When you invest in an automotive franchise, you’re investing in your future. Becoming a franchisee with an auto-related business means you’ll be purchasing the rights to trade as the franchisor’s brand whilst owning your own business. Becoming your own business owner in the automotive sector can be very rewarding, as the market continues to evolve and thrive. You won’t necessarily need any past experience working with cars or electrical as most franchises will provide you with the support you need to run the franchisor’s brand in your area. But what is a franchise?
What is a Franchise?
Franchising offers the means to get in to business for yourself but not by yourself. When you invest in an automotive franchise, you’ll be purchasing the rights to trade as the business owner’s brand, in your area. An example of some established franchise brands include McDonald’s, Pirtek, Hometyre and Dial a Dog Wash. Going down the franchising route of business ownership is an alternative to starting up a business from scratch. When you invest in a franchise, you’ll get a “business in a box”, meaning everything you need to set up the business is available to you from the beginning.
How Much Do Automotive Franchises Cost?
Franchises will usually advertise the upfront cost as an investment. In exchange for the initial investment, you’ll usually get the full starting kit. For a van based auto franchise, it might include the van equipment, a livery application to your vehicle, and full training and support. The investment may or may not take into factor the franchise license fee (the rights to trade and use the franchisor’s brand name), but most franchises will bundle this into the investment. Automotive franchises may also charge an ongoing royalty fee – for continued use of the franchisor’s brand name, and they may also charge an ongoing management service fee or marketing fee, used to help provide you with ongoing support and marketing.
On average, the typical investment for a van based automotive franchise will be around £25,000. Depending on the equipment required (and included in the investment) this may increase towards the £50,000 mark.
Let’s take a look at some of the reasons why automotive franchises are great business ventures.
Reasons to Buy an Automotive Franchise Business
1. A Rapidly Evolving Market
The automotive market is constantly evolving. The internal combustion engine is on its way out and the automotive sector is moving towards more renewable types of technology. Garages and vehicle repair businesses are often struggling to keep up with the rapid pace at which the sector is growing. As a result, this puts more and more strain on small businesses.
Thanks to franchising, many types of automotive businesses are able to keep up with developments in the sector. Ongoing fees paid by franchisees contribute to research and development which helps franchise networks receive continued training and support, keeping up with the trends in the market.
It is easy to see how independent businesses can begin to get left behind as the automotive market develops, accelerating at an unprecedented pace. Just over the horizon are self driving cars, closely following the breakthrough that was battery powered vehicles which only came about several years ago.
Keep up with the trends with an automotive franchise business in a booming marketplace.
2. Opportunities to Suit Everyone’s Interests
The automotive franchise sector is massive. If you have a passion for cars and great customer service, this would be a fantastic sector to get your foot on the franchising ladder. Let’s take a look at some of the new and established, top types of automotive businesses available as franchises.
Electric Car Charging Franchises
There are now a handful of franchises that are van based, serving provision of electric car charging points, maintaining and managing them. Similar to vending franchises, as you set up the charging points, the business pretty much runs itself. Users pay for charge and that goes into your business turnover. Overheads exist for installing and maintaining the machines, but as with vending franchises, the business can be scaled in line with your ambitions. Ideal as a part time business alongside existing commitments, or scaled for maximum earnings.
Mobile Repair Franchises
Whether its an auto recovery / mobile technician or service, or mobile tyre fitting, there are plenty of opportunities in the mobile automotive franchises sector. Some other types of popular businesses include chip repair, windscreen repair (domestic or commercial) and alloy wheel repair.
Vehicle Retailing Franchises
Becoming a car broker or auto retailer can net you earnings of upwards of £1K a week. As with other businesses, you can take on more cars to scale the business and earnings to meet your requirements.
3. A Profitable Sector
People are more dependent on their cars now more than ever, and as the number of cars on the roads continues to soar, so does the demand for auto related services. Thanks to the diverse range of opportunities within the automotive sector, the auto franchises market has a very profitable outlook. The automotive manufacturing sector contributes over £80bn to the UK economy, and with an automotive franchise you be part of it.
4. A Sector in Constant Demand
There are some contradictory stats across the web surrounding exactly how many cars are on the UK’s roads, but according to 2022 statistics from the gov.uk website, there are around 32 million vehicles operating at the end of 2022. That excludes SORN vehicles and excludes motorcycles and HGVs.
As the population increases, so does the number of cars on the roads and the demand for automotive related services. According to Statistica, over 860,000 cars were produced for the UK motoring market in 2022.
The demand for automotive franchises has never been higher, and now is the perfect time to get involved. As the world slowly trundles into the electric car market, more and more businesses that service the e-vehicle market in particular, are establishing themselves as franchises. Be a part of the automotive franchise boom.
5. Be Your Own Boss
Being your own boss means you have better control over the direction of your career. You will be able to, in many cases, work hours that better suit you, plus many automotive franchises can be run from home or using a van. This means you’ll no longer need to commute to and from work, freeing up productivity which can ultimately lead to a better work/life balance.
As with any franchised business, automotive franchises will have rules and procedures in place as part of the operations manual. Because of this, you won’t have complete control over the business, but you do have the responsibility to make the business a success. You can do this by carrying out marketing for your business in your area, and every effort you make to establish your business locally will help in the long run.
6. Full Training and Support
One of the biggest reasons more and more people are choosing to invest in a franchise is because of the wealth of knowledge and support available to them. Right from the start, you’ll have a helping hand to guide you through the process of choosing the right franchise, right up to investing and launching your business.
The franchise sector is incredibly well supported. Each country typically has its own franchise association, and because franchising isn’t government regulated in the UK, these franchise associations exist to help anyone looking to get in to franchising. Associations usually work with a number of businesses who also help the franchising sector. For example banks are able to lend up to 70% of the franchise investment subject to a comprehensive business plan and clean finance background. Banks, franchise associations and franchise consultants are all keen to help those looking to get into the world of franchising.
After investing in a franchise, you’ll benefit from comprehensive training and support from the franchisor. Training will often include everything you need to get the business off the ground in confidence. That does include finance and accountancy plus day to day running of the business. Whilst prior business ownership or management experience is useful, it isn’t always necessary.
7. Harness a Proven Business Model
If you start up an auto business from scratch, be it windscreen repair or vehicle retail, you’re bound to make mistakes, no matter how much education you have. Everyone makes mistakes. Even the franchisor will have made mistakes. But when you invest in an vehicle related franchise business, you’re harnessing a proven business model. One which has had its mistakes and faults ironed out and worked around. The franchise operations manual will be supplied to you when you join a franchise business. It contains everything that you need to run the business effectively. From proper brand guidelines, through to day to day running technique. It will usually contain support contacts too should you need any knowledge to call upon. A proven business model works. It is a route to business ownership that carries a lot more chance of success than if you were to go it alone.
8. Unlimited Earning Potential
When you own a business, the direction the business takes is up to you. It is your responsibility that the business is a success. And ultimately if you put the effort in, the rewards will be noticeable. The more effort you put in, the greater chance of a higher business turnover. Now the earnings will depend greatly on the type of automotive franchise you invest in, but most will enable you to scale your earnings with your workload.
If you’re investing in a vehicular related franchise that offers the opportunity to roll out multiple cars or vans to serve as many clients as possible, the more staff you hire, the more clients you serve, the bigger your turnover and ultimately your earnings. A good example of this would be a commercial windscreen repair franchise. Depending on the size of your territory, you may be able to take on multiple technicians who can at once, serve clients. The more staff and the more vehicles you have operating, the greater your potential.
If your business is premises based, you may be limited by working hours but depending on the size of your premises and the number of staff, you can scale your earnings in line with your ambitions.
9. An Established Brand
One of the benefits of investing in an automotive franchise is that you’re setting up as a company under an established brand name. By joining a franchise network, you’ll be trading as the franchisor’s brand name under your own company. The benefits of trading as an established brand speak for themselves. Some of the benefits include:
Existing Brand Recognition
Whether or not the franchise has existing franchisees, the existing business model will already be known. The more franchisees the business has, the better known the brand will be. Jumping into automotive franchising provides you with a “business in a box” and that comes with brand awareness. This can have a positive influence on your local marketing because if the brand has had a positive impact elsewhere, the trust flow can be leveraged in your own area.
Going back to the automotive franchise costs, some ask themselves why they continue to pay a franchisor a royalty fee when they could be doing it themselves. The answer is the brand. Franchise networks have a considerably more powerful reputation over smaller businesses because the brand and trademarks are usually better known.
Proven Business Model
If the franchise already has franchisees, there’s a strong chance the business model works. Whilst almost all automotive franchises will have systems in place to ensure its success (such as franchise documents and consultants), the benefit of investing in a franchise is that you’ll be a part of a business model that has proven to be successful. You won’t be starting up a business from scratch, you’ll be setting one up using a proven recipe for success. Countless other franchisees will have followed in the same footsteps, and you’ll have the franchisor’s knowledge and experience to call upon if necessary.
Established Partners and Suppliers
The franchisor will have partners and suppliers in place who can offer you good deals on products and services. If you require a vehicle for your business, the franchisor may be able to recommend a vehicle lender at a competitive price. The same goes with marketing and supplies. The franchisor might have agreements in place with auto parts suppliers for example, or specialist auto technology and equipment, equipment which would not be available to you as a solo startup. Even if it was, solo start-ups wouldn’t benefit from the same purchasing power as a franchise network would.
10. An Asset You Can Later Sell
Just like any business, it can be sold once you have built it up and later choose to pursue other avenues. When you sell the franchise, it will be called a resale, where another entrepreneur can continue operating your business and serving your clients. You’ll be able to charge considerably more money than what you paid to start with. Because the reputation of the business and the effort you have put in doesn’t go unrewarded.
Note that there will be some fees associated with selling your franchise, but you’ll be able to retire from the business with a large sale value.
Buying an Automotive Franchise
The first step to investing in an automotive franchise and being your own boss, is understanding whether business ownership is right for you. Many people choose to invest in a franchise to break out of employment. Whilst others invest to be their own boss and get a better work life balance. After deciding if its a good decision for you, the next step would be searching for the right opportunity and due diligence. Research brands and come up with a list of five or so that interest you. Compare them, and understand which offers greater earnings and better support. Research the demand for the business in your area. It is also a good idea to find out about any competitors. During your search, you should make an enquiry via their website or a franchise directory to request a prospectus. The prospectus will usually tell you more about the business background, the package, and the earning potential. It costs nothing to enquire, so take your first steps into the franchising world today.
