If you are interested in cars and are an entrepreneur looking to own a franchised business, you probably thought about owning an automotive part retailer since the market is huge. One of the most famous and biggest brands in the United States is AutoZone, which has been offering its services for decades now.
Unfortunately, AutoZone doesn’t offer franchising, and all their stores are owned by the company. We will dive into AutoZone, the reasons why they are not offering franchises, and the alternatives to go for other than AutoZone.
About AutoZone And AutoZone History
AutoZone is an American aftermarket automotive parts retailer offering both automotive parts and accessories. They are the largest automotive part retailer in the United States, with over 6,300 stores worldwide.
They were founded in 1979 and expanded quickly both in the United States and abroad.
Now, they have over 6000 stores serving the United States, Puerto Rico, Brazil, and Mexico. The company never offered franchising in the past and doesn’t actively offer franchising. The reason behind that is not clear.
There are no public plans to start offering franchising in the future from the company so far. All of their stores are company-owned, and they open their own stores in each location.
Franchise Model Table
| Cost Or Fees | Amount |
|---|---|
| Franchise | NO |
| Franchise-Fee | NO |
| Estimated Outlets | 6,306 |
How Much Does It Cost To Open An AutoZone Franchise?
Since AutoZone is not a franchise, there are also no costs associated with opening an AutoZone franchise. All the costs that come with opening an AutoZone are paid by the company itself, and this information is not available to the public.
Why Doesn’t AutoZone Offer Franchising?
There is no official information about why AutoZone doesn’t offer franchising. However, we know that AutoZone is a publicly traded company, and they might not want to give a piece of the brand to others and keep the company stable by managing it from one location.
It is easier to be more profitable and keep the quality the same everywhere when you manage all stores from one location.
Profit & Revenue Of AutoZone
AutoZone’s annual gross revenue for the fiscal year 2022 was $17.5 billion, which is about a 7% increase from the previous year. In the same fiscal year, AutoZone made $2.5 billion in net profits, a 4% increase from the previous year. This represents a 4% increase from the previous year.
This shows us that AutoZone has about a 14% net profit margin. This is quite high compared to the industry standards and, in general, the standards for every business.
What Are Some Alternatives to AutoZone?
AutoZone might not offer franchising, but there are many other similar companies that do offer franchising. If you are interested in owning a franchised store in the industry and not just with AutoZone, you should consider some of these alternatives as an entrepreneur.
Here are some of the alternatives to AutoZone that you can franchise with.
1. Mighty Auto Parts
Mighty Auto Parts is one of the leading auto parts dealer franchises in the United States, with around 100 stores across the country. They are mostly known for their parts stocking program focused on improving reliability for car technicians. They are an active franchise and have been franchising since 1970.
The cost to open Mighty Auto Parts could be anywhere between $240,500 and $517,600. It stands as an affordable franchise. The franchise fee is between $25,000 and $60,000, which is included in the startup costs. You also have to pay a 5% royalty fee from monthly gross sales.
2. 1-800-Radiator
1-800-Radiator is another leading auto parts distributor with over 200 locations in the United States. The company has been in operation since 1985 and has been franchising actively since 2001 with an established franchise system.
Their inventory is very extensive, with auto parts like radiators, mirrors, crate engines, fuel pumps, transmissions, and many others.
If you want to open a 1-800-Radiator franchise, the expected initial investment is between $458,000 and $1.2 million. This expected investment covers all related startup costs, like the $45,000 franchise fee. The royalty fee is 8%.
3. Big O Tires
Another great alternative to AutoZone is Big O Tires, which is an American retail franchise that operates over 450 stores in the United States. The company has over 40 years of franchising experience since they started in 1982. They sell and service tires, maintenance and replacement services, and auto products.
The cost to open a Big O Tire franchise ranges from $600,000 to $1.2 million, including the $35,000 franchise fee. The expected investment covers all kinds of startup costs of the franchised store. There is also a 4.25% royalty fee, one of the lowest in the industry.
If opening an automotive service franchise appeals to you, consider Jiffy Lube, AAMCO, Express Oil Change Franchise, Ziebart, and Alta Mere as viable options.
Comparison
| Name | Franchise Fee | Royalty Fee | Initial Investment |
|---|---|---|---|
| Interstate All Battery Center | $37,500 | 5% | $172,600-$411,000 |
| Detail Garage | $30,000 | 4% | $138,500-$178,500 |
| AutoZone | NO | NO | NO |
Conclusion
AutoZone is by far the biggest American aftermarket automotive parts retailer, with over 6,300 stores in the United States and abroad. They serve Brazil, Puerto Rico, and Mexico apart from the United States.
The company has $17.5 billion in annual revenue and $2.5 billion in net profits, making it an extremely attractive business for entrepreneurs.
However, unfortunately, the company doesn’t offer franchising and doesn’t allow entrepreneurs to become a part of their brand.
They open all of their stores across the world, finance, and manage the stores by themselves. You can still opt for alternative brands in the same industry, offering franchises like Detail Garage, Big O Tires, and many others.
FAQs
Is AutoZone a franchise?
No, AutoZone is not a franchise as of 2023. They have never offered franchising since they were founded, and all their stores are company-owned.
What is the AutoZone franchise fee?
Since AutoZone is not a franchise, there is also no franchise fee. If the company decides to offer franchising, they will set a franchise fee, which they will announce.
Will AutoZone offer franchising in the future?
There is no official communication from the company about whether AutoZone will offer franchising in the future or not. For now, there are no official plans.
Sources
https://about.autozone.com/about-autozone/real-estate/overview
https://www.autozone.com/locations/
https://www.macrotrends.net/stocks/charts/AZO/autozone/net-income