AUTOMOTIVE FRANCHISING FEATURE
It’s hard to picture a lifestyle without a car. It’s become a part of every American’s day; rush hour fills our mornings and evenings, carpooling is a well-known practice and families depend on cars to simply pick up the milk.
Though public transportation is a typical part of every big city, the average American drives 2.28 cars. It has become a necessary part of commute for most citizens.
That being said, maybe car dealerships and franchises are the best investment for those looking for a profitable and successful business plan. Of course, the car dealership took a heavy hit during the recession, but it bounced back easily and brands were never hindered by the slow economic growth of that time.
The automotive industry is one of the most profitable franchises to consider and it comes with a plethora of business models that peak different interests, profits, strengths and weaknesses.
There are many car enthusiasts out there who would love to be a part of the automotive industry on some level, while there are individuals who have a background in repair and who like to approach a different venue within their field. Either way, you do not need background in sales or the auto industry to pursue a franchise in the field, though a good grasp on business and cars would be beneficial.
One area of operations in the vehicle industry is automotive repair, which covers a lot of bases. Repair could simply focus on the upkeep and repair of vehicles, which is an ever growing business nowadays.
People used to consider cars a luxury, replacing them often because they truly loved the idea of a new car. Nowadays, a lot of consumers consider a car a means of transportation and that’s it. A vehicle’s worth is measured by it’s capacity and function, rather than a prized possession. Now some people are investing in high end cars and luxury vehicles, but the majority of Americans are mainly focused on getting from A to B.
That being said, car ownership is lasting a lot longer than before. People are investing in repairs rather than replacements. Why buy a new car when you can just buy a new set of breaks?
An issue with car repair franchises is the competition. Local maintenance shops that have a great reputation may actually be more popular than a branded repair franchise. In the car maintenance industry, individuals are very dependent on who they trust, rather than branding.
Therefore, those interested in the industry should consider some serious ground work before investment. An environmental scan of the area should be well researched, with an understanding of the community and where consumers gravitate at the moment.
With cars advancing in technology, maintenance involves specific tools and training. Therefore, a lot of cars are dependent on their exact dealership for parts and maintenance. This consideration would be reliant on research as well. Can you find a franchise that specializes in all type of technological advancements? How many dealership repair shops are in your direct line of competition?
Meeting with a current franchise owner, as well as a local business, may be helpful to get information from the ground up.
Along side China, America is considered one of the largest automobile markets worldwide in both productions, as well as sales. Close to 7 million cars were sold in the States in 2016 and global sales of passenger cars was around $78 million US according to a Statistic report. This country knows cars.
One of the most thrilling and well-known franchise opportunities for investors would be the car dealership. Not only is it extremely profitable, it comes with a wide variety of benefits. Most cars have a well-known and impactful brand name. The reputation is established and recognized, without any work necessary.
Marketing is usually provided, with top of the line commercials and advertising that is produced by head office. Costumers are being driven through the doors without any effort on the franchisor’s part whatsoever.
There is usually a well-established staff that help carry the business, creating a reliable work-life balance for the franchisor. Though set up will be long and take some investment, once the staff are put in place, they can run the franchise. The franchisor has a clear set of rules and roles that allow the business to run smoothly.
That being said, a franchisee may have to step in and take over from time to time, but for the most part, a dealership allows for a very distant process.
Most franchises come with a repair shop, tire centre and service and products centre, which generates more profit but also takes more manpower and management to operate. The franchisor should provide the skill-set and training to adhere to a larger facility. Research into which franchise additions are available would be beneficial, as well as a look at the local competition. If a branded dealership is within an area, it is unlikely that you can establish another dealership of the same name nearby.
Rental and Leasing
The Automotive industry also touches in on car rentals, which is a well-known franchise opportunity. According to Market Data, US car rental operations generated a revenue of over 28 million in 2017.
A market that is easily manageable, there are quite a few reputable establishments that speak for themselves. On an individual basis, it would be wise to research profit margins and success rates of the industries that peak a franchisee’s interest. The start up of car rental industry may provide a hefty investment price tag, which again would be reason to research before investment.
A challenge would be location. Most territories already hold a significant amount of rental places and therefore a new establishment would be irrelevant. Start by researching airports, tourists reports and locations of already established rental companies. Where can your franchise profit and how can it in thrive within your location? Simply picking up the phone and asking individual franchises if they would consider a location within your territory might be the quickest way to narrow down your choices.
There are a lot of insurance issues and safety policies that can become a little sticky with car rentals, but franchises would have that under constant scrutiny and surveillance, allowing a franchisee to confidently enter the business safely.
The rental franchise would definitely allow for a great work life balance; once training is complete and the company is up and running, a franchisee can step back and allow the staff to follow procedure and policy for a successful outcome.
The automobile industry can take on some very different business ventures that can appeal to so many different interests. For those who thrive in a high paced business but are also looking for an opportunity to enjoy a work-life balance, most car franchises would be a great fit. For car buffs who would love to take their passion to the next level, the automotive franchise is a great investment to get their engines running.
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ABOUT THE AUTHOR: After receiving an English Degree, followed by a Journalism Diploma, Gina Gill became a freelance journalist in 2008. She has worked as a reporter and in communications, focusing on social media. She currently works as a community information officer with Epilepsy Society, while pursuing her writing career at the same time.