The Napa Auto Parts franchise offers both auto repair services and supplies.
Its focus is on distributing automotive parts and equipment, as this is a highly in-demand sector. This franchise can be a lucrative opportunity for aspiring entrepreneurs.
Surprisingly, this franchise is also more affordable than many others in the automotive sector. The opportunity for franchisees is even bigger.
Let’s find out what are all the costs and requirements of the Napa Auto Parts Franchise.
About the Napa Auto Parts Franchise
NAPA stands for National Automotive Parts Association, and it’s an American company that distributes automotive accessories and replacement parts.
They are operating in North America, Australia, Europe, and New Zealand.
The company can provide over 500,000 different items, including replacement parts, paints, refinishing supplies, tools, equipment, and more.
NAPA retail stores attract many clients as they are very well known; regular customers and other businesses know that Napa Centers are the places where they can find anything they need to take care of any type of vehicle.
History of the Napa Auto Parts Franchise
The NAPA Auto Parts franchise was founded in 1925. Today, there are over 6,000 NAPA stores in North America.
Not all of them are franchised: 1,142 stores are owned by Genuine Parts Company, and the remaining are independently owned by franchisees.
In 2013, Genuine Parts Company acquired Exego Group, and thanks to this collaboration, the company began opening NAPA stores in Australia and New Zealand.
With a similar deal with Alliance Automotive Group in 2017, Napa is now starting to expand in Europe.
NAPA Auto Parts Franchise: Business Model
NAPA Auto Parts is a distributor of automotive accessories and supplies. It owns over 6,000 stores in North America and abroad.
They are also a franchise, and they are currently open to new franchise applications. It means that any entrepreneur can open their own NAPA Auto Parts store.
|NAPA Auto Parts
|Car accessories and parts distributor
|Ad royalty fee
|Number of units
How Much Does It Cost To Open A NAPA Auto Parts Store?
When you launch your new NAPA Auto Parts business, you need to set up an entire distribution center.
For this reason, the initial investment can seem high, but, as we’re about to discover in this article (see the NAPA Auto Parts VS Alta Mere section), this is not the most expensive franchise in this sector.
Opening a distribution center is far more affordable than opening a full car care center, but the resulting business will be just as profitable.
The initial investment required to launch a new Napa Auto Part franchise can be estimated to be about $90,000.
The initial franchise fee is unknown (you need to apply for the franchise program if you want to know this detail because the company is reserved about it), but these types of franchises usually have a franchise fee between $20,000 and $30,000.
There is no public information about ongoing fees, but you should expect them.
They are usually the royalty fee and the advertising fee. Both are percentages calculated on your gross revenue. You can estimate a 5% – 8% royalty fee and a 1% – 3% advertising fee.
NAPA Auto Parts Franchise: Requirements
In order to apply to the NAPA Auto Parts franchise program, you need to have a liquid cash availability of a minimum of $75,000.
In the automotive industry, a strong business plan will also be taken into consideration during the application process for the NAPA Auto Parts franchise program.
It is important to have a solid understanding of the industry and demonstrate a clear vision for your franchise business.
NAPA Auto Parts Franchise Revenue & Profit
The profit and revenue of the NAPA Auto Parts franchise can vary based on the franchise’s location, operating expenses, size of the outlet, etc.
NAPA Auto Parts has not made any financial information about itself public, so the revenue and profit of its franchises are not known.
However, it is estimated that NAPA Auto Parts company makes estimated revenue of $9.9 billion per year. If we assume a profit margin of 15%, then we can calculate that a NAPA Auto Parts franchise owner make $148,500 in net profits on average.
This is how we calculated this amount:
|Percentage of Revenue
|Individual Franchise Annual Revenue
|Franchise Royalty Fees
|Cost of Goods Sold (COGS)
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.
NAPA Auto Parts Franchise: Training and Support
One of the reasons why the NAPA Auto Parts franchise is a great opportunity is that they provide tons of support to new franchises.
The main company assists new franchisees as they set up their new businesses and during the most challenging steps of their journey, like site selection, initial store setup, and ongoing management.
The company also provides a New Store Owner training course and a support team that remains at the disposal of the franchisee during the entire collaboration.
NAPA Auto Parts Franchise: Terms of Agreements and Renewal
The majority of franchises, other than the initial and ongoing franchise fees, also require a renewal fee.
The renewal fee is due at the end of the franchise contract: you need to pay it only if you want to extend or renew the contract and keep operating with your franchise.
The information about NAPA Auto Parts Franchise terms of agreements isn’t public, but for franchises of this dimension, it is usually 15 or 20 years.
The renewal fee is also unknown, but it can be estimated to be around $2,500.
Napa Auto Parts Franchise: Obligations and Restrictions
Like many other pieces of information about this franchise, Obligations, and Restrictions are not known.
However, it’s important to know that any of them must be written in the franchise contract, so make sure you read it well.
Napa Auto Parts Franchise: Financial Assistance
The NAPA Auto Parts Franchise provides some forms of financial assistance to their franchisees.
Both in-house and third-party financial support is provided, and it can help you face the start-up costs of your business.
NAPA Auto Parts also provide a veteran discount: veterans can obtain 10% off the initial down payment.
Napa Auto Parts Franchise Payback Period
With an investment of $90,000 and an estimated 15% profit on the average net revenue, the yearly profit would be $148,500.
So, to find out how long it will take to earn back the initial investment:
Payback Period = Investment / Yearly Profit = $90,000 / $148,500= 0.60 years
Based on these figures, it will take approximately six-twelve months to pay back the initial investment for Napa Auto Parts Franchise. This time period could be longer or shorter depending on your sales, revenue, and profit figures.
NAPA Auto Parts VS Alta Mere
|NAPA Auto Parts
|Car accessories and parts distributor
|Franchise Car accessories provider
|$130,000 – $160,000
The Napa Auto Parts Franchise isn’t exactly a low-cost franchise, but it’s one of the most affordable in this sector.
Unfortunately, they are very reserved about the details of their franchise program, and they do let us know the exact amount of every franchise fee.
NAPA Auto Parts Franchise communicates these details only to those who apply to the program. If you want to know more about it, you need to contact the company directly.
NAPA Auto Parts Franchise: FAQs
Is NAPA Auto Parts a franchise or a chain?
NAPA Auto Parts is a franchise, meaning that you can open your NAPA distributor.
Who is the owner of the NAPA Auto Parts franchise?
NAPA Auto Parts is currently a subsidiary of Genuine Parts Company, and Paul Donahue is the current CEO.
How many Napa Auto Parts distributors are there?
There are more than 6000 Napa Auto Parts distributors in North America, and more have been opened abroad.
Is the NAPA Auto Parts franchise a good investment?
The NAPA Auto Parts franchise is a great investment. In the sector of automotive distribution, it can be considered an affordable franchise, and it’s so well-known that clients already know the brand and will start coming from day one.
Is the NAPA Auto Parts franchise worth it?
The Napa Auto Parts Franchise is totally worth it. The initial investment is big, but it’s not huge; the brand is so well known that you won’t have any difficulties finding clients. Last but not least, the demand in this sector is always high.
Amit Gupta is an experienced expert in digital marketing and co-founder of DrFranchises. With more than 11 years of knowledge in franchise digital marketing, SEO, email marketing, and social media marketing, Amit has helped many brands achieve incredible success online. As a passionate entrepreneur and owner of 7 franchises, he continues to study franchise models, looking at costs, revenue, and profitability to guide brands toward profitable growth. When he’s not working on digital marketing, Amit enjoys spending time playing with his beloved dog.