Buying an Oil Change Franchise – How to Evaluate Oil Change Franchises for Purchase

Companies who opt to grow their businesses through franchising are increasing in number every year. Equally growing, is the number of people who want to own their own franchise, revealing that franchising is not only a viable option to owning your own business, but is often times a very lucrative one. Here we’ll specifically examine oil franchises and discuss important questions to address during the evaluation process of becoming a franchisee.

Oil Change Franchises: What Are They, and Why Think About Buying One?

As long as people drive cars, the oil change franchising business will remain a non-seasonal industry that will always be in demand. If you’ve never heard of oil change franchising, the concept is simple. It allows you, the franchisee to operate a well known oil change franchising business from a larger company, or franchiser. In other words, you get to operate your own oil change franchising company that already bears a reputable, well known name.

Considering the Factors

Profitability – The first question many naturally ask is, “how much money can I make with an oil change franchise?” The answer to this is of course dependent on a number of variables, but in general, a franchisee in any industry shouldn’t expect to make much until the second year. You can find a range of incomes listed in a “FDD” provided by most franchisers, but the best way to get an idea of how much potential there is with any oil change franchise is to meet and talk with their various locations. The success of your particular franchise will in part be determined by location, marketing and your personal level of commitment to making profit.

Required Investment – It is crucial to obtain as clear an idea as is possible of what upfront costs will be required in operating your franchise until it generates profit. The FDD will help you to generally estimate these figures; however, speaking with as many current oil change franchisees of several different franchisers will be the most revealing. Some franchisers such as Costa Oil offer financial assistance as well as assistance with site selection, operation and marketing. Evaluating various oil change franchises on the basis of the quantity and quality of this support is equally important as looking at the initial investment.


Funding protocol is generally applicable across the board and is typically non-specific to oil change franchisers. Potential financing options include:

Regular bank loan, usually secured with collateral such as home equity

SBA (Small Business Association) loan

Business Partnering (Eliciting partnership with a investor who has the monetary means to cover start up costs)

IRA or 401k withdrawal. There are companies who assist with drawing upon these funds without penalties, for purposes of buying a franchise.

Friends and Family Loans

Most franchisers and banks do require that you cover at least a portion of the upfront costs in cash, which is known as “having skin in the game.”

Financial Strength

The financial strength of an oil change franchise is an important, if not obvious criterion during the research phase of becoming a franchisee. A franchise company that is in stable or prosperous financial position is poised to devote more time, money and over all assistance to its franchisees, and will be more able to support its long term survival. A financially sound company can provide resources to aid with branding and with making modifications and improvements to overall operation.

A company’s financial success speaks not only to the increased resources it may be provide you, but to the popularity of the company brand; its effectiveness in generating sales and profit. Your franchiser should be able to provide financial statements, but don’t be afraid to seek council if you need help interpreting them.

Many, many businesses owners have found success in the oil franchise business. But remember, when it comes to making a decision between opening an independent business or buying into a franchise system, you can only estimate so far. To make the right decision, you’ll have to take stock of your personality, including risk tolerance, ambition, working and learning style.

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