Buying an Automotive Franchise? Do Your Research.
When choosing a franchise in the automotive franchise industry there is a particular need for research into your target area. With the automotive franchise industry being such a popular choice and with so many standalone automotive based businesses, you do not want to be setting your new business up in an already saturated market.
Looking at every town, city and even rural area in the country and you will see garages, petrol stations, car washes etc. They are everywhere and in abundance so ensuring that you are choosing the right industry sub sector with a good population density compared with the current automotive businesses in that area is paramount to your success.
So you first step is with identifying your territory and gaining some demographics. Find out the population of your territory, how many households with cars and motorcycles and from local directories you can find out exactly what automotive businesses are already in your area and how many of them. With this in hand you can then begin the selection process.
If for example there are 5 petrol stations, 7 garages, 3 exhaust, tyre and brake service stations and 1 car wash then perhaps a car wash franchise would be the one to look into. As with all franchises location is very important also, a car wash franchise which is not visible and is inaccessible can fail fast however one located on a major through road or next to a supermarket can do very well indeed.
On doing your research and drawing up a short list of franchises which are not only viable but of interest to you too, the next step is to contact the franchisors and begin the selection process. Do not be drawn in by all the glossy packs they give you but instead take a reserved and measured approach to each.
Ask for a list of current franchisees and phone each one to ask how well they are performing, what the franchise management is like to deal with and if all the promises made in the promotional materials were at least close to being realised. By doing all this you can start to weed out the good from the bad and you are a step closer to ensuring you are making the right choice and spending your money wisely.
There is also a matter of franchisee churn / turnover to look into. what franchisee churn is, is the amount of franchisees who have exited the franchise system. A high franchisee churn shows an unhappy and unprofitable franchisee base and should set some noisy alarm bells ringing. If they are leaving in their drives then I suggest you look elsewhere and discard immediately.
With the right research in hand you can make the right choice and automotive franchises are extremely popular and profitable. Do not make the mistake that many people do though and enter a saturated market as this will only lead to disaster and end up with you in debt or severely out of pocket.
About the Author
Matthew Anderson is a franchise consultant and founder of The Franchise Shop, a UK business franchise directory featuring
opportunities and a
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