Maaco has signed an agreement for a franchisee lending program with Franchise America Finance (FAF). The program is intended to stimulate growth by offering Maaco’s new and existing franchisees direct access to $15 million of development capital, the companies said.
New and existing Maaco franchisees will have access to up to $5 million in Small Business Association (SBA) lending for new unit growth, and the remaining $10 million will be available for the transfer of current centers to new owners or for current owners looking to refinance.
“By equipping current and prospective franchisees with the tools and resources needed for success, this collaboration will allow us to grow our franchise system exponentially,” said Dave Schaefers, senior vice president of franchise development for Maaco. “Additionally, it will help stimulate job growth and the economy by creating jobs at Maaco centers across the U.S.”
FAF has designated more than $200 million for franchisee financing for member franchise systems since the introduction of its franchise lending program in April 2010. The program provides custom lending solutions for franchisees that are part of excellent franchise systems.
“FAF worked with Maaco to create the qualifications prospective franchisees must meet in order to qualify to gain access to this available capital,” Ronald Feldman, CEO of FAF said. “We are thrilled to have the Maaco franchise system as a member of our franchise lending program.”
Maaco has nearly 500 franchised locations across North America and systemwide sales of nearly $500 million.
Maaco says it plans to continue to expand its presence in markets across the U.S., and growth projections call for approximately 165 additional new centers to be opened by 2014. Markets targeted for expansion include Baltimore, Buffalo, Chicago, Cleveland, Dallas, Los Angeles, Miami, New York, Phoenix, Pittsburgh and Rochester, N.Y.
Reduced franchise fees and discounted royalties are available for independent automotive businesses that enter Maaco’s conversion program. Maaco is also part of Driven Brands’ “Jump Start Program” for distressed automobile dealerships that gives them the opportunity to convert its various brands at deeply discounted fees while the dealerships utilize their existing facilities, equipment and staff to further reduce customary start-up costs.
The estimated initial investment for a Maaco repair center ranges from $300,000 to $400,000, including a $40,000 franchise fee. Maaco provides veterans with a 25 percent discount ($10,000) off its franchise fee through VetFran.
Franchise America Finance, LLC (FAF) was formed by a group of franchising professionals to address the void in the capital markets for franchising. FAF can provide senior and subordinated debt, mezzanine financing, and equity for franchisors and franchisees. Franchisors interested in participating in this program should contact Ronald Feldman or Nate Greenberg at (610) 668-9780.