifications to the system, maintains the brand's reputation and marks, and provides ongoing training and support, including sponsoring meetings and refresher training. Quality Tune-Up Shops arranges and contracts for joint advertising and provides administrative and accounting services through a designated provider. The franchisor retains the sole right to market on the Internet.
Initial Training Hours
144
Training Location
Franchisee's business location
Ongoing Support
After the initial 90-day grand opening support, Quality Tune-Up Shops provides additional assistance as deemed necessary or upon franchisee request. The franchisor offers ongoing training and support, including sponsoring franchisee meetings, conferences, and refresher training as appropriate. Additionally, Quality Tune-Up Shops mandates the use of a designated bookkeeping service for administrative and accounting services, which is provided at a monthly charge. The franchisor also makes modifications to the QTS System as needed.
Franchise Requirements
Ideal Candidate Profile
Quality Tune-Up Shops seeks franchisees who have specific experience and are willing to be highly involved in the business. Ideal candidates must have been employed full-time in a Quality Tune-Up Shops business for at least six months, or longer at the franchisor's discretion. Additionally, they need a minimum of two years of prior experience in owning and/or managing a business that the franchisor determines qualifies them to operate the franchise. Franchisees, if individual owners, must actively supervise and participate in the business at the shop location on a full-time, hands-on basis, devoting substantial time and best efforts to management and operation.
Industry Experience Required
Yes
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Min Years Experience
2
Operational Details
Location Type
retail
Owner Participation
full-time
Territory Type
protected
Territory Size Requirements
Quality Tune-Up Shops grants franchisees a Protected Territory defined as a one-mile radius measured from their approved business location. This specific area is further designated on Exhibit A to the Franchise Agreement.
Staffing Notes
Quality Tune-Up Shops requires franchisees to maintain an adequate number of neat, clean, competent, and courteous employees to ensure the proper operation of the franchise. Franchisees are expected to use experienced mechanics and must ensure all personnel, particularly those in management positions, meet specific experience requirements. Employees are required to wear designated uniform work clothing, maintain it cleanly, and adhere to dress code standards. Franchisees must inform Quality Tune-Up Shops in writing about all employees, including their names, contact information, positions, responsibilities, and any licenses held, such as Smog Check Station and Technician Licenses. Franchisees must use experienced mechanics to service vehicles.