Carstar vs Merlin
Carstar vs Merlin: Carstar costs $150K to $2.5M to open; Merlin costs $262K to $531K. Carstar has 102 units, Merlin has 61. SBA loan history: Carstar = 118 loans (3.4% default); Merlin = 74 loans (12.2% default). The franchise with more SBA funded units, a lower SBA default rate, and a lower royalty load is the safer financing bet; see the comparison below.
Carstar vs Merlin: Capital, Scale & Lending Analysis
Analysis based on FDD filings and SBA 7(a) loan level data. Each pairing reflects a unique combination of capital intensity, system scale, and financing path.
Capital Intensity
Carstar requires the lower minimum capital commitment ($150K vs $262K for Merlin), a 43% spread. Initial franchise fees come in at $20K for Carstar versus $30K for Merlin, Carstar has the lower entry fee. Ongoing royalty load is 5% for Carstar and 6.9% for Merlin, giving Carstar the lighter per-unit drag on operating income.
System Scale & Tenure
On scale, Carstar operates 102 units to Merlin's 61. Merlin has been operating 51 years (founded 1975) versus 37 for Carstar (founded 1989), a 14-year tenure gap that affects unit-economics maturity and FDD revision history.
SBA Lending Profile
Carstar has the deeper SBA lending track record, with 118 7(a) approvals compared with 74 for Merlin. Carstar's peak SBA year was 2021 (16 loans); Merlin's peak was 1999 (9 loans). Carstar's more recent peak generally indicates fresher lender appetite. Carstar has the most SBA funded units in TX, with 11. Merlin leads in IL, with 61. Borrowers should pick the brand whose strongest SBA state matches their own state for warmer lender introductions. Average SBA loan size on funded Carstar deals is $859K vs $236K for Merlin, useful as a sizing anchor when modeling your own unit.
Risk Signal
SBA default rates are 3.4% for Carstar and 12.2% for Merlin, Carstar has the cleaner SBA loss record by 8.8 points. PeerSense FPI scores come in at 56 (Moderate) for Carstar and 23 (Fair) for Merlin, giving Carstar the stronger composite signal across SBA performance, lender appetite, and operational consistency.
Health & Performance
FPI Score | 56/100 | 23/100 |
Health Tier | Moderate | Limited |
Confidence | N/A | N/A |
Lending Trend | Declining | Declining |
SBA Lending
SBA Loans | 118 | 74 |
SBA Volume | – | – |
Default Rate | 3.4% | 12.2% |
Peer Tier | major | established |
Investment & Costs
Total Investment | $150K to $2.5M | $262K to $531K |
Franchise Fee | $20K | $30K |
Royalty Rate | 5% | 6.9% |
Ad Fund | 2% | 5% |
Liquid Capital | N/A | N/A |
Net Worth Required | $500K | N/A |
Financial Performance (Item 19)
Item 19 Status | Disclosed | Not Disclosed |
System Size & Operations
Total Units | 102 | 61 |
Franchised Units | 102 | 61 |
Company Owned | – | – |
Term Length | 10 yrs | 20 yrs |
Brand Information
Year Founded | 1989 | 1975 |
Franchising Since | 1989 | N/A |
Years Franchising | 37 yrs | N/A |
Headquarters | ANAHEIM, CA | Charlotte, NC |
Category | General Automotive Repair | General Automotive Repair |
Website | ||
FDD Year | 2025 | N/A |
Which Is Better, Carstar or Merlin?
Lower upfront capital required
Tie
Carstar: $150K starting · Merlin: $262K starting
More SBA lender confidence
Carstar
Carstar: 118 SBA loans · Merlin: 74 SBA loans
Lower SBA default rate
Carstar
Carstar: 3.4% · Merlin: 12.2%
Larger system & brand presence
Tie
Carstar: 102 units · Merlin: 61 units
Lower ongoing royalty load
Carstar
Carstar: 5% · Merlin: 6.9%
More lender financing options
Carstar
Carstar: 72 unique lenders · Merlin: 24 unique lenders
Decision matrix uses publicly disclosed FDD and SBA loan data. Not a recommendation. Your best franchise depends on capital, market, operating capacity, and risk tolerance.
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About These Franchises
Carstar vs Merlin: Franchise Funding Comparison
Comparing Carstar and Merlin is about more than brand preference. It's about which franchise fits your financial profile and funding strategy. Investment ranges from $150K to $2.5M.
Carstar has 118 SBA loans on record and Merlin has 74. Those totals are cumulative history rather than a measure of current appetite. Recent lending activity is trending down for at least one of these brands, so current lender appetite has to be checked deal by deal rather than assumed from the totals.
SBA 7(a) loans are the most common franchise funding vehicle, offering up to $5M with as little as 10% down. PeerSense connects franchise buyers with the specific lenders who have approved loans for these brands, not generic referrals, but lenders with actual franchise lending track records.
Data sourced from SBA loan records, Franchise Disclosure Documents, and public filings. Updated regularly. Not financial advice, consult with a lending professional before making investment decisions.
Carstar vs Merlin, Frequently Asked Questions
Which is a better franchise investment, Carstar or Merlin?
How much does a Carstar franchise cost compared to Merlin?
Can I finance Carstar or Merlin with an SBA loan?
Which has a lower SBA default rate, Carstar or Merlin?
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Page Review
Reviewed by Edward L. Freeman, Founder and Managing Director, PeerSense
- PeerSense is a capital advisory firm that places commercial financing with direct capital sources; the capital source sets final terms.
- Edward L. Freeman founded PeerSense in January 2020.
- He is a Registered Franchise Consultant with Business Alliance, Inc., a credential issued in March 2022, and worked as a franchise consultant there from March 2022 to May 2023.
- His recorded experience includes a $22 million SBA construction loan, with about $16 million funded on the deal.
- In the 12 months through September 30, 2026, PeerSense tracked 912 publicly announced financings with a disclosed size of $361.32 billion. PeerSense Capital Data Report · Methodology page
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