Stem Guys Tire SuppliesFranchise Cost, Revenue & Review 2026
Data from FDD filing
FranchiseVerdict summary · 2026
A Stem Guys Tire Supplies franchise requires a total initial investment of $91K – $237K, including a $50K franchise fee and an ongoing 7.0% royalty[2]. Per the 2025 FDD, average unit revenue was $433K[2]. Verdict grade: A. Run a live ROI scan →
Data last verified June 21, 2026 · figures per the 2025 FDD issuance
Overview
- Investment
- $91K – $237K
- 10th pct Automotive
- Avg gross sales
- $433K
- 4th pct Automotive
- Royalty
- 7.0%
- 18th pct Automotive
- Units
- 1
- 0th pct Automotive
- SBA default
- N/A
Quick verdict · Automotive · color = vs category peers
Green = >15% above Automotive avg · No shading = within ±15% · Red = >15% below avg · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Started franchising in 2024. Newer systems carry more uncertainty but may offer better territories.
72% cash-on-cash return (based on P&L Bottom Line). Above the 20% threshold most investors target.
Bottom line
- Total investment $91K – $237K including a $50K franchise fee, 7.0% ongoing royalty.
- Average unit revenue of $433K/year, with an estimated 72% cash-on-cash return (based on P&L Bottom Line).
- Verdict A (Top Quintile) with a risk score of 42/100.
- Revenue data based on only 1 reporting unit. Treat as directional, not definitive. Ask franchisees directly for current unit economics.
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- Stem Guys Tire Supplies LLC
- CEO title
- President and CEO
- Richard Leland
- Incorporated in
- CA
- HQ
- 364 Fremont Peak Drive, Brentwood, CA 94513
- Auditor
- DA Advisory Group
- Audited financials
Overview
About
Stem Guys franchisees operate retail tire supply shops selling tire stems, valves, and related accessories to automotive service centers, dealerships, and DIY customers. Day-to-day operations include inventory management, customer sales, and potentially installation or consulting services for tire maintenance products.
- CEO
- Richard Leland
- Headquarters
- CA
- Founded
- 2024
- FDD year
- 2025
- States available
- 1
FDD Item 7 · 2025 filing · 14 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Feenot refundable | $50K | $50K | |
| Travel and Living Expenses While Training | $500 | $5K | |
| Storage | $500 | $2K | |
| Vehicle | $5K | $87K | |
| Decals | $1K | $5K | |
| Management and Technology System | $1K | $5K | |
| Opening Inventory | $18K | $36K | |
| Uniforms | $200 | $500 | |
| Office Supplies | $200 | $600 | |
| Grand Opening Marketing | $0 | $4K | |
| Business Licenses and Permits | $1K | $5K | |
| Professional Fees | $3K | $5K | |
| Insurance | $1K | $3K | |
| Additional Funds (3 months) | $10K | $30K | |
| Total initial investment | $91K | $237K |
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.
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
$74K
17.0% margin
Unlevered ROIC
40%
EBITDA / total invested capital
Payback
30 mo
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $91K – $237K
- Better than avg vs category
- Liquid capital req'd
- $10K – $30K
- Better than avg vs category
- Franchise fee
- $50K – $50K
- Better than avg vs category
- Royalty
- 7.0%
- percentage_of_gross · typical 6–8%
- Ad fund
- 1.0%
- typical 3–5%
- Total fee load
- 8.0%
- vs 9–13% typical
- Payback period
- 1.4 yrs
- From FDD / Item 19
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 7.0% of gross sales |
| Marketing / ad fund | 1.0% of gross sales |
| Technology fee | $1K |
| Transfer fee | $10K |
| Renewal fee | $10K |
| Total fee load | 8.0% of rev |
Financial Performance
- Avg gross sales
- $433K
- Per unit, per year
- Median gross sales
- N/A
- Avg p&l bottom line
- $118K
- Reported as P&L Bottom Line in FDD Item 19
- Cash-on-cash
- 71.8%
- Based on P&L Bottom Line / investment midpoint
- Item 19 type
- Company Owned Outlet
- Sample size
- 1 units
- vs category median 70 · small
- Range (low → high)
- $376K→$490K
- Cohort dispersion (min → max)
- Reporting year
- 2024
- Fiscal year the figures cover
- Transparency
- 9 / 5
- vs category median 4 / 5 · above
Compared against 221 Automotive brands
vs Automotive averages
How Stem Guys Tire Supplies Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 1
- Opened
- 0
- Last reporting year
- Closed
- 0
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 0.0%
- Company-owned
- 1
- Corporate units in the system
- % franchised
- 0%
- vs corporate-owned
3-year detail · Item 20
- Transfers (3yr)
- 0
- Projected new
- 0
- Franchisor's next-year forecast
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 12 · 1 state reported
The Territory Map
FDD Item 12 reports the state count, but the specific list isn't in our current data. The map will appear once we re-extract from the FDD or enough franchisee contacts are available.
1
states with franchisees (per FDD Item 12)
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
No SBA loan data available for this brand.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Stem Guys presents extreme risk due to going concern status, single-unit system, absence of financial disclosures, and unproven scalability in a niche tire supplies market.
Litigation (Item 3)
No litigation information required to be disclosed
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · DA Advisory Group
Supplier relationship · Items 8 & 16
- Franchisor sells you products: Yes
- Kickbacks from required suppliers: Yes
- Must buy proprietary products: No
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 42 / 100 rating
- 01HIGHGoing Concern status is FALSE — indicates franchisor financial instability or operational viability concerns
- 02MINOROnly 1 unit in system with unknown growth trajectory — suggests early-stage, unproven concept or system collapse
- 03MEDNo Item 19 (Financial Performance Representations) disclosed — cannot independently verify claimed $439K revenue and $118K net income figures
- 04MINORHigh franchise fee ($49,500) relative to single-unit track record — disproportionate upfront cost for unvalidated business model
- 05MINOR7% royalty on gross revenue (not net) — franchisee bears revenue risk while franchisor takes fixed percentage regardless of profitability
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 5 years |
| Allowed renewalsℹ | 2 |
| Territory type | Number of shops or radius |
| Protected territory | Yes |
| Exclusive territoryℹ | Yes |
| Territory radius | 60 mi |
| Online sales rights | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Right of first refusalℹ | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | Yes |
| Jury trial waiver | Yes |
| Governing law | California |
| Litigation count | 0 |
View Item 3 litigation summary
No litigation information required to be disclosed
Items 10, 11
Training & Operations
- Classroom training
- 21 hrs
- On-the-job training
- 0 hrs
- Training location
- On-site and at franchisor location
- Ongoing training
- Required
- Time to open
- 3 mo
- From signing to launch
- POS system
- Business Management and Technology System
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Business Management and Technology System
Item 20 · call current owners
Franchisee Contacts
1 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Stem Guys Tire Supplies · FDD (2025) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Stem Guys Tire Supplies franchise?
The total investment to open a Stem Guys Tire Supplies franchise ranges from $91K – $237K, with an initial franchise fee of $50K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Stem Guys Tire Supplies franchise owners earn?
According to Item 19 of the Stem Guys Tire Supplies FDD, the average gross sales per unit is $433K. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Stem Guys Tire Supplies's franchise failure rate?
SBA 7(a) loan charge-off data is not available for Stem Guys Tire Supplies (fewer than 10 loans on file). Charge-off rates are one way to gauge franchise risk, but not all franchise loans go through the SBA program. We recommend reviewing turnover and closure data in the FDD and speaking with current franchisees.
How many Stem Guys Tire Supplies franchise locations are there?
As of their most recent FDD filing, Stem Guys Tire Supplies has 1 total units in the United States, including 0 franchised units and 1 company-owned units.
Is Stem Guys Tire Supplies a good franchise to buy?
FranchiseVerdict rates Stem Guys Tire Supplies as a A-grade franchise with a risk score of 42 out of 100, 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.