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Week 13: Costa Oil & Spiffy

www.franchisebreakdowns.com

Week 13: Costa Oil & Spiffy

Mobile car washing franchise + an oil change brand

Oct 25, 2021
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Week 13: Costa Oil & Spiffy

www.franchisebreakdowns.com

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To Franchise Owners,

Hello again and welcome to Week 13 of Franchise Breakdowns! Below I’m covering 2 franchises in the auto industry, one an oil change franchise, and the other a mobile car washing franchise.

When I am digging through the financials of franchises, I am always looking for brands that demonstrate a ā€œgoodā€ return relative to the initial investment they outline. Unfortunately a lot of brands don’t include any performance data financial, as it’s not actually a requirement.

My goal is to provide analysis on the brands that do include performance data - ideally down to the net income of franchisees. In the absence of that, I’ll look for revenue that is massive compared to the initial investment. My starting point for a ā€œgood returnā€ is a revenue to investment ratio of 2:1, or an investment to net profit ratio of 3:1.

Of today’s brands, Costa Oil shows the potential for the 3:1 ratio , while Spiffy’s easily surpasses the 2:1 revenue ratio. Let’s get to it!


DISCLAIMER: DO NOT CONSIDER ANYTHING WRITTEN BELOW AS INVESTMENT ADVICE. IF YOU DECIDE TO PURCHASE A FRANCHISE, YOU MUST DO YOUR OWN RESEARCH, AND REALIZE ANY INVESTMENT MAY GO TO $0.00.


Costa Oil

Costa Oil Franchise Information: 2021 Cost, Fees and Facts - Opportunity  for Sale

Fast Facts

Background

  • Founded in 2017, franchising since October 2020

  • 13 corporate location as of 2020, zero franchised

  • Provides 10 minute oil changes with speed & quality

Fees + Investment

  • Royalty: 6.5% of gross sales

  • Brand Fund: 2% of gross sales

  • Franchise Fee: $54,900

  • Initial Investment: $128,250 - $196,900

Financial Performance

  • The following table contains financial performance data from 4 existing affiliate outlets that are standalone locations, open for the full year 2020, and have a total operating time of longer than 24 months

The Wolf’s Take šŸŸĀ 

After subtracting the royalty/brand fees from the net income, you’re left with a pretty healthy return given that the investment is a little below $200k on the high end. This brand (like most) would be a multi-unit play to achieve some serious cash flow through scale, but there’s no doubt that the affiliate locations are performing well.

A question to consider is of the longevity of a model that depends on oil changes given the rise of electric vehicles.

Recent Press

  • Could not find recent press, but here is their website: https://costaoils.com/franchising/


Twitter Watch šŸ‘€

My thread on why successful franchise owners decided to buy franchises instead of start their own businesses, or acquire existing small businesses:

Twitter avatar for @franchisewolf
The Wolf of Franchises šŸŸ @franchisewolf
People love dunking on franchises as a path in entrepreneurship "They take all your profits..true builders build..it’s buying a job"..the list goes on Here's 7 reasons I've heard from franchisees making $1M+/year on why they bought franchises & didn’t start or acquire SMB'sšŸ‘‡
5:06 PM āˆ™ Oct 21, 2021
45Likes7Retweets

https://twitter.com/franchisewolf


Spiffy

Car Wash Operator, ChannelAdvisor CEO Launches Spiffy App for Mobile Car  Washes

Fast Facts

Background

  • Founded in 2014, franchising since 2020

  • 24 company owned locations, 8 franchised as of 2021

  • Schedule a cleaning via their website or app, and they come to you to clean your car

Fees + Investment

  • Royalty: 7% of gross sales

  • Brand Fund: 2% of gross sales

  • Franchise Fee: $40,000

  • Initial Investment: $91,300 - $149,150

Financial Performance

  • The table below represents performance data from 17 existing affiliate outlets. Note that all 17 reporting units have been operating for longer than 1 year, but only two have been operating for 6+ years

The Wolf’s Take šŸŸĀ 

By year 2, the average affiliate was producing gross revenue 3x times the initial investment, and 6x by year four!

Of course there are various costs to consider (I’d guess labor i.e. your employees who wash the cars would be an expensive line item), but this is an interesting business model that could capture demand from the growing number of consumers who value convenience over affordability.

Recent Press

  • Mobile Car Wash Market To See Massive Growth by 2026


That’s it for this week’sĀ Franchise Breakdowns. Feel free to reply with any questions or feedback, or leave a comment. If someone sent this your way and you haven’t subscribed yet, you can also do that below. Thanks and see you next week!

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NOTICE REGARDING FRANCHISE INFORMATION

The Wolf of Franchises does NOT guarantee the financial performance of any franchise mentioned. The decision to purchase a licensed affiliate or franchise must be based on your own independent research. The Wolf of Franchises is not liable for any representation made by an affiliate, associate, marketing material, or Franchise Disclosure Document of a franchise with respect to real estate, financial, operations, or marketing performance of the business being acquired.

This information is not intended as an offer to sell, or the solicitation of an offer to buy, a franchise. It is for informational purposes only, and any financial data and/or projections is clearly based upon information provided by franchises in their respective Franchise Disclosure Document. The offer of a franchise can only be made through the delivery of a franchise disclosure document, from a certified seller of the brand, which The Wolf of Franchises makes no claim to be. Do not consider any information here as a guarantee of financial performance. The Wolf of Franchises has no affiliation or relationship of any kind with any of the brands covered in this newsletter, but simply provides data that is publicly available online or in Franchise Disclosure Documents.

All data from Franchise Disclosure Document’s is based on past performance, and if you were to purchase a franchise covered in the Wolf of Franchises newsletter, it is entirely possible that you lose your entire investment and go bankrupt.

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Week 13: Costa Oil & Spiffy

www.franchisebreakdowns.com
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