AAMCO Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
AAMCO is an automotive franchise specializing in transmission repair and drivetrain service, plus general car maintenance. Franchisees run service centers managing technicians, diagnostics, repairs, and warranty work.
FranchiseVerdict summary · 2026
A AAMCO franchise requires a total initial investment of $235K – $353K, including a $18K – $40K franchise fee and an ongoing 7.5% royalty[2]. Per the 2023 FDD, average unit revenue was $937K[2]. SBA 7(a) loans show a 28.5% charge-off rate across 586 loans[1]. FranchiseVerdict grade: C (Average), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2023 FDD issuance
Overview
- Investment
- $235K – $353K
- 33rd pct Automotive
- Avg gross sales
- $937K
- 7th pct Automotive
- Royalty
- 7.5%
- 33rd pct Automotive
- Units
- 560
- 47th pct Automotive
- SBA charge-off
- 28.5%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Automotive · color = vs category peers
Green = favorable by >10% vs Automotive avg · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $235K – $353K including a $40K franchise fee, 7.5% ongoing royalty.
- RETURNSAverage unit revenue of $937K/year (median $888K).
- RISKVerdict C (Average), verdict score 40/100 (higher is better). SBA loan charge-off rate of 28.5% across 586 loans (well above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- FLAGBankruptcy history disclosed in the FDD. Review Item 4 for details before proceeding.
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- AAMCO Transmissions, LLC
- Parent company
- Icahn Automotive Service Partners LLC (IASP)
- Ultimate parent
- Icahn Enterprises Holding, L.P. (IEP)
- Predecessor
- AAMCO Transmissions, Inc.
- Prior franchisor entity
- CEO title
- Vice President of Technology (with additional leadership/management duties for daily business activities since April 2023)
- Bruce Chidsey
- Incorporated in
- Pennsylvania
- HQ
- 410 Horsham Road, Suite 105, Horsham, Pennsylvania 19044
- Auditor
- RSM US LLP
- Audited financials
- Franchisor revenue
- $36.4M
- vs $32.3M prior year
Affiliated brands
- Cottman
- of IAS
- ADC
Other brands the franchisor or its parent operates (Item 1).
Overview
About
- CEO
- Bruce Chidsey
- Headquarters
- Pennsylvania
- Founded
- 1963
- FDD year
- 2023
- States available
- 47
Can you afford it, and what does the money buy?
Entry cost runs 69% below the typical automotive franchise.
Source: FDD 2023 · Items 5–7
Full Item 7 breakdown18 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial License Fee | $40K | $40K | |
| Business Coach Training | $10K | $10K | |
| Grand Opening Advertising Expenses | $3K | $3K | |
| AAMCO Security Deposit | $5K | $5K | |
| Travel Expenses for Training Programnot refundable | $2K | $4K | |
| Real Estate & Utility Deposits | $14K | $43K | |
| Leasehold Improvementsnot refundable | $10K | $14K | |
| Signsnot refundable | $8K | $30K | |
| Shop Equipment, Supplies, Lifts & Installationnot refundable | $78K | $98K | |
| POS System - Acquisitionnot refundable | $3K | $3K | |
| POS System - 3 months Access/Supportnot refundable | $500 | $500 | |
| Computers and Phone System - Hardwarenot refundable | $7K | $10K | |
| Office Furniturenot refundable | $6K | $7K | |
| Sales Materialsnot refundable | $500 | $1K | |
| Miscellaneous Costs & Professional Feesnot refundable | $4K | $10K | |
| Insurancenot refundable | $2K | $3K | |
| Advertising Costsnot refundable | $5K | $14K | |
| Additional Fundsnot refundable | $40K | $60K | |
| Total initial investment | $235K | $353K |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $235K – $353K
- Top 40% of category vs category
- Liquid capital req'd
- $40K – $60K
- Top 40% of category vs category
- Franchise fee
- $18K – $40K
- Top 40% of category vs category
- Royalty
- 7.5%
- percentage · typical 6–8%
- Ad fund
- National Creative Advertising Fund contribution of $150 p…
- Total fee load
- 7.5%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 7.5% of gross sales |
| Technology fee | $149 |
| Training fee | $10K |
| Transfer fee | $6K |
| Total fee load | 7.5% of rev |
What do units actually make?
Average unit sales run 36% below the automotive norm.
Source: FDD 2023 · Item 19
Single-unit · estimated
Returns at a glance
Indicative numbers using FDD Item 7 / Item 19 inputs and category-benchmarked cost ratios. Full single-unit, 25-unit portfolio, and LBO models (with every input editable to stress-test your own scenario) live on the financials page.
Store EBITDA · annual
$136K
14.5% margin
Unlevered ROIC
40%
EBITDA / total invested capital
Payback
30 mo
cash-on-cash, unlevered
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
What one unit earns on your invested capital
Model A · Single-Unit Return
Computes unlevered return on invested capital (ROIC) for a single franchise unit. The target band for an attractive franchise is 30–60% ROIC. Below that and a passive index fund likely outperforms; above that and the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses. It's the top line only. Operating costs below are category estimates. Override them to match your real lease quote, labor market, and build-out budget.
Returns model · single-unit ROIC
What would one AAMCO unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
40%
Within the 30–60% "attractive franchise" band
What 25 units return when you use SBA financing
Model B · Return on Equity: Debt-Financed Acquisition
Models a 25-unit portfolio acquisition financed with an SBA 7(a) loan. Shows equity IRR (your return on cash invested), DSCR (how safely the cash flow covers debt service), and the capital stack (SBA + seller + equity breakdown).
This is the “search fund” or “entrepreneurship through acquisition” scenario: you buy an existing multi-unit operator, use leverage to amplify returns, and either operate or hire management. The 25-unit size is the typical minimum for an SBA-backed franchise portfolio acquisition to pencil as a full-time income.
What “return on equity” means here: if you put in $500K of your own cash and the business generates enough EBITDA to pay down debt and grow, your equity IRR is the annual return on that $500K, including the value created when you eventually sell. Target IRR for a search fund is typically 25–35%.
Levered LBO scenario · Yale Crease Capital framing
What would 25 AAMCO units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$1.4M
on $7.0M purchase
Total debt
$5.6M
SBA $3.5M + senior + seller note
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2023 FDD
Financial Performance
- Avg gross sales
- $937K
- Per unit, per year
- Median gross sales
- $888K
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- gross sales
- Sample size
- 536
- vs category median 70 · large
- Range (low → high)
- $22K→$3.3M
- Cohort dispersion (min → max)
- Quartile band
- $466K→$1.5M
- Bottom 25% → top 25%
- Reporting year
- 2022
- Fiscal year the figures cover
- Source filing
- FDD 2023
- Disclosed in the 2023 filing, covering 2022
- Transparency
- 4 / 10
- vs category median 4 / 10 · typical
Compared against 167 Automotive brands
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Unit economics
Average unit generates $937K/year in gross sales. Revenue-to-investment ratio: 3.2x.
Fee burden
Total ongoing fee load of 7.5% — below the Automotive average of 9.3%.
Disclosure
Transparency score 4/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System contracting at -2.3% CAGR over 3 years. Investigate whether closures are franchisor-driven consolidation or franchisee exits.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Automotive averages
How AAMCO Compares
Is the system healthy?
Source: FDD 2023 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 560
- Opened
- 9
- Last reporting year
- Closed
- 12
- Terminated
- 3
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 2
- Term expired, not renewed (per Item 20)
- Turnover rate
- 3.1%
- Company-owned
- 13
- Corporate units in the system
- % franchised
- 98%
- vs corporate-owned
- Net growth (3-yr)
- -2.3%
- Net unit change over 3 years
- 3-yr CAGR
- -2.3%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 9
- Closed (3yr)
- 12
- Terminated (3yr)
- 3
- Non-renewed (3yr)
- 2
- Transfers (3yr)
- 37
- Reacquired (3yr)
- 0
- Franchisor bought back
- Termination rate
- 3.4%
- Franchisor-initiated terminations
- Ceased ops
- 75.9%
- Units that stopped operating
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 47 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator. Not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 586
- Loan volume
- $155.9M
- Median loan
- $175K
- 50th percentile
- Charge-off rate
- 28.5%
- rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- 71.5%
- 5-yr charge-off
- 5.6%
- Loans approved 2021+
- Active lenders
- 160
- Defaults
- 116
- Typical loan rate
- 7.1%
- avg rate to borrowers
- Franchised industry avg
- 34.0%
- brand beats franchise avg ↓
- Jobs supported
- 1,922
- 1.6 per loan
- Lender concentration
- 13%
- top lender's share
Borrower mix: 47% went to startups / new businesses, 53% to established operators
Franchise vs independent — in automotive transmission repair, franchised businesses charge off at 34.0% vs 19.2% for independents — franchising is associated with 77% higher SBA default risk in this category.
Vintage analysis
AAMCO charge-off rate by loan vintage
Top lenders financing AAMCO franchisees
Showing 3 of 160 lenders. The full breakdown — every lender, state distribution, interest rates & risk ratings — is in the SBA Lending Report below.
Explore lender portfolios on Bank Reports or regional data on State Reports.
Premium insight
SBA Lending Report
Deep-dive into AAMCO's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 10 lenders with concentration factor
- Per-state charge-off rates across 15 states
- Startup risk premium and job creation velocity
- 34-year lending trend
- SBA 504 real estate/equipment data
Instant access. No subscription.
A 28.5% charge-off rate means roughly 1 in 4 franchisees failed to repay their SBA loan. Investigate what changed.
What could kill this investment?
SBA loans charge off at 28.5% — 78% above the 16.0% national norm, i.e. higher lender-observed risk.
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
Risk & Legal
AAMCO presents HIGH RISK due to a contracting franchise system, pervasive litigation involving consumer fraud and franchisee disputes, absent profitability disclosure, unprotected territory, and false going concern status—indicating franchisor instability and deteriorating unit economics.
Litigation (Item 3)
Pending: Chambers v. Montileone Industries & AAMCO (MO, consumer fraud class re: salvaged transmissions); AAMCO v. Silverking Business Corp (JAMS arbitration to recover fees, with franchisee counterclaims). Concluded: Morristown Transmissions v. 2 JOS (settled, $200,000 from AAMCO/affiliates); Reddoch & Saylor arbitrations (Group Resolution settlement); Adeniyi & Jones (dismissed/Group Resolution); regulatory consent orders with Virginia ($10,000 penalty), Washington, Illinois ($2,000), and older multi-state/NY/MN/CA judgments. Franchisor-initiated arbitrations and court actions since 1/1/2022 (Kaur, Moffa, Putnam, Stupar, Bell, Anderson, Mullet arbitrations; Hoang and LJ Automotive collection actions; Up To Parr non-compete action) to recover past-due fees and enforce non-competes.
Largest disclosed settlement: $200,000
Bankruptcy (Item 4)
Disclosed in last 7 years
In January 2023, affiliate Auto Plus (IEH Auto Parts LLC) and certain related affiliates filed voluntary Chapter 11 petitions in the U.S. Bankruptcy Court for the Southern District of Texas. No bankruptcy of AAMCO itself disclosed.
Audited financials (Item 21)
Yes · RSM US LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
Score breakdown · what drove the 40 / 100 verdict
- 01MEDSystem contracting at -1.4% YoY with 560 units suggests market saturation or operational challenges in core transmission repair business
- 02HIGHSignificant litigation history including two pending consumer fraud allegations, concluded franchisee disputes over misrepresentation, and 10 franchisor enforcement actions in 2022-2023 indicate systemic relationship issues
- 03MINORNo Item 19 (average net income) disclosure despite $937K average revenue prevents ROI validation; 7.5% royalty on gross receipts with unknown profitability creates opaque financial picture
- 04HIGHGoing Concern status is FALSE, which is concerning for a 560-unit franchise and suggests potential franchisor financial instability or operational distress
- 05MINORNo protected territory with declining unit count increases cannibalization risk and competitive pressure on unit-level economics
- 06MEDHigh cumulative investment ($234.8K-$353.2K) relative to undisclosed net income creates unfavorable risk-reward asymmetry
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 7.5% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2023 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 15 years |
|---|---|
| Renewal term | 15 years |
| Allowed renewalsℹ | 1 |
| Territory type | none |
| Protected territory | No |
| Exclusive territoryℹ | No |
| Territory population | 100,000 |
| Online sales rights | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 10 mi |
| Right of first refusalℹ | Yes |
| RoFR response window | 30 days |
| Transfer requires consent | Yes |
| Termination notice | 10 days |
| Curable defaultsℹ | 2 |
| Mandatory arbitration | Yes |
| Arbitration location | Philadelphia, Pennsylvania |
| Jury trial waiver | Yes |
| Governing law | Pennsylvania |
| Litigation count | 23 |
View Item 3 litigation summary
Pending: Chambers v. Montileone Industries & AAMCO (MO, consumer fraud class re: salvaged transmissions); AAMCO v. Silverking Business Corp (JAMS arbitration to recover fees, with franchisee counterclaims). Concluded: Morristown Transmissions v. 2 JOS (settled, $200,000 from AAMCO/affiliates); Reddoch & Saylor arbitrations (Group Resolution settlement); Adeniyi & Jones (dismissed/Group Resolution); regulatory consent orders with Virginia ($10,000 penalty), Washington, Illinois ($2,000), and older multi-state/NY/MN/CA judgments. Franchisor-initiated arbitrations and court actions since 1/1/2022 (Kaur, Moffa, Putnam, Stupar, Bell, Anderson, Mullet arbitrations; Hoang and LJ Automotive collection actions; Up To Parr non-compete action) to recover past-due fees and enforce non-competes.
Items 10, 11
Training & Operations
- Classroom training
- 145 hrs
- On-the-job training
- 240 hrs
- Training location
- AAMCO University, Newnan, Georgia
- Ongoing training
- Required
- Time to open
- 3 mo
- From signing to launch
- Site selection
- franchisee selects, AAMCO approves
- Franchisor financing
- Not offered
- Item 10
- POS system
- AAMCO POS System (FileMaker Pro based)
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: AAMCO POS System (FileMaker Pro based)
Item 20 · call current owners
Franchisee Contacts
559 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
AAMCO · FDD (2023) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a AAMCO franchise?
The total investment to open a AAMCO franchise ranges from $235K – $353K, with an initial franchise fee of $40K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do AAMCO franchise owners earn?
According to Item 19 of the AAMCO FDD, the average gross sales per unit is $937K. The median is $888K. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Item 19 in the AAMCO FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the AAMCO FDD and qualifies whose outlets they describe.
What is AAMCO's franchise failure rate?
Based on SBA 7(a) loan data, AAMCO has a charge-off rate of 28.5% across 586 loans, meaning 28.5% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
How many AAMCO franchise locations are there?
As of their most recent FDD filing, AAMCO has 560 total units in the United States, including 547 franchised units and 13 company-owned units. 9 new units were opened in the latest reporting year.
Is AAMCO a good franchise to buy?
FranchiseVerdict rates AAMCO as a C-grade franchise with a verdict score of 40 out of 100 (higher is better), based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.