Automotive Franchise Snapshot – What’s Available Today?
The automotive franchise remains to be one of the top business opportunities in the franchising world, owing to an ever-fluctuating economy that makes people want to prolong the lives of their vehicles. An increased consciousness to environmental sustainability plays a huge role too.
So what automotive business opportunities are available nowadays? Read on and find out.
Automotive Franchise: 5 Types
Franchise Direct lists down five main automotive franchise categories:
- Aftermarket Parts and Accessories
- Maintenance and Repair
- Cosmetic and Paint
- Rental Agents and Dealers
- Car Washes and Detailing
Aftermarket Parts and Accessories
The aftermarket parts and accessories automotive franchise is comprised of businesses selling tires, wipers, side mirrors, and so on. It is considered the most successful of all automotive franchises due to consumers need to replace vehicle parts and accessories.
One issue that has plagued this automotive franchise category is the misconception that their products are substandard and thus, should not be used by consumers lest their vehicle’s warranty be voided by the manufacturer. This has long been addressed by the Magnuson-Moss Warranty Act which keeps manufacturers in check by preventing them from conditioning consumers’ minds. Be aware, however, of some issues that manufacturers use to deny warranty.
Cash requirements for this type of franchise range from $25,000 to $250,000.
Maintenance and Repair
With over 260 million cars on American roads today, these rides will need repair and maintenance. The average vehicle is over 11 years old and requires regular upkeep to lengthen the life.
This is where maintenance and repair franchises come in. Depending on your budget, you can choose from single-unit to multi-unit franchise opportunities that can offer an array of services. You can also partner with a related product or service.
Why go for maintenance and repair automotive franchises when you can establish one on your own? The answer is simple. Brand recognition. Franchises already have established brands. Customers are more likely to buy from brands they recognize and trust.
Merlin 200,000 Miles, Honest-1 Auto Care, Brickyard Automotive Repair and Service are some examples.
However, there are considerations to be aware of when investing in this automotive franchise. You need to ensure that your toxic waste is disposed of properly so as not to harm people’s health and the environment. Noncompliance with EPA Standards can cost you huge penalties and even imprisonment.
Initial investment is from $33,000 to $802,000.
Cosmetic and Paint
What car does not need paint, dent, and interior repair at one time or another? Car enthusiasts love to pimp up their rides. Even customers who treat their vehicles as a means to take them to Point A to Point B need to have their car’s damages fixed.
This automotive aftermarket industry is projected to generate over $680 billion by 2024. With a wide variety of choices, businesses include body shops, custom paint jobs, and even window tinting. The cosmetics market generates revenue due to drivers wanting to enhance their vehicles.
Annually, this automotive franchise continues to grow due to the number of older vehicles on the road. People want to upgrade their exteriors once they own a car for several years.
Starting a car rental business presents the most challenges due to expense. Acquiring an inventory is one of the first tasks you must complete. For owners, this costs thousands of dollars to start out with a fleet.
Joining a franchise in this industry helps business owners gain the right tools to be successful. Franchisors secure the proper licenses and insurance coverage for running this type of automotive franchise. In addition, they help owners acquire the right inventory and can even show them how to save money doing so.
With several options to choose from, selecting the right franchise for you is simple. Most of the companies are well-known and attract clients due to the brand.
Car Washes and Detailing
The good news is, no signs show that the automotive franchise is abating – not in the next decade, at least, as more and more consumers are holding on to their prized possessions.
Keeping your vehicle clean lengthens the life of the car. Detailing and other additional services remove dirt, grime, and other debris from both the interior and exterior. This keeps the metal from rusting and helps strengthen the upholstery.
One of the leading experts in this industry – DetailXPerts, a mobile, eco-friendly auto detailing company. Their brand is well-known and popular due to the steam cleaning technology utilized. Auto detailing is one of the cheapest ways to invest in the automotive franchise industry.
Other regularly collected ongoing fees for franchises include items such as advertising and proprietary software. These items add into the to normal business operating costs like utilities and payroll (if applicable). There are also other fees are charged on an “as needed” basis such as audit fees, or for additional, non-mandatory training.
Prior to investing, prospective franchisees should do their research and carefully review a franchisor’s FDD for more detailed information on all systems, procedures, and costs. Also, prospective franchisees should utilize the listing of franchisee contact info within the FDD to ask questions of those who have gone through the process already with that franchisor.
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