Jiffy Lube is a behemoth of automotive maintenance companies, and with just a low average investment of $337,000, you can get its franchise.
But how much does a Jiffy Lube franchise owner make? Is the investment worth the effort and profit you will get? What is the franchise failure rate of Jiffy Lube?
Find answers to these and many more questions in our easy-to-read guide below.
About Jiffy Lube
Headquartered in Houston, Texas, Jiffy Lube is an automotive preventive maintenance company that offers a range of services, from tire rotations to oil changes and everything in between.
Jiffy Lube was originally founded by Edwin H. Washburn in 1971, but in 1979 W. James Hindman, a football player, purchased the seven Jiffy Lube franchises operating at that time and renamed it Jiffy Lube International.
Today, the company has over 2,000 franchisee-owned service centers in the U.S. and Canada and a customer base of 20 million.
Jiffy Lube offers franchises to candidates without any prior experience. However, to qualify, the candidate must have a net worth of $500k, minimum liquid assets of $250k.
If you think you meet their financial qualification requirement, then keep reading to learn more about this franchise opportunity.
((https://www.jiffylube.com/about/history))
Jiffy Lube Key Investment Requirements
| Franchise fee | $35,000 |
| Royalty fee | 3% |
| Marketing fee | 8% |
| Investment (mid-point) | $337,000 |
| Payback period | 4 years |
| Minimum net worth | $500,000 |
| Minimum liquid capital | $250,000 |
Jiffy Lube Estimated Investment Breakdown
| Type of Expenditure | Amount |
|---|---|
| Initial Franchise Fee | $0 – $35,000 |
| Equipment, signs and fixtures | $125,000 to $325,000 |
| Conversion Fee | $17,500 |
| First month’s rent and security deposit | $16,000 to $40,000 |
| Initial inventory | $20,000 to $30,000 |
| Insurance | $10,000 to $20,000 |
| Opening Marketing Expense | $15,000 to $20,000 |
| Training expenses incurred by you or your employees | $1,000 to $5,000; does not include wages or salaries of attendees |
| Growth Funding | $0 to $77,350 |
| Additional funds (working capital) | $45,000 |
| TOTAL EXPENDITURES | $207,000 to $500,000 |
| NET TOTAL | $232,000 to $442,650 |
How Much Does A Jiffy Lube Franchise Owner Make?
The sales or revenue of the Jiffy Lube franchise owner may vary based on factors such as location, operating expenses, advertisement, service, etc.
However, according to Jiffy Lube’s website, Jiffy Lube franchise owners make annual revenue of $962,000 on average.
The annual revenue the franchise owner is able to make from this franchise is quite good compared to the initial investment range of $232,000 – $442,650 (excluding land).
How Much Does Jiffy Lube Employee Earn?
Pay at Jiffy Lube may vary considerably by department, job title, location, etc.
According to Ziprecruiter, on average, a Jiffy Lube employee makes a minimum of $13.46 an hour and a maximum of $24.64 an hour.
So someone with the entry-level job title of Cashier Greeter at Jiffy Lube would make $28,000 annually, and someone at a higher level with the job title of General Manager at Jiffy Lube would make $51,250 annually.
Pros And Cons Of Jiffy Lube Franchise
Pros of Jiffy Lube Franchise
- Offers financial assistance.
- Provides comprehensive training.
- Offers flexible franchise options.
- Profitable business.
- Low royalty fee of 3%.
- Provides site selection and construction assistance.
Cons of Jiffy Lube Franchise
- Does not offer exclusive territory protection.
- No absentee ownership.
Jiffy Lube Franchise Average Revenue & Profit
A Jiffy Lube franchise owner makes $962,000 in revenue per year on average. This figure is based on 1,892 franchised Jiffy Lube service centers operating in the year 2021.
If we assume a profit margin of 9% as per the data available in the FDD, then we estimate that a Jiffy Lube franchise owner makes a net profit of $87,000 a year on average.
| Profit and loss | Amount | % revenue |
|---|---|---|
| Revenue | $961,675 | 100% (as per FDD) |
| Gross Profit | $692,406 | 72% |
| COGS | $(269,269) | 28% (industry average) |
| Staff | $(259,652) | 27% (industry average) |
| Rent | $(168,000) | 17% (as per FDD) |
| Royalty and marketing fees | $(110,593) | 12% (as per FDD) |
| Other operating costs | $(67,317) | 7% (assumption) |
| EBITDA | $86,844 | 9% |
Since we assumed a low-profit margin of 9%, it might be possible for a Jiffy Lube franchise owner to make more profit.
Jiffy Lube Franchise Failure Rate
To find out the Jiffy Lube franchise failure rate, let us look at the table below:
| Outlet type | Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|---|
| Franchised | 2019 2020 2021 | 1917 1922 1920 | 1922 1920 1951 | 5 -2 31 |
| Company-Owned | 2019 2020 2021 | 0 10 33 | 10 33 55 | 10 23 22 |
| Total Outlets | 2019 2020 2021 | 1917 1932 1953 | 1932 1953 2006 | 15 21 53 |
As we can see in the table below, Jiffy Lube has been growing consistently for both franchised and company-owned outlets at the rate of 12 units per year.
This indicated that Jiffy Lube is performing well in the market. So clearly, the failure rate of Jiffy Lube is very low.
((https://www.franchimp.com/index.php?page=pdf&f=108795_2022.pdf))
Jiffy Lube Franchise Payback Period
To find out the Jiffy Lube franchise payback period, let us do some calculations:
| AVERAGE INVESTMENT | $337,325 |
| AVERAGE REVENUE PER OWNER | $962,000 |
| AVERGAGE PROFIT PERCENTAGE | 9% |
| AVERGAGE PROFIT PER YEAR | $86,844 |
| AVERAGE PAYBACK PERIOD | 4 Years |
PAYBACK PERIOD = TOTAL INVESTMENT / PROFIT PER YEAR
= 337325/86844 = 3.88 = 4 Years based on median
The average investment for a Jiffy Lube Franchise is $337,325 and the average revenue per owner is $962,000.
With an average profit percentage of 9%, the average profit per year is $86,844.
This means that the average payback period for a Jiffy Lube franchise is 4 years, as the total average investment of $337,325 would be recovered within this period.
What is Jiffy Lube Best known For?
With over 2,000 service centers nationwide, Jiffy Lube is an auto care and oil change service known for its convenient oil changes.
Although the company offers a range of automotive repair services, including glass repair, tire care, etc., they are best known for its signature oil change, which includes oil filters, new oil, vehicle inspection, and a fluid top-off.
Jiffy Lube has a huge customer base because quick, convenient, and affordable service this company offers.
Is Jiffy Lube Franchise Profitable?
Yes, Jiffy Lube is a profitable franchise opportunity with a franchise owner making $86,844 a year in profit on average.
The profitability of any franchised location varies depending on a number of factors, such as its location, operating expenses, etc.
So as a Jiffy Lube franchise owner, you might be able to make more or less than this amount.
Jiffy Lube Franchise Earning Potential
Jiffy Lube has a good earning potential as the company already has a huge customer base which is constantly increasing.
And the best part is that the company is constantly expanding with a low failure rate.
Also, we derived the profit amount of $86,844 a year by assuming a profit margin of only 9%, so with a higher profit margin scope, a Jiffy Lube franchise owner may earn more.
So all these facts point us to believe that the Jiffy Lube franchise has good earning potential.
Wrap Up
After studying the nitty-gritty of the Jiffy Lube franchise, we can say that Jiffy Lube is undeniably a great franchise opportunity.
It requires a comparatively lower cost of investment, $337,000 on average, and in return, it can generate average annual revenue of $962,000.
The failure rate of this franchise is low, and the payback period is 4 years minimum.
It charges a low royalty fee of 3%; however, the marketing fee of 8% is high.
In order to be eligible for this franchise, you obviously need to meet some financial requirements.
Overall, we do not see a major flaw that should stop you from buying this franchise.
FAQ
How long is the Jiffy Lube franchise agreement?
The franchise agreement of Jiffy Lube lasts for 20 years with a renewal term of 10 years.
Does Jiffy Lube offer financing?
Yes, Jiffy Lube offers financing, unlike many other companies. For this, the company offers upfront funding to help offset costs.
So, for example: if you are willing to construct a new Jiffy Lube location, then you might be eligible to receive approximately $77,350 to support your initial start-up cost.
This amount may vary based on the location.
What are the eligibility criteria to own a Jiffy Lube franchise?
To own a Jiffy Lube franchise you must have:
- Net worth of $500,000.
- Minimum liquid capital of $250,000.
- Franchise fee of $35,000.
- Some experience running a business is preferred.