Valvoline Instant Oil Change Franchise Cost, & Failure Rate 2024

Franchising is one of the most lucrative and easy options to own a piece of business in the entrepreneurship world.

You get to run a brand without having to feel the stress of increasing your brand awareness and attracting customers.

Valvoline Instant Oil Change is one of those popular and lucrative franchise brands.

If you are thinking of owning one of Valvoline Instant Oil Change franchise branches, you are probably wondering if it’s actually worth the trouble.

They are a big name and have been franchising for a very long time now, making it look like a good option.

We will explain the Valvoline Instant Oil Change franchise, its fees, requirements, terms of the agreement, and everything else to show you whether it’s worth the investment or not.

Valvoline Instant Oil Change Franchise
Valvoline Instant Oil Change Franchise

About Valvoline Instant Oil Change

Valvoline Instant Oil Change is a sub-brand of Valvoline. Inc and they were the largest oil change service provider in the United States in 2022.

They have over 10% market share with over 1,400 locations, 800 of which are franchised. 

Valvoline Instant Oil Change provides maintenance services for different kinds of automobiles.

These maintenance services include antifreeze, oil, differential fluid changes, belts, batteries, fuel system cleaning services, transmission fluid changes, and many other necessary services.

Its founder, Dr. John Ellis, was the inventor of petroleum lubricant for steam engines. They are still famous for this lubricant product.


Valvoline Instant Oil Change History

The Valvoline brand is the world’s first motor oil and has the oldest trademark in the petroleum industry.

Additionally, they are also the first major national re-refined oil and high-mileage motor oil brand in the United States.

They were founded in 1986 and had its first franchise branch in 1988. They now have over 1,435 locations, and about 800 of those are franchised locations.

Valvoline has been under Ashland company’s management since it was founded.

However, in 2017, it became an independent company, one year after its IPO on NYSE in 2016.

Later on, Saudi Aramco announced the acquisition of the company in 2022 for about $2.65 billion. They are now a Saudi Aramco brand, but nothing has changed.

They still franchise under their name and use their name everywhere.


Franchise Model Table

Cost Or FeesAmount
Initial Investment$178,00-$3.2 million
Franchise YES
Franchising Since1988
Franchise-Fee$30,000
Royalty-Fee4-6%
Liquidity$600,000
Estimated Outlets1,435

How Much Does It Cost To Open A Valvoline Instant Oil Change Franchise?

Opening a Valvoline Instant Oil Change franchise could cost anywhere between $178,000 to $3 million.

The reason for the biggest difference is whether the land you’ll operate on is rented or purchased.

If you decide to rent it for three months, your costs will be significantly lower because it costs around $30,000 to $60,000.

However, if you decide to purchase the land and all the improvements, it could range anywhere between $1.5 million to $2.7 million.

Additionally, other costs such as the equipment, insurance, training, and license fee could cost about $100,000. 

You also have the option to buy or lease the equipment just like the land.

The lease method costs about $3,000, and if you purchase, it’s around $250,000. It mostly boils down to your picks to lower the initial investment.


Valvoline Instant Oil Change Revenue & Profit

On average, a Valvoline Instant Oil Change franchise makes $1,420,000 in sales per year.

This figure is based on the average revenue of 720 service centers out of 827 franchised centers operating in 2022.

And if you compare the performance of the Valvoline Instant Oil Change franchise for the last three years, you will notice that the revenue per franchise is constantly increasing.

YearRevenue
2020$1,060,077
2021$1,254,810
2022$1,419,593

Consequently, with a profit margin of an estimated 17%, the Valvoline Instant Oil Change franchise owner makes $241,330 in profits per year on average.

The profit for the Valvoline Instant Oil Change franchise has been calculated from the following data:

Financial OverviewPercentage of RevenueAmount ($)
Individual Franchise Annual Revenue100%1419593.00
Rent10.38%(147282.77)
Insurance5.19%(73641.39)
Salaries20.75%(294565.55)
Franchise Royalty Fees5.19%(73641.39)
Utilities2.08%(29456.55)
Cost of Goods Sold (COGS)25.94%(368206.93)
Labor (Variable)13.49%(191467.61)
Total (Expenses)83.00%(1178262.19)
Net Profit17.00%241330.81

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.


Valvoline Instant Oil Change Franchise Requirements

Valvoline Instant Oil Change Franchise Requirements

Valvoline Instant Oil Change looks for both financial and personal requirements when they approve a franchisee.

On the financial requirements side, you need to have a net worth of at least $1 million and a liquid capital of at least $600,000. 

Liquid capital is the money you should be able to have access to right away, whereas net worth is just the combination of the worth of your assets.

On the personal side, Valvoline doesn’t expect you to have any experience with them before or be a car expert.

However, they seek business-minded people, multi-unit business operators, or independent lube operators.

This means that if you are a business person with a strong background or a lube operator, you will have a higher chance of approval.


Payback Period Of Valvoline Instant Oil Change

The midpoint investment of $300,000, and the yearly profit is $241,330.

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

Payback Period = Midpoint Investment / Yearly Profit = $300,000/ $241,330 = 1.2 years

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


Failure Rate Of Valvoline Instant Oil Change

Franchised Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
2020760722+12
2021722774+2
2022774824+53

For the Franchised outlets:

  • In 2020, the growth rate was (12)/760×100≈1.57%
  • In 2021, the growth rate was (2)/722×100≈0.27%
  • In 2022, the growth rate was (53)/774×100≈6.84%

Company-Owned Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
2020515114+63
2021578148+131
2022709769+60

For the Company-Owned outlets:

  • In 2020, the growth rate was (63)/515×100≈12.23%
  • In 2021, the growth rate was (131)/578×100≈22.6%
  • In 2022, the growth rate was (60)/709×100≈8.46%

Total Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
202012751350+75
202113501483+133
202214831596+113

For Total outlets:

  • In 2020, the growth rate was (75)/1,275×100≈5.88%
  • In 2021, the growth rate was (133)/1,350×100≈9.85%
  • In 2022, the growth rate was (113)/1,483×100≈7.61%

According to the above-mentioned data, we can see that the franchised outlets for Valvoline Instant Oil Change grew from 2020 to 2022, showing a growth rate between 1.57% and 6.84%.

On the other hand, for company-owned outlets, the growth rate of Valvoline Instant Oil Change was lying in the range between 12.23% and 8.46% for the same period of time.

Overall, when we combine the data of franchise and company-owned outlets, we can see that the Valvoline Instant Oil Change franchise has expanded in the years 2020-2022, showing a total growth rate between 5.88% and 7.61%.


Valvoline Instant Oil Change Franchise Training and Support

Valvoline provides several different training programs and ongoing support for the franchisee and some of its employees.

There are four different training segments that Valvoline provides. Real Estate & Development, Administration, Operations, and Center Opening training.

There is also a follow-up training that the franchisee gets after 3-6 months of opening the branch.

Franchisee could also get extra training if the franchisee asks for it, completely free of charge except for the costs incurred during the training.

Valvoline’s ongoing support includes both the operational side and the marketing side.

On the operational side, you get help with site selection, proprietary software, the intranet platform, and online support help.

On the marketing side, they help you with most of the marketing materials and efforts like SEO, email marketing, royalty program, and many more.


Valvoline Instant Oil Change Franchise Terms of Agreement & Renewal

Valvoline Instant Oil Change Franchise Terms of Agreement & Renewal

The length of the initial agreement you will sign will be for 15 years. Later on, when you would like to renew the contract, you will have two options.

You can either sign two consecutive five years and one ten years or just simply one 15-year renewal.

The renewal only happens if you meet the requirements and both sides are satisfied with each other.

If you fail to meet the requirements or breach your contract, Valvoline Instant Oil change can reject your renewal request.


Valvoline Instant Oil Change Franchise Obligations and Restrictions

The franchisee agreement of Valvoline requires either the franchise branch owner or a designated manager to spend all their energy and time on the branch.

This means that a manager who has completed the SuperPro 10 training must be the supervisor of the franchise branch at all times. The manager doesn’t have to have equity in the business. 

However, someone with a stake higher than 5% has to sign a consent for confidentiality and give a personal guarantee of the performance.

Unless there is signed and written consent from the franchisor, the franchisee can’t use the premises for anything other than a Valvoline center.

The franchisee is also required to keep the center open at a minimum from Monday to Sunday between 9 AM and 5 PM.


Valvoline Instant Oil Change Franchise Financial Assistance

Franchisor offers two different types of financial assistance at different levels.

The first one is only for the signs and equipment, and the company directly offers this as a lease from the company.

You sign a sign and equipment lease agreement, and you get to have these for a loan.

The second financial assistance is in coordination with Bank of America. 

Thanks to this coordination, new franchisees can enter into a loan agreement with Bank of America to finance the new center.

However, you have to meet certain financial qualifications of the bank to be approved for this loan.

There are also some sort of incentives from the franchisor itself if you manage to meet certain requirements or in a special location.

For those looking to open a franchise in the retail industry, possibilities include a Costco Franchise, Wawa Franchise, Winzer Franchise, Daiso Franchise, and Dollar Tree Franchise.


Valvoline Instant Oil Change Comparison

CompanyFranchise FeeRoyalty FeeInitial Investment
Jiffy Lube International$35,0003%$207,000-$422,650
Take 5 Oil Change$35,0007%$670,000-$1.3 million
Valvoline Instant Oil Change$30,0004-6%$178,000-$3.2 million

Conclusion

It is obvious that Valvoline brand and Valvoline Instant Oil Change are strong franchise brands that could generate a lot of revenue. It is one of the 50 best franchises that you must own.

With about 800+ franchise outlets and 1,400+ total outlets across the United States, their brand awareness is extremely high.

This makes it rather easier to succeed than some other franchises in the same industry.

Even better is that you don’t need any industry background experience to start a franchise.

However, if you would like to succeed as a franchisee, it’s recommended to have some sort of experience within the automobile industry. 

You also could open it for a very low price if you rent the property rather than buying it compared to its competitors.


FAQs

Who is the current CEO of Valvoline Instant Oil Change?

Sam Mitchell is the current CEO of the brand. He has been in this role since late 2016.

Is Valvoline Instant Oil Change the only automobile maintenance service franchise?

No, there are many similar franchise businesses that you can franchise from.

However, their brand name and awareness are one of the country’s biggest, making it easier to succeed.

How profitable is Valvoline Instant Oil Change franchise?

It depends on where your franchise branch is located, how well you manage the branch, and many other details.

It could make great profits, or it could also lose money. The answer depends on many variables.

Who Owns Valvoline Instant Oil Change?

Valvoline Inc. is an American retail automotive services company. It is owned by Saudi Aramco.

Where is Valvoline Instant Oil Change headquartered?

The headquarters of Valvoline Instant Oil Change is located in Lexington, Kentucky, United States.

How many locations does Valvoline Instant Oil Change has?

There are more than 1,700 nationwide locations.

Who founded Valvoline Instant Oil Change?

John Ellis founded Valvoline Instant Oil Change in 1866. He discovered the lubricating properties of crude oil and hence founded the company.

Sources

https://www.entrepreneur.com/franchises/directory/valvoline-instant-oil-change/282918

https://en.wikipedia.org/wiki/Valvoline_Instant_Oil_Change

https://investors.valvoline.com/governance/management/default.aspx

https://franchise.jiffylube.com/howitworks

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