About Merlin Franchisor SPV- Initial Application for Large Franchisor Exemption (ND and RI) Franchise
Merlin is a vehicle maintenance and repair franchise specializing in preventive maintenance, brake systems, exhaust systems, ride control, tires, and other essential automotive services.
The brand has been franchising since 1981 under Driven Systems LLC, building more than four decades of experience in keeping vehicles safe and running smoothly.
The franchise fee is $30,000.
Merlin Franchisor SPV- Initial Application for Large Franchisor Exemption (ND and RI) Franchise Cost & Fees
Minimum Investment
$262K
Average Investment
$397K
Maximum Investment
$531K
| Fee Type | Amount | Notes |
|---|---|---|
| Initial Franchise Fee | $30,000 | One-time payment upon signing |
| Royalty Fee | 6.9% of Net Revenues of gross sales | Ongoing; paid monthly |
| Marketing/Ad Fund | 5% of Net Revenues | National brand fund |
| Total Investment Range | $262,300 – $531,000 | Includes build-out, inventory, working capital |
The investment range of $262K–$531K reflects variability in build-out costs, store size, lease terms, and market. The combined royalty (6.9% of Net Revenues) and marketing fee (5% of Net Revenues) are ongoing costs paid as a percentage of gross sales.
Investment Breakdown (Item 7)
| Item | Low | High |
|---|---|---|
| Initial Franchise Fee | $30,000 | $30,000 |
| Leasehold Improvements | $20,000 | $150,000 |
| Furniture, Fixtures, Equipment and Signage | $140,000 | $200,000 |
| First 3 Months’ Rent | $15,000 | $25,000 |
| Security Deposit | $4,300 | $10,000 |
| Opening Inventory and Supplies | $12,000 | $20,000 |
| Training Expenses | $1,000 | $6,000 |
| Miscellaneous Opening Costs | $10,000 | $30,000 |
| Additional Funds – 3 Months | $30,000 | $60,000 |
Additional Fees (Item 6)
| Fee Type | Amount |
|---|---|
| Transfer Fee | $9,000 |
| Renewal Fee | $0 |
| Technology Fee | Franchisee Profitability Program Software Fees: Currently, $14.95 per month (plus $50 one-time onboarding fee); M.Key Software Fees: $375 basic software technical support and maintenance fee per month (additional option: $25 per month – Quick Books Integration) |
| Audit Fee | Cost of inspection or audit, plus any deficiency and late payment charges |
| Interest Charges on Late Payments | Lesser of 21% per year or highest rate allowed by law |
| AutoNet TV Fee | $40 per month, subject to periodic adjustment |
| Costs and Attorneys’ Fees | Will vary under circumstances |
| Indemnification | Will vary under circumstances |
| Customer Reimbursements | Up to 200% of original repair amount |
| Service Charges (Specified Defaults) | $25 to $100 |
| Service Charges for Specified Defaults (reports, royalty, marketing fund, standards) | $100 per day |
| Service Charges for Failure to Submit Financial Statements | $25 per day |
| Service Charge for Failure to Attend National or Regional Franchise Meetings | $2,500 per occurrence |
| Resale Assistance Fee | $10,000 per Merlin Shop |
| M.Key Software Transfer Fee | $1,000 |
Training Program (Item 11)
| Detail | Information |
|---|---|
| Total Duration | minimum of 4 weeks |
| Classroom Training | 97 |
| On-the-Job Training | 47 |
| Training Location | Merlin Training Center in Hoffman Estates, IL |
| Additional Training | The Company has the right to require that you (or the Shop manager) and/or technicians complete supplemental and refresher training programs during the term of the Franchise Agreement. Additional training will be conducted at the Company’s offices, outside training centers or at Merlin Shops as the Company designates. You will be responsible for any travel and living expenses which you or the Shop manager incurs in connection with supplemental or refresher training. Managers and supervisory personnel you hire after the opening of the Shop must, subject to reasonable limitations prescribed by the Company, enroll in and successfully complete training programs we conduct. The Company does not presently anticipate charging a fee for training additional personnel. |
Territory Rights (Item 12)
| Detail | Information |
|---|---|
| Territory Type | Protected |
| Exclusive Territory | No |
| Territory Size | 2-mile radius of your Shop |
| Description | The Franchise Agreement grants you the right to operate the Shop at a specific location. Once you locate and we have approved this site, you will be granted the Territory. During the term of the Franchise Agreement, we will not operate (either directly or through an affiliate) nor grant a franchise (except to you) for the operation of a Merlin Shop to be located within a 2-mile radius of your Shop (the “Territory”). You may not conduct the business of your Shop or use the franchise system at any other location, or relocate your Shop without our prior written consent. We will approve the relocation of the Shop, or the establishment of an additional Merlin Shop, if the new Shop is more than 2 miles from a then-existing Merlin Shop and otherwise meets the Company’s site and market criteria. You are not obligated to meet any sales quotas or other requirements, other than those specified in the Franchise Agreement being in force, in order to maintain the Territory. Any Shop can receive orders outside of the Shop’s Territory without special payment. You are not permitted to use other channels of distribution, such as the Internet, catalog sales, telemarketing, or other direct marketing, to make sales outside of your Territory. Unless you sign an Area Development Agreement, you have no options, rights of first refusal, or similar rights to acquire additional franchises. |
Renewal, Termination & Transfer (Item 17)
| Detail | Information |
|---|---|
| Initial Term | 15 years |
| Renewal Term | 10 years |
| Renewal Fee | $0 |
| Renewal Conditions | Proper notice to us, remodel, execute general release, and sign then-current form of renewal franchise agreement. The renewal agreement may contain materially different terms and conditions than the Franchise Agreement, but the royalty fee will not be greater than the royalty fee that we then impose on similarly-situated renewing franchisees. |
| Transfer Fee | $9,000 |
| Transfer Conditions | Transferee qualifies; all obligations, including debts, are fulfilled; transferee completes training; fee paid; you execute general release, and transferee signs the then-current Franchise Agreement. You may only transfer the Development Agreement with a transfer of all Merlin Shops that you (and, if applicable, your affiliates) own and operate. We will consent to the assignment of the Development Agreement to an entity that you form for convenience of ownership if the entity is newly formed; the entity has and will have no other business other than the development and operation of Merlin Shops; you and the entity satisfy our then-current transfer conditions; and you hold all equity interests in the entity or, if you are owned by multiple individuals, each owner’s proportionate equity interest in the entity is the same as his/her equity interest in you pre-transfer. |
| Termination for Cause | Under the Franchise Agreement, non-curable defaults include bankruptcy, conviction of a felony, abandonment, unauthorized transfers, unauthorized use or disclosure of confidential information or the Operations Manual, unauthorized use of the Marks, material misrepresentations, breach of non-compete, loss of right to possession of the premises, and repeated violations. Under the Development Agreement, non-curable defaults include failure to sign purchase agreement, lease, or sublease for any Merlin Shop by applicable secure deadline; failure to develop and open any Merlin Shop by applicable opening deadline; failure to have open and operating at least the cumulative number of new Merlin Shops in the Development Area then required by the Development Schedule; termination of any Franchise Agreement between you (or any of your affiliates) and us by us; insolvency; bankruptcy-related events; conviction of or pleading no contest to a felony, a crime involving moral turpitude, or any other crime or offense that is likely to affect adversely the reputation and goodwill associated with the Merlin franchise system and the Marks; abandonment or failure to actively operate; violation of laws or regulations; unauthorized transfer; and violation of non-compete or confidentiality restrictions. |
| Non-Compete Period | 2 years |
| Non-Compete Details | No ownership in any Competitive Business; no interest in any entity that is granting franchises for Competitive Businesses; and no performing services for any Competitive Business or business that is granting franchises for Competitive Businesses (subject to state law). A “Competitive Business” means any business that operates motor vehicle shops specializing in the replacement and/or repair of motor vehicle parts and other automotive services (i.e., vehicle maintenance); however, the following will not be considered a Competitive Business: (a) another Merlin Shop operated under a Franchise Agreement with us; or (b) another automotive business franchised by Driven Brands Holdings or its subsidiaries. After termination or expiration: No interest in any Competitive Business for 2 years within the Territory or a radius of 2 miles of any other Merlin Shop, or in any entity granting franchises for Competitive Businesses (subject to state law). Under the Development Agreement, however, the first restriction above applies to any Competitive Business located within the Development Area, within 2 miles of the border of the Development Area, and within a 2-mile radius of any other Merlin Shop then in existence. |
Operations & Supply (Items 8 & 15)
| Detail | Information |
|---|---|
| Owner-Operator Required | Yes |
| Participation Details | You must devote a minimum of 40 hours per week to the business of operating the Shop. You must spend 90% of that 40-hour period on the Shop premises. The Shop must be under your direct supervision or that of one or more competent employees acting as the Shop manager at all times. Your Shop manager must successfully complete the Company’s training program. You must keep us informed at all times of the identity of any employee(s) acting as manager(s) of the Shop. The manager(s) need not have an equity interest in the franchise. You must at all times faithfully, honestly and diligently perform your obligations under the Franchise Agreement; continuously exert your best efforts to promote and enhance the business of the Shop; and not engage in any business or other activities which will conflict with your obligations under the Franchise Agreement. You must attend all franchise, marketing, and training meetings called by the Company. You will need to pay all costs of travel and hotel and living expenses while at these meetings. If you fail to attend, we will fine you $2,500 for each meeting missed, at the sole discretion of the Company. We will contribute any fine to the Marketing Fund. If you are a corporation, partnership, or other legal entity, your principal owners must not only personally guarantee your obligations under the Franchise Agreement but also agree to be personally bound by, and personally liable for the breach of, every provision of the Franchise Agreement, both monetary obligations and obligations to take or refrain from taking specific actions or to engage or refrain from engaging in specific activities. This “Guaranty” is attached as the last 2 pages of the Franchise Agreement. If you sign the Development Agreement, prior to opening your first Merlin Shop, you must hire and train a managing director (the “Managing Director”), who will be subject to our approval in our reasonable discretion. Your Managing Director must devote his or her full time and efforts to the management and/or supervision of Merlin Shops within the Development Area. |
| Required Suppliers | You must use and purchase from us our customized M.Key shop management software (“M.Key Software”). All exhaust system components and other motor vehicle parts, tires, maintenance programs/packages, and other products, materials and supplies sold and used in the operation of the Shop must be the Company’s or other private brand designated by the Company as being of acceptable quality or other brands of equivalent quality approved by the Company. You must use the computer software we designate. Currently, you must use M.Key Software as the shop management software for the Shop. We are the only approved supplier of M.Key Software for franchisees. You also must install and use in the operation of the Shop the Franchisee Profitability Program software. |
| Supply Restrictions | You may purchase or lease approved brands of equipment from any supplier. If you propose to purchase or lease any brand of equipment which is not then approved by the Company, you must first notify the Company and you and/or the supplier must submit to the Company upon its request sufficient specifications, photographs, drawings and/or other information or samples for a determination by the Company of whether that brand of equipment complies with its specifications and standards. All signs must be purchased through the COMPANY’s approved supplier (which supplier may be the COMPANY or its affiliates) through any manner or method designated by the COMPANY. You may not sell or use any brand of any product which the Company has not previously approved or has designated as not being of equivalent quality to the Company’s private brand or designated brand of such product. |
| Franchisor Revenue from Suppliers | Our affiliates may receive from some parts suppliers a rebate of approximately 2% to 6% or more of purchases. During the 2021 fiscal year, our affiliates’ rebates totaled $80,453. During 2021, the Company did not receive any payments from designated and approved suppliers on account of franchisee purchases or leases of required and approved items from those suppliers. The Company and/or its affiliates may derive revenue based on your purchases and leases, including from charging you (at prices exceeding its and their costs) for services and products that the Company or its affiliates sell you and from promotional allowances, rebates, volume discounts, and other amounts paid to the Company and its affiliates by suppliers that the Company designates, approves, or recommends for some or all of the Company’s franchisees. |
Financing (Item 10)
| Detail | Information |
|---|---|
| Financing Available | No |
| Description | We do not offer direct or indirect financing. We do not guarantee your note, lease, or obligation. |
Merlin Franchisor SPV- Initial Application for Large Franchisor Exemption (ND and RI) Franchise Earnings — Item 19
Merlin Franchisor SPV- Initial Application for Large Franchisor Exemption (ND and RI) does not make an Item 19 financial performance representation in their FDD. This means they do not disclose revenue, profit, or earnings data for franchised locations. Before investing, ask the franchisor directly for franchisee contact information so you can speak with existing owners about their actual financial performance.
Merlin Franchisor SPV- Initial Application for Large Franchisor Exemption (ND and RI) does not include an Item 19 financial performance representation in their FDD. Contact information for current and former franchisees is listed in Item 20 of the FDD.
Merlin Franchisor SPV- Initial Application for Large Franchisor Exemption (ND and RI) Litigation & Risk Flags
2 Pending Actions ListedReview the full FDD for details on pending litigation.
Litigation and bankruptcy data is sourced from Items 3 and 4 of the FDD. Always verify current status directly from the most recent FDD.
Merlin Franchisor SPV- Initial Application for Large Franchisor Exemption (ND and RI) System Growth
Total Units
24
Franchised
24
Company-Owned
0
Merlin Franchisor SPV- Initial Application for Large Franchisor Exemption (ND and RI) currently operates 24 franchised locations and 0 company-owned units. Unit count data is sourced from Item 20 of the FDD.
Unit History (Item 20)
| Year | Opened | Closed | Total |
|---|---|---|---|
| 2019 | 0 | 2 | 28 |
| 2020 | 1 | 1 | 28 |
| 2021 | 0 | 4 | 24 |
Transfers: 5 | Closures: 4
State Registrations
Registered in 14 states: CA, HI, IL, IN, MD, MI, MN, NY, ND, RI, SD, VA, WA, WI
Franchisor Financials (Item 21)
Revenue
$208.8M
Net Income
$132.9M
Total Assets
$530.9M
Audited by Grant Thornton LLP for year ending December 25, 2021.
Merlin Franchisor SPV- Initial Application for Large Franchisor Exemption (ND and RI) Franchise — FAQ
The total investment to open a Merlin Franchisor SPV- Initial Application for Large Franchisor Exemption (ND and RI) franchise ranges from $262,300 to $531,000, per their Franchise Disclosure Document. This includes the initial franchise fee of $30,000. The investment covers build-out, inventory, equipment, signage, working capital, and other startup costs.
Merlin Franchisor SPV- Initial Application for Large Franchisor Exemption (ND and RI) charges a royalty fee of 6.9% of Net Revenues of gross sales, plus a 5% of Net Revenues contribution to the marketing/advertising fund. These fees are paid on an ongoing basis.
You can download the Merlin Franchisor SPV- Initial Application for Large Franchisor Exemption (ND and RI) Franchise Disclosure Document free on this page. The FDD is a public document filed with state franchise registries. Always also request the current FDD directly from Merlin Franchisor SPV- Initial Application for Large Franchisor Exemption (ND and RI) to ensure you have the most up-to-date version.
Merlin Franchisor SPV- Initial Application for Large Franchisor Exemption (ND and RI) does not provide an Item 19 financial performance representation in their FDD, which means they do not disclose franchisee revenue or earnings data. Prospective investors should contact existing franchisees directly (listed in Item 20 of the FDD) to gather real-world financial performance information.
Merlin Franchisor SPV- Initial Application for Large Franchisor Exemption (ND and RI) has been franchising since 1981. The FDD shows an investment range of $262,300-$531,000, a 6.9% of Net Revenues royalty, and includes an Item 19 earnings disclosure. There are 2 pending litigation action(s). Review the full FDD and contact current franchisees listed in Item 20 before making any investment decision.
The franchise fee is $30,000 and the total investment ranges from $262,300 to $531,000 depending on location size and market. A minimum of $31,800 in liquid capital is required. Contact the franchisor directly for current net worth and liquid capital requirements, territory availability, and application details.
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Data Source & Disclaimer: This website is for informational purposes only. It is not an offer to sell or buy a franchise. This profile is based on publicly available FDD data sourced from state franchise registry filings. All information is for research purposes only and does not constitute legal, financial, or investment advice. Data may be outdated or contain errors. Always obtain the current FDD directly from Merlin Franchisor SPV- Initial Application for Large Franchisor Exemption (ND and RI) and consult a qualified franchise attorney before making any investment decision. FranchiseOverview.com is operated by Franchising Compliance, LLC and is not affiliated with Merlin Franchisor SPV- Initial Application for Large Franchisor Exemption (ND and RI) or any of its subsidiaries. To report an inaccuracy: info@franchiseoverview.com