Snap-On Franchise Dealer Profit, Salary, Failure Rate 2024

Are you looking for a franchise business opportunity and wondering how much a Snap-on franchise owner makes, profit, owner salary, dealer salary, and failure rate? We got you!

In this guide, you will find out all the necessary details about the Snap-on franchise, such as its initial investment cost, profit, and sales figure, among others. So make sure you read till the end!

How Much Does A Snap-on Franchise Owner Make

About Snap-on

Founded in 1920 by Joseph Johnson and William Seidemann, Snap-on is a marketer and global producer of tool and equipment solutions.

Snap-on’s product line includes tool storage solutions, high-quality hand tools, management systems, and “under-car” shop implements such as tire changers, hydraulic lifts, etc.

The company is headquartered in Kenosha, Wisconsin, and operates in over 130 countries and its global franchise market consists of 4,600 franchisees which are flourishing rapidly, thanks to their successful business model.

If you are interested to invest in the Snap-on franchise, then you should know that the franchisor does not require you to have prior experience in this field and offers free training and support to get you started.

To learn about how much a Snap-on franchise owner makes, keep reading!

((https://www.snapon.com/EN/Franchise/Why-Own-It/About))


How Much Does A Snap-on Franchise Owner Make As A Dealer?

Snap-on franchise owner makes an average sales of $750,000 annually, with the lowest performing franchise generating less than $150,000 in annual sales and the highest generating more than $2,000,000 in annual sales.

However, since Snap-on is a customer relationship business, the sales and profit you may generate will vary largely upon your business relationships and your ability to operate the Snap-on Tools program. 


Snap-on Franchise Average Revenue & Profit

Since Snap-on does not incur rent costs and has very low royalty fees and zero marketing fees, we can consider the profit margin to be 25% on average.

The average sales of the Sanp-on franchise are $750,000 a year, and with a profit margin of 25%, its franchise owner can make an average of $187,500 in net profit annually.

Since the franchise owner can sell the items to the consumer themselves, they do not really require to hire anyone.

Please remember that we are assuming this condition in order to make this much profit. If you hire employees, your net profit will be slightly lower than the average. 

Here’s how we calculated the above profit figure:

Financial OverviewPercentage of RevenueAmount ($)
Individual Franchise Annual Revenue100%750000.00
Rent9.38%(70312.50)
Insurance4.69%(35156.25)
Salaries18.75%(140625.00)
Franchise Royalty Fees4.69%(35156.25)
Utilities1.88%(14062.50)
Cost of Goods Sold (COGS)23.44%(175781.25)
Labor (Variable)12.19%(91406.25)
Total (Expenses)75.00%(562500.00)
Net Profit25.00%187500.00

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.

On the lower end, Snap-on franchise dealers make $50,000 in annual profit, and on the higher end, they can make more than $200,000 in annual profits.

If we talk about the Snap-on company in general, then the company has generated average annual revenues of over $3.5 billion and net income of $500 million.


Snap-on Franchise Failure Rate

To find out the Snap-on franchise failure rate let us look at the number of Snap-on outlets that opened and closed between 2020-2022.

Franchised Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
202033023280-22
202132803287+7
202232873270-17

For the Franchised outlets:

  • In 2020, the failure rate was (22)/3302×100≈0.66%
  • In 2021, the growth rate was (7)/3280×100≈0.21%
  • In 2022, the failure rate was (17)/3287×100≈0.51%

Company-Owned Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
2020139137-2
2021137141+4
2022141139-2 

For the Company-Owned outlets:

  • In 2020, the failure rate was (2)/139×100≈1.43%
  • In 2021, the growth rate was (4)/137×100≈2.9%
  • In 2022, the failure rate was (2)/141×100≈1.41%

Total Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
202034413417-24
202134173428+11
202234283409-19 

For Total outlets:

  • In 2020, the failure rate was (24)/3441×100≈0.69%
  • In 2021, the growth rate was (11)/3417×100≈0.32%
  • In 2022, the failure rate was (19 )/3428×100≈0.55%

According to the above-mentioned data, we can see that the franchised outlets for Snap-On declined from 2020 to 2022, showing a failure rate between 0.66% and 0.51%. In 2021, the company showed a growth rate of 0.21%.

On the other hand, for company-owned outlets, the failure rate of Snap-On was lying in the range between 1.43% and 1.41% for 2020 and 2022. In 2021, the growth rate was 2.9%.

Overall, when we combine the data of franchise and company-owned outlets, we can see that the Snap-On franchise has expanded only in 2021, showing a growth rate of 0.32%. However, in the year 2020 and 2022, the company experienced declining number of outlets, showing a failure rate between 0.69% and 0.55%.


Snap-on Franchise Payback Period

On the basis of the median franchise sales of Snap-on, which is $750,000, the payback period of the company can be calculated.

The midpoint investment of the Snap-on franchise is $333,434, and with an estimated 15% profit margin, the yearly profit would be $187,500.

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

Payback Period = Midpoint Investment / Yearly Profit = $333,434/ $187,500= 1.7 years

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


What Is Snap-on Best Known For?

Snap-on was built on the concept of “Five Do the Work of Fifty,” and this is exactly what the company stands by and is popularly known for.

Snap-on offers the most premium quality of tools that you can find for professional use in industries like marine, aviation, automotive, equipment, heavy-duty, railroad industries., etc.

What differentiates Snap-on from its competitors is, that they keep on researching and are very focused on innovation. Additionally, they run their “business on wheels,” so you do not have to visit an actual physical store and can call them instead.


Is Snap-On Franchise Profitable?

Is Snap-On Franchise Profitable

As per our research, the profitability of the Snap-on franchise is good ($170,000 yearly) and given the high cost of investment ($201,433 – $465,436), we expect nothing less.

Not to mention, the brand has a strong presence in the market owing to its premium quality products, which is the reason for its good sales, and thereby, good profit.

A few more factors that allow Snap-on franchise owner to make good profit includes low royalty fee, zero marketing fee, and zero rent fee.

Having said that, you should note that this business is highly dependent on customer relationships and if you do not have this crucial skill then you might dangle on the lower end of profit ($50,000 yearly)


Snap-On Franchise Earning Potential

The earning potential of the Snap-on franchise is high, and you can make an annual net profit of up to $200,000, but only the top 10% of franchises are able to make this much amount.

If you do not hire employees, run the business yourself, and have excellent customer relationship skills, then you might be able to make this kind of profit from the Snap-on franchise.

Most Snap-on franchise owners are able to make between $170,000-$190,00, which is quite good on its own.


Snap-on Initial Investment & Ongoing Costs

Franchise fee$8,000 – $16,000
Royalty fee$135 per month
Marketing fee0
Van Lease $2,322-$2,722/month
Maintenance Fee$325/month 
Investment $201,433 – $465,436
Payback period2 years

Snap-On Estimated Investment Breakdown

 Out-Of-Pocket Expenses with Franchise Finance Program FinancingEstimated Total Initial Investment Range
Real Estate$0$0
Initial License Fee$0$8,000 – $16,000
Initial Inventory$0$130,000 – $140,000
Supplies$0 – $400$0 – $400
Electronic Signature Pad$0 – $200$0 – $200
Van$4,219 – $4,269$55,000 – $190,000
Van Delivery Charge$200 – $4,900$200 – $4,900
Van Insurance (3 months)$723 – $2,166$723 – $2,166
License$200 – $2,400$200 – $2,400
Acquisition / Development of Revolving Accounts$0$0 – $85,000
Computer Software License Fee$0$2,400
Documentation Fee with Snap-On Franchise Finance Loan$100 – $250Not applicable
Other Equipment, Fixtures and Expenses$150 – $170$150 – $170
Minimum Down Payment with Franchise Finance Program$25,000Not applicable
Additional Funds – 3 Months$13,529 – $24,881$4,760 – $21,800
Estimated Total Initial Franchise Expense$44,121 – $64,636$201,433 – $465,436


How Much Does A Snap-on Employee Earn? 

According to the 997 data points collected by Indeed from employees directly, Snap-on pays a minimum of approximately $10.09 per hour and a maximum of $31.36 per hour to their employees.

If we look at this in annual terms, then the average Snap-on salary ranges from approximately $25,337 per year to $115,962 per year with the average pay being $48,376 per year.


Pros & Cons Of Snap-On Franchise

Pros & Cons Of Snap-On Franchise

Pros Of Snap-On Franchise

  • Provide training and support
  • Highly profitable
  • Strong ubiquitous presence
  • No initial training fee
  • Offers Veteran’s discount
  • Low royalty fees
  • No advertising fee
  • The showroom on wheels concept saves labor cost and real estate cost

Cons Of Snap-On Franchise

  • Snap-on Credit issue
  • Limited entrepreneurial growth
  • External competition
  • High-cost investment

Wrap Up

After analyzing the Snap-on franchise, here is what we think:

Snap-on is a high-investment franchise, but it also generates a good amount of profit.

The best part about this franchise is that the selection process is easy, the qualification requirements are not stringent.

Additionally, you pay a fixed low royalty fee, incur zero marketing and rent fees, and do not even compulsorily need to hire employees.

All these factors can help you in enjoying a good profit margin.

However, many Snap-on outlets have been closed or reacquired over the last few years.

We believe that if you want to succeed in this business, having good customer relationship skills is necessary.


Frequently Asked Question

What is the initial franchise fee of Snap-on?

The initial franchise fee of Snap-on range between $8,000 – $16,000.

How long does it take to open Snap-on franchise?

Snap-on Tools franchisees can get their mobile store opened in as quick as 30 days.

What support does the Snap-on franchisor offer?

For the first three weeks of your Snap-on mobile store, a team member will ride along with you to make you familiar with how things work. And after these three weeks, you can always reach out to the franchisee support team via phone.

How long does the initial Snap-on franchise training last?

Your initial Snap-on franchise training lasts for 10 days and is held in Grapevine, Texas.

How many locations does Snap-On has?

Snap-On serves customers in more than 130 countries, and it has more than 3,400 franchise vans in the United States.

Where is Snap-On headquartered?

The headquarters of Snap-On is located in Kenosha, Wisconsin.

Who is the founder of Snap-On?

The founder of Snap-On is Joseph Johnson. He started the company in Milwaukee, Wisconsin, in 1920 with a loan from his family and a vision to develop better tools for professional mechanics. He set out to create tools that were more durable than those available then and designed them specifically to meet the needs of professional mechanics.

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