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Automotive Franchise

Written by: Cynthia Gleeson

Article Overview: They have been called a proven cash business, and with the right person behind the wheel, they most definitely can be. If you are passionate about cars and you have the time and energy to devote to running a business, an automotive franchise could be the right way to go for you. Whether you are interested in opening a car wash or a car repair shop, a franchise will let you buy into an already well established business. You won’t have to start from scratch, but you will nevertheless have to keep some things in mind.

Automotive Franchise

They have been called a proven cash business, and with the right person behind the wheel, they most definitely can be. If you are passionate about cars and you have the time and energy to devote to running a business, an automotive franchise could be the right way to go for you. Whether you are interested in opening a car wash or a car repair shop, a franchise will let you buy into an already well established business. You won’t have to start from scratch, but you will nevertheless have to keep some things in mind.

First of all, you need to decide if you are interested in running a full service establishment, one that is fully automated and offers everything from car washes to waxing and drying? Or, do you want a partially automated operation, hiring workers to fill in some of the gaps? Bringing extra people on board your team will undoubtedly add an extra dimension to your management plan. Do you have the leadership qualities that are required to lead and motivate a crew of employees? Do you have the resources you need to train your workers; and what about if you experience a high turnover rate? Would a fully automated shop in the end be cheaper?

Next, you need to consider where you want to set up shop? If you want to work close to home, but you live in a low-traffic area, is that wise? Does your city get a lot of snow, during which time people might be more concerned about just keeping snow off the font windows than having it professionally cleaned? Are you prepared for the times or seasons when business might be low?

Buying and operating an automotive franchise can be an expensive venture. First, there is the initial franchise fee, a one time payment that can range from $1,000 to more than $100,000 depending on the company you join. While the average startup fee is somewhere between $20,000 to $30,000, many are often non-refundable, so you better be sure about your decision before you sign any papers and make it official.

If you have managed to scrounge up the capital for the initial fee, you aren’t finished yet. Next comes the monthly royalty fee, which is typically between three to six percent of your gross monthly sales. Some companies even maintain a monthly minimum payment, which can be quite damaging for franchises during their low seasons.

While those are the two major costs associated with such a venture, there are always the less subtle costs that tend to creep up on franchise owners. You might need to purchase equipment for your business, including cash registers or the cleaning fluid itself. You will definitely need some bright and attractive signs to make drivers aware of your off-road presence. Also, you should make sure to read the fine print to see if there are any funds you will be required to the company’s headquarters on top of that which you already do, such as for national advertising campaigns.

Don’t let the expenses associated with owning an automotive franchise scare you away. It can be a lucrative business with the right person in the driver’s seat.

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  Automotive franchises going strong despite industry problems
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  10 Tips for selecting the Best Franchise
  Is an Automotive Franchise for You?

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