Ace Hardware Franchise Cost, Owner Salary & Profit 2024

Ace Hardware is one of the most recognizable names in hardware stores, and for a good reason.

As the world’s largest hardware retail cooperative, Ace has over 5,000 locations across all 50 states and 60 countries.

With a name like that behind it, opening an Ace Hardware franchise can be highly lucrative for business owners looking to capitalize on its popularity.

It is one of the 10 best handyman franchises that you must own. After conducting thorough research on the market, it is founded that this franchise opportunity is so excellent that it is also one of the best franchises that one must own. 

So, does Ace Hardware offer franchising, and if so, what are the requirements?

In this article, we’ll cover everything you need to know about Ace Hardware franchise opportunities, including the costs and requirements for opening a franchise, what you can expect in terms of training and support from Ace and more.

Ace Hardware Franchise

About Ace Hardware

Ace Hardware is the world’s largest hardware retail cooperative and a globally-recognized brand.

Ace Hardware provides customers with an extensive selection of products, ranging from home improvement materials to lawn and garden supplies.

Ace stores offer various lawn, paint, and hardware services, as well as seasonal products like grills, patio furniture, and more.

They are committed to helping local entrepreneurs; the majority of Ace stores are independently owned by small business owners who receive training and support from the Ace corporate team.

These owners benefit from a range of services such as marketing guidance, purchasing power, product selection assistance, store development consultation, and more.

Ace Hardware has made a name for itself by providing customers with a personalized shopping experience and helpful advice.

The company focuses on building relationships with customers rather than just completing transactions.


History Of Ace Hardware Franchise

History Of Ace Hardware Franchise

In 1928, Ace Stores was officially incorporated, opening the first company warehouse the following year.

In 1931, the company changed its name to Ace Hardware Corporation.

In 1973, founder and longtime president Richard Hesse retired and sold the chain of stores to its retailers.

The stores were restructured as a cooperative, allowing them to have greater control over what they sold and more autonomy in their business decisions.

By 1985, Ace Hardware had surpassed $1 billion in wholesale sales and had become an international powerhouse. In 2015, Ace Hardware reported annual sales of over $5 billion.

Today, Ace Hardware continues to provide top-quality products and services, helpful advice, and personal service that sets it apart from other big box hardware stores.

With over 5,000 locations worldwide, it is one of the most recognizable names in hardware retailing.


Ace Hardware Franchise Model

Cost Or FeesAmount
Initial Investment$650,000–$1,000,000
FranchiseYES
Franchise FeeNone
Royalty FeeNone
Liquidity$250,000
Estimated Outlets5,500+

How Much Does It Cost To Open A Ace Hardware Franchise?

Ace Hardware has a unique business model for its franchises that sets it apart from other franchising opportunities.

Unlike many other franchise models, there are no franchise fees or royalty fees to worry about when opening an Ace Hardware store.

As the store and brand owner, you have full control over your business and what products you choose to sell. 

The total investment to open an Ace Hardware franchise can range from $650,000–$1,000,000.

This includes the purchase price of the property (if applicable), any renovations needed for the building, and stock for the store. 

In addition to these costs, potential owners must also have a minimum of $250,000 unencumbered cash and must demonstrate a net worth of at least $400,000 in order to qualify as a prospective franchisee

In terms of ongoing expenses associated with an Ace Hardware franchise, owners will be responsible for ongoing overhead costs such as rent or mortgage payments, employee salaries, utilities, and maintenance costs. 

Overall, opening an Ace Hardware franchise can be more expensive than some other types of franchises; however, it is important to remember that there are no recurring franchise fees or royalties associated with this type of business opportunity. 


Ace Hardware Franchise Revenue & Profit

On average, Ace Hardware Franchised stores generated $3,115,000 in yearly revenue.

Here’s a table showing average revenue per store on the basis of the store’s format:

Type of StoreRevenue
Convinience hardware store$883,183
Core hardware store$2,680,061
Super hardware store$4,593,871
Home centers$5,713,825
Contractor oriented supply$4,722,20

What Is The Salary Of Ace Hardware Franchise Owner?

There is not many details about the Ace Hardware franchise owner’s salary & profit margin.

However, if we assume a profit margin of 15% as per the industry average, then as per our estimate, an Ace Hardware franchise owner’s salary can be approximately $467,250 on average.

Financial OverviewPercentage of RevenueAmount ($)
Individual Franchise Annual Revenue100%3115000.00
Rent10.63%(330968.75)
Insurance5.31%(165484.38)
Salaries21.25%(661937.50)
Franchise Royalty Fees5.31%(165484.38)
Utilities2.13%(66193.75)
Cost of Goods Sold (COGS)26.56%(827421.88)
Labor (Variable)13.81%(430259.38)
Total (Expenses)85.00%(2647750.00)
Net Profit15.00%467250.00

Note: The displayed expenses are estimates based on industry averages and standard costs. Actual expenses may vary due to factors like location, business size, and market conditions. We recommend conducting detailed research or consulting with a financial advisor for a tailored financial analysis.


Payback Period Of Ace Hardware

With a midpoint investment of $1,240,000 and an estimated 15% profit on the average net sales from 2020, the yearly profit would be $467,250.

So, to find out how long it will take to earn back the initial investment:

Payback Period = Midpoint Investment / Yearly Profit = $1,240,000 / $467,250 = 2.6 years

Based on these figures, it will take approximately 2-3 years to pay back the initial investment for Ace Hardware. This time period could be longer or shorter depending on your sales, revenue, and profit figures.


Failure Rate Of Ace Hardware

Franchised Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
201943534370+17
202043704441+71
202144414540+99

For the Franchised outlets:

  • In 2019, the growth rate was (17)/4353×100≈0.39%
  • In 2020, the growth rate was (71)/4370×100≈1.62%
  • In 2021, the growth rate was (99)/4441×100≈2.22%

Company-Owned Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
2019123186+63
2020186206+20
2021206211+5

For the Company-Owned outlets:

  • In 2019, the growth rate was (63)/123×100≈51.21%
  • In 2020, the growth rate was (20)/186×100≈10.75%
  • In 2021, the growth rate was (5)/206×100≈2.42%

Total Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
201944764556+80
202045564647+91
202146474751+104

For Total outlets:

  • In 2019, the growth rate was (80)/4476×100≈1.78%
  • In 2020, the growth rate was (91)/4556×100≈1.99%
  • In 2021, the growth rate was (104)/4647×100≈2.23%

According to the above-mentioned data, we can see that the franchised outlets for Ace Hardware grew from 2019 to 2021, showing a growth rate between 0.39% and 2.22%.

On the other hand, company-owned outlets of Ace Hardware also grew and the growth rate was lying in the range between 51.21% and 2.42% for the same period of time.

Overall, when we combine the data of franchise and company-owned outlets, we can see that the Ace Hardware franchise has expanded in the years 2019-2021, showing a total growth rate between 1.78% and 2.23%.


Ace Hardware Franchise Requirements

Ace Hardware has a set of requirements prospective franchisees must meet in order to qualify to open an Ace Hardware store.

These include having a minimum of $250,000 in unencumbered cash and demonstrating a net worth of at least $400,000.

On top of this financial requirement, Ace seeks owners who have experience running their own businesses and a track record of success. 

In addition to the financial and experience standards, prospective Ace Hardware franchisees must also be dedicated to upholding the values that make up the company’s culture — winning, excellence, love, gratitude, teamwork, integrity, and humility. 

Owners are expected to provide excellent customer service and create a comfortable shopping environment that adheres to these values.

They should also strive to create an atmosphere where customers feel valued and appreciate their loyalty. 


Ace Hardware Franchise Training And Support

Ace Hardware Franchise Training And Support

Ace Hardware provides comprehensive training and support to its franchisees, ensuring their success in the retail hardware market. 

The company offers a 16–18 week comprehensive and hands-on training program called Base Camp before soft opening.

This training covers all of Ace’s operating systems, tools, and technology, as well as customer service skills. 

Ace also provides virtual coaching sessions to review and discuss business plans, operations, and procedures.

After the soft opening of the store, Ace sends representatives to onsite visits, which include an assessment of the store’s operations and reviews of any modifications or changes needed to optimize performance. 

Store owners are also provided with e-learning courses that help reinforce the initial training given during the first weeks of operation.

Through these courses, franchisees gain further knowledge about how to maximize sales potential and build customer relationships within their store. 


Ace Hardware Franchise Terms Of Agreement & Renewal

The terms of the Ace Hardware franchise agreement is for an initial 5-year term.

At the end of the initial term, franchisees may renew their agreement for unlimited 1-year durations provided they are able to meet certain requirements. 

In order to qualify for renewal, franchisees must demonstrate a positive track record in customer service and operations and pass a financial review that assesses their business’s performance. 

Additionally, Ace Hardware looks at the store’s overall presence in its community and customer feedback when determining whether to renew its franchisees’ agreements. 


Ace Hardware Franchise Obligations And Restrictions

Ace Hardware Franchise Obligations And Restrictions

Ace Hardware has a general policy that it will not issue a membership to a business unless the owner of the business, or at least one of the major owners, is actively involved in the store’s day-to-day operations. 

At this time, Ace does not set any particular restrictions or limitations on the individuals that franchisees may hire to fill the roles of managers, supervisors, or other personnel in the operation of the business.

In most cases, the franchisor does not place any limitations on the kinds of products and services that its franchisees may sell.

Ace Hardware reserves the right to terminate a franchise agreement if the franchisee violates its terms or fails to meet certain financial obligations. 


Ace Hardware Franchise Financial Assistance

Ace Hardware provides several financial assistance programs for prospective franchisees to help them meet the initial costs associated with setting up a store.

These include a number of loan and financing options, as well as cash advances. 

The franchisor is the lender of all programs, so while they are willing to provide assistance in some cases, it is important to note that Ace will still have the final say on whether or not an applicant qualifies for any of its financing options.

Details regarding these programs can be found in the Franchise Disclosure Document (FDD). 

Ace Hardware has also listed on the SBA (Small Business Administration) registry, which means that prospective franchisees may be able to receive additional assistance through the SBA. 


Ace Hardware Comparison

CompanyAce HardwareTrue Value
Year Founded19241948
Franchise FeeNone$9,500
Initial Investment$650,000–$1,000,000$44,550–$987,050
Number of Outlets5,500+4,500+

Conclusion

Ace Hardware has become a giant in the retail hardware market, and its franchises have become incredibly successful. It is one of the 10 best franchises for entrepreneurs that one must own in 2024.

Considering the massive savings and benefits that come with owning an Ace Hardware franchise, it’s no wonder that more and more entrepreneurs are turning to the brand for help in launching their own hardware-selling business. 

Now that you know what it takes to become an Ace Hardware franchisee, you can make a more informed decision about whether or not it’s the right investment for you.


FAQs

Does Ace Hardware Offer Franchising?

Yes, Ace Hardware does offer franchising opportunities for individuals interested in starting their own hardware store.

Who Founded Ace Hardware?

Ace Hardware was founded in 1924 by a group of Chicago-based retailers. 

How Many Ace Hardware Locations Are There?

As in 2023, there were over 5,000 Ace Hardware locations in 60 countries.

Is Opening An Ace Hardware Franchise Worth It?

Yes, owning an Ace Hardware franchise can be a great investment as long as you meet the necessary requirements and are able to manage the store efficiently.

who owns Ace Hardware?

Ace Hardware Corporation is owned solely and exclusively by the local Ace retail entrepreneurs. 

Where is Ace Hardware headquartered?

The headquarters of Ace Hardware is located in Oak Brook, Illinois, Verenigde Staten.

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