Risk Score
Pending analysis
Investment Range
$268,700 - $596,500
Franchise Fee
$35,000
Total US Locations
4
Business Summary
Wheelmaxx Off Road and Auto Repair operates a business that offers automotive services to the general public. These services include repairs, maintenance, lube and oil changes, and vehicle customization through rims, tires, and suspensions. Some Wheelmaxx locations may also sell retail vehicles.
Corporate History
Wheelmaxx Inc. was organized in California on February 1, 2019. Before its formation, a predecessor company, West Coast Tires & Auto Center, LLC ("West Coast"), operated six similar automotive businesses starting in 2013, although West Coast never franchised. Wheelmaxx Inc. is focused on providing automotive services for passenger and commercial vehicles, including repairs, maintenance, lube and oil changes, and customization services. The company began offering franchises as its first line of business and sold its first Wheelmaxx franchise in January 2021.
Financial Overview
Investment Range
$268,700 - $596,500
Franchise Fee (Low)
$35,000
Franchise Fee (High)
$35,000
Royalty %
5%
Marketing %
2%
Equipment Costs (Low)
$155,000
Equipment Costs (High)
$432,500
Working Capital
$16,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Wheelmaxx's financial statements for 2023 and 2022 received an unqualified audit opinion, indicating fair presentation. However, several factors shed light on Wheelmaxx's financial health. In 2023, the company invested $554,371 to acquire land for a new auto repair facility, with plans for an additional $300,000 in construction costs. A $200,000 loan for this land is due in May 2024, and Wheelmaxx is actively seeking long-term financing to replace it. The company experienced a significant drop in cash and cash equivalents, from $119,425 in 2022 to $22,330 in 2023, and a similar decrease in total current assets. Total liabilities increased, largely due to new short-term and long-term notes payable, including one to a related party. Furthermore, Wheelmaxx has a pending breach of contract case with a Fremont franchisee, leading it to defer recognizing revenue from that franchise due to the ongoing uncertainty, although management does not anticipate an impairment loss on the related lease asset. Since January 2021, Wheelmaxx's primary business activity has shifted from operating repair shops to solely focusing on selling new franchises.
Financing Details
Wheelmaxx is an approved Small Business Administration (SBA) company and will help franchisees use SBA financing if needed. Franchisees who wish to pursue SBA-assisted financing will need to use SBA Form 2462.
Performance Metrics
Total US Locations
4
Franchised Units
2
Corporate Units
2
Franchising Since
2021
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
2
Litigation Summary
Wheelmaxx has two significant legal matters disclosed. One is an ongoing federal lawsuit filed in November 2022 against former franchisees, Maraaj Singh Mahal and American Tire & Auto Repair Center, Inc., for breach of contract, trademark infringement, and unfair competition. Wheelmaxx is seeking termination of the Franchise Agreement, injunctive relief, and damages. Default judgments have been entered against both defendants, with findings and recommendations for Wheelmaxx's motion for default judgment filed in March 2024. The second matter is a Consent Order entered in October 2021 with the California Commissioner of Financial Protection and Innovation. This order required Wheelmaxx to stop violating the Franchise Investment Law and to offer cancellation and refunds of initial franchise fees and deposits to designated franchisees.
Bankruptcy History
Wheelmaxx has no bankruptcy history to report for itself or its key personnel.
Agreement Terms
Initial Term
10 years
Renewal Term
5 years
Renewal Conditions
To renew, Wheelmaxx franchisees must be in good standing with Wheelmaxx and its affiliates, meaning they must be current on all fees and charges, have not made more than two late payments with written notice in the last three years, and have not been in material breach of the agreement. Franchisees must also comply with operating standards, pay a renewal fee of up to two-thirds of the then-current Initial Fee, and sign Wheelmaxx's then-current franchise agreement, which may have different terms, including territorial boundaries and economic obligations. They must maintain possession of the approved premises, remodel or refurbish the location and equipment to meet current brand image and specifications, and provide Wheelmaxx with written notice of their intent to renew between thirteen and eighteen months before their agreement expires. Additionally, franchisees must not have engaged in any unethical or dishonest business dealings during the preceding term.
Training & Support Program
Franchisor Assistance
Wheelmaxx Inc. offers several forms of assistance to its franchisees. Before opening, Wheelmaxx licenses the use of its marks and system, designates the franchisee's territory, and assists with reviewing and approving the business premises. They help decorate the premises and, in some cases, offer franchises on a fully equipped basis where the franchisee purchases equipment from Wheelmaxx at a reasonable profit. Wheelmaxx loans operations manuals and requires franchisees to purchase and maintain a computer system, including point-of-sale software and hardware. Initial training, included in the Initial Fee for up to three people (franchisee, technician, and one manager), covers various subjects like orientation, new office development, service overview, operations, computer systems, sales, marketing, advertising, people management, and vendor introductions, conducted at a designated Wheelmaxx location. After opening, Wheelmaxx manages marketing fees and funds received from vendor rebates and discounts, providing periodic accountings. They also provide periodic training programs for managers and certain other employees at a regular charge.
Initial Training Hours
80
Training Location
Any Wheelmaxx location designated by Wheelmaxx Inc.
Ongoing Support
After opening, Wheelmaxx Inc. provides ongoing support by protecting and defending its trademarks and system. It loans operations manuals, which are regularly updated, and manages all aspects of the marketing program using collected marketing fees and funds from vendor rebates and discounts. Wheelmaxx provides periodic training programs for the franchisee's managers and certain other employees, for which the franchisee pays a regular charge.
Franchise Requirements
Ideal Candidate Profile
Wheelmaxx Inc. is seeking franchisees who are either individuals committed to directly supervising the business full-time on-site, or corporations where an owner holding at least a one-third equity share performs direct, on-site supervision. If management is delegated, the manager must successfully complete Wheelmaxx's initial training program. Franchisees must ensure that at least two full-time individuals work in the business; one serving as the business operations and management lead (which can be the franchisee), and the other as an Automotive Service Excellence (ASE) Certified Technician in at least two 'A' series areas, possessing a minimum of two years of related industry experience. All individuals with access to trade secrets, including managers and employees, must sign confidentiality agreements.
Industry Experience Required
No
Management Experience Required
Yes
Sales Experience Required
No
Technical Skills Required
No
Min Years Experience
2
Operational Details
Location Type
retail
Owner Participation
hands-on
Territory Type
limited
Staff Count
2
Territory Size Requirements
Wheelmaxx franchisees are granted a geographic territory, though the document notes that an exclusive territory is not received, and franchisees may face competition from company-owned outlets or other channels. The specific territory is described in Exhibit B of the Franchise Agreement, which is not provided with numerical details in this document. The franchisor considers various factors when defining the original size and boundaries of a territory, including the number of people living within the logical market area, the number and size of competitors, traffic patterns, competitive situation, natural determinants, and economic data. The franchisor has the option to modify the boundaries and size of a territory if its population increases by fifty percent or more from the estimated population at the time the agreement is signed. Wheelmaxx may permit franchisees to acquire expansion territory, which is adjacent territory not assigned to another franchisee, at a price of $0.10 per person based on governmental demographic data. For New York franchisees, the marketing area specifically will contain a population of not less than 25,000 people.
Staffing Notes
Wheelmaxx Inc. requires each franchised location to have a minimum of two full-time individuals. One person is responsible for business operations and management, which can be the franchisee. The second required staff member must be an Automotive Service Excellence (ASE) Certified Technician in at least two "A" series areas, and must possess a minimum of two years of related industry experience. Both the franchisee (or their designated manager) and the technician must successfully complete Wheelmaxx's initial training program. Any manager or employee with access to Wheelmaxx's trade secrets must also sign a confidentiality agreement.