Carstar Franchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
CARSTAR is an automotive collision-repair franchise handling insurance-claim auto body work, painting, and frame repair. Franchisees run body shops managing technicians, insurance coordination, parts, and quality control.
FranchiseVerdict summary · 2026
A CARSTAR franchise requires a total initial investment of $298K – $804K, including a $10K franchise fee. Per the 2025 FDD, average unit revenue was $3.2M[2]. SBA 7(a) loans show a 0.0% charge-off rate across 40 loans[1]. FranchiseVerdict grade: A (Strongest tier), an editorial assessment, not investment advice. Run a live ROI scan →
Data last verified · figures per the 2025 FDD issuance
Overview
- Investment
- $298K – $804K
- 39th pct Automotive
- Avg gross sales
- $3.2M
- 20th pct Automotive
- Royalty
- N/A
- Units
- 471
- 46th pct Automotive
- SBA charge-off
- 0.0%
- % 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 $298K – $804K including a $10K franchise fee.
- RETURNSAverage unit revenue of $3.2M/year (median $2.6M).
- RISKVerdict A (Strongest tier), verdict score 95/100 (higher is better). SBA loan charge-off rate of 0.0% across 40 loans (well below the franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
Item 1 · who you're contracting with
The Franchisor
Corporate structure & franchisor financials
- Legal entity
- CARSTAR Franchisor SPV LLC
- Parent company
- Driven Systems LLC
- Ultimate parent
- Driven Brands Holdings Inc.
- Predecessor
- CARSTAR Franchise Systems, Inc. (CSI)
- Prior franchisor entity
- CEO title
- Manager, Chief Executive Officer and President
- Daniel Rivera
- Incorporated in
- DE
- HQ
- 440 South Church Street, Suite 700, Charlotte, North Carolina 28202
- Auditor
- PricewaterhouseCoopers LLP
- Audited financials
- Franchisor revenue
- $270.2M
- vs $289.7M prior year
Overview
About
- CEO
- Daniel Rivera
- Headquarters
- NC
- Founded
- 1989
- FDD year
- 2025
- States available
- 39
Can you afford it, and what does the money buy?
Entry cost runs 41% below the typical automotive franchise.
Source: FDD 2025 · Items 5–7
FDD Item 7 · 2025 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $10K | $10K |
| Working capital (3–6 mo) | $10K | $84K |
| Equipment, build-out, other | $278K | $710K |
| Total initial investment | $298K | $804K |
Source: CARSTAR 2025 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $298K – $804K
- Top 40% of category vs category
- Liquid capital req'd
- $10K – $84K
- Top 40% of category vs category
- Franchise fee
- $10K – $10K
- Top 40% of category vs category
- Royalty
- Monthly Base Franchise Fee (greater of $1,000 or 1.5% of …
- Ad fund
- 1.0%
- typical 3–5%
- Total fee load
- 2.5%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Marketing / ad fund | 1.0% of gross sales |
| Training fee | $299 |
| Transfer fee | $0 |
| Renewal fee | $1K |
| Inventory (initial) | $5K – $50K |
| Total fee load | 2.5% of rev |
A 2.5% total fee load is unusually lean. More of each revenue dollar stays with the franchisee.
What do units actually make?
Average unit sales run 120% above the automotive norm.
Source: FDD 2025 · 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
$577K
18.0% margin
Unlevered ROIC
96%
EBITDA / total invested capital
Payback
12 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 CARSTAR unit return on the cash you put in?
Unlevered ROIC · per unit
Estimated return on your total franchise investment, before any debt financing.
96%
Above the 30–60% band. Verify revenue is per-unit average
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 CARSTAR units return on equity?
Equity IRR · 5-yr
24.9%
3.03× MOIC
Year-1 DSCR
3.40×
EBITDA ÷ debt service
Equity required
$19.7M
on $35.3M purchase
Total debt
$15.6M
SBA $5.0M + 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: 2025 FDD
Financial Performance
- Avg gross sales
- $3.2M
- Per unit, per year
- Median gross sales
- $2.6M
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
- 397
- vs category median 70 · large
- Range (low → high)
- $115K→$18.6M
- Cohort dispersion (min → max)
- Reporting year
- 2024
- Fiscal year the figures cover
- Source filing
- FDD 2025
- Disclosed in the 2025 filing, covering 2024
- Transparency
- 4 / 10
- vs category median 4 / 10 · typical
Compared against 167 Automotive brands
Revenue is 5.8x the investment midpoint. At typical franchise margins, this suggests a payback under 3 years.
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 $3.2M/year in gross sales. Median is $2.6M — top performers pull the average up, so a typical unit earns less. Revenue-to-investment ratio: 5.8x.
Fee burden
Total ongoing fee load of 2.5% — 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 expanding at 5.6% CAGR over 3 years across 471 units — operators are staying and new ones are joining.
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 Carstar Compares
Is the system healthy?
Source: FDD 2025 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 471
- Opened
- 48
- Last reporting year
- Closed
- 32
- Turnover rate
- 6.8%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (3-yr)
- +5.6%
- Net unit change over 3 years
- 3-yr CAGR
- +5.6%
- Compounded over last 3 years
3-year detail · Item 20
- Opened (3yr)
- 48
- Closed (3yr)
- 0
- Terminated (3yr)
- 31
- Non-renewed (3yr)
- 1
- Transfers (3yr)
- 16
- Reacquired (3yr)
- 0
- Franchisor bought back
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 41 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
- 40
- Loan volume
- $44.2M
- Median loan
- $762K
- 50th percentile
- Charge-off rate
- 0.0%
- 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)
- 100.0%
- 5-yr charge-off
- 0.0%
- Loans approved 2021+
- Active lenders
- 26
- Defaults
- 0
- Typical loan rate
- 7.0%
- avg rate to borrowers
- Franchised industry avg
- 17.2%
- brand beats franchise avg ↓
- Jobs supported
- 577
- 1.3 per loan
- Lender concentration
- 13%
- top lender's share
Borrower mix: 31% went to startups / new businesses, 69% to established operators
Franchise vs independent — in automotive body, paint, and interior repair and , franchised businesses charge off at 17.2% vs 13.5% for independents — franchising is associated with 27% higher SBA default risk in this category.
Vintage analysis
Carstar charge-off rate by loan vintage
Top lenders financing Carstar franchisees
Showing 3 of 26 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 Carstar'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
- 10-year lending trend
- SBA 504 real estate/equipment data
Instant access. No subscription.
With a 0.0% charge-off rate across 40 loans, banks have historically viewed this brand favorably for lending.
What could kill this investment?
SBA loans charge off at 0.0% — 100% below the 16.0% national norm, i.e. lower 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
CARSTAR presents meaningful caution-level risk due to undisclosed profitability, escalating royalty structures, parent company litigation involving securities fraud allegations, and slow unit growth despite high average unit volumes.
Litigation (Item 3)
3 CARSTAR-initiated breach/noncompete actions; 3 pending parent (Driven Brands Holdings) securities and derivative actions; 2 concluded actions (Gabbay settlement $10K paid; Canada affiliate CAN$438K settlement). Affiliate actions for Arby's and Dunkin' no-poaching settlements also disclosed.
Largest disclosed settlement: $10,000
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · PricewaterhouseCoopers LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
ⓘ These are the parent company's consolidated financials (the parent guarantees the franchisor), not this brand's standalone results — the figure reflects the whole corporate group, not this brand alone.
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: Yes
- Must buy proprietary products: Yes
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 95 / 100 verdict
- 01HIGHParent company involved in multiple pending litigation matters including putative class action securities fraud and five derivative complaints against officers/board members, indicating governance and disclosure concerns
- 02MINORTiered royalty structure (1.5% base + 4% growth fee) creates escalating costs as sales increase, potentially capping franchisee profitability and creating misaligned incentives
- 03MINORFlat unit growth of only 3.5% YoY in a mature auto body repair market suggests market saturation or franchisee dissatisfaction
- 04MINORThree franchisor-initiated breach of contract and non-compete lawsuits indicate aggressive enforcement and potential disputes over territory/operational control
- 05MINORAffiliate settlements (Arby's, Dunkin') on no-poaching and data privacy suggest systemic corporate compliance issues that may extend to CARSTAR operations
Severity inferred from the FDD text · not a regulatory classification
What are you signing up for?
Ongoing fees run about 2.5% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2025 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 5 years |
|---|---|
| Renewal term | 5 years |
| Allowed renewalsℹ | 1 |
| Territory type | protected |
| Protected territory | Yes |
| Exclusive territoryℹ | No |
| Territory radius | 1 mi |
| Online sales rightsℹ | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 1 year |
| Right of first refusalℹ | Yes |
| RoFR response window | 90 days |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | No |
| Jury trial waiver | Yes |
| Governing law | NC |
| Litigation count | 8 |
View Item 3 litigation summary
3 CARSTAR-initiated breach/noncompete actions; 3 pending parent (Driven Brands Holdings) securities and derivative actions; 2 concluded actions (Gabbay settlement $10K paid; Canada affiliate CAN$438K settlement). Affiliate actions for Arby's and Dunkin' no-poaching settlements also disclosed.
Items 10, 11
Training & Operations
- Classroom training
- 16 hrs
- On-the-job training
- 4 hrs
- Training location
- Charlotte, North Carolina or another location CARSTAR designates
- Ongoing training
- Required
- Site selection
- Franchisee proposes, franchisor must approve
- Franchisor financing
- Not offered
- Item 10
- POS system
- CARSTAR Solution (CCC One Innovate or CCC One Perform with Mitchell MRC)
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: CARSTAR Solution (CCC One Innovate or CCC One Perform with Mitchell MRC)
Item 20 · call current owners
Franchisee Contacts
542 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
CARSTAR · FDD (2025) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a CARSTAR franchise?
The total investment to open a CARSTAR franchise ranges from $298K – $804K, with an initial franchise fee of $10K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do CARSTAR franchise owners earn?
According to Item 19 of the CARSTAR FDD, the average gross sales per unit is $3.2M. The median is $2.6M. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Item 19 in the CARSTAR 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 CARSTAR FDD and qualifies whose outlets they describe.
What is CARSTAR's franchise failure rate?
Based on SBA 7(a) loan data, CARSTAR has a charge-off rate of 0.0% across 40 loans, meaning 0.0% 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 CARSTAR franchise locations are there?
As of their most recent FDD filing, CARSTAR has 471 total units in the United States, including 471 franchised units and 0 company-owned units. 48 new units were opened in the latest reporting year.
Is CARSTAR a good franchise to buy?
FranchiseVerdict rates CARSTAR as a A-grade franchise with a verdict score of 95 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.
For franchisors
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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.