Growing reliance on vehicles makes the automotive industry a dynamic sector in the US economy. The ownership of vehicles increases by almost 60% every year, making this a big plus for the automotive franchise business.
Let’s understand with an example – the average age of a car that runs on the road is around 11.5 years, and the average number of the total vehicles running on the road is approximately 14-15 million. This gives room to automotive franchise opportunities that cover a wide range of services and products.
The aftermarket industry of the global automotive franchise opportunities is rated to reach about $722.8 billion in the year 2020. The total global revenue for the US automotive franchise is about $41 billion. From valet services to car repairs, car sales, car washes, and rental businesses, you can choose any avenue to be a part of the automotive aftermarket industry via a franchise. But, understand these factors beforehand.
Choose the Right Category
Nearly 75% of the repairing of the automobiles is done by shops that run independently. Many of these are franchise businesses, where consumers trust that the professionals can handle their vehicles properly. Many such services fall within the categories like collision repair (30%), mechanical repair (about 50% of the total revenue of the industry), lube (10%) as well as oil change, car washes (almost 10%), etc.
If you select the right option to start your business, you have better chances to succeed.
Look at the Costs
It is essential to know if the franchisor is willing to contribute anything apart from the training and support. Ask if the company gives you supplies at a lower cost than other independent stores.
In case you would like to hire someone and pay a fixed amount of salary, check if the franchisors are willing to reduce your royalties to cover the additional cost of a salary. Also, how they implement the royalties matters a lot.
Protect Your Territory
Before investing in an automotive franchise, it is vital to protect your market share from the competitors. You would not want another franchisee to steal your clients. If your area is exclusive here, your franchisee should be the only one in the entire region.
With the right franchise opportunities, you can gain more experience by meeting people who can help grow your business. If they can offer a positive outlook for the business, you may also review the agreement of your franchise with an advisor whom you can trust for legal and financial counsel.
Explore the Growth Opportunities
When you acquire franchise opportunities for the auto industry, remember it is a fast-growing sector. The industry contributes nearly 3% of the national GDP. But, the rate of growth is not the same for all the companies. So, make sure that the franchise opportunity that interests you expands into your area of expertise and offers the best options you need.
Many financial and legal matters need to be discussed in a franchise business. Before starting, take the advice of a professional to make the right decisions. This will lead to a straightforward decision-making process in the end.