Why Auto Repair Franchises Are in Demand
In most parts of the United States, cities are designed around the idea of everyone having a car. It's a rite of passage for a teenager to learn to drive and get their first vehicle. Because of this, automobiles are near-ubiquitous and play a vital role in the average American's daily life.
All of those cars need maintenance, and thanks to this, auto repair companies are always in demand.
- Today, there's a record number of vehicles in operation. There are more than 284 million vehicles on the road nationwide.
- The average vehicle is over 12 years old.
- Aging vehicles require more repairs, making demand for auto repair services at an all-time high.
- Car-dependent consumers need fast and reliable repair services so they can get back on the road.
Automotive Repair Franchise Trends and Facts
A car-dependent population makes for a car-dependent economy. People need to keep their cars on the road—and are willing to pay to do this. Those who provide reliable car repair services can expect a steady stream of customers.
Automotive repair franchises are in demand across America, for many reasons:
- Vehicle ownership is high and trending higher.
- Cash-strapped Americans are clinging to older vehicles for longer, and older vehicles require more repairs.
- Public transportation usage is falling, and services are limited, increasing people's dependence on cars.
- The U.S. automotive aftermarket industry is estimated to be worth $405 billion.
- Consumers require both routine maintenance, repairs, and specialized services to keep their cars on the road.
The Rise of Mobile Auto Repair Services
Mobile auto repair services offer convenience for consumers and have a relatively low barrier to entry for business owners, too.
- Consumers expect convenience, and mobile auto repair services save them both time and money.
- Brands such as Novus Glass and Spiffy offer mobile detailing and oil changes, helping consumers maintain their vehicles more easily.
- Starting a mobile auto repair business requires a smaller investment than a traditional shop, thanks to the lack of venue overheads.
What Makes a Good Auto Repair Franchisee?
“A good franchisee is a person that wants to be an owner, understands team leadership, and is enthusiastic about executing a proven business model,” says Michael Riley, senior vice president of Ziebart, a vehicle appearance and protection service franchise.
He continues, “This person desires to be a successful entrepreneur and understands that they need key people to help them achieve their goals. Successful franchisees understand the business environment and the competitive market they wish to own. They are driven, passionate, eager, and constantly working to improve themselves. They treat people with courtesy, are empathetic and understanding, and always want to lead and encourage. The successful franchisee is responsible and understands their financial position and the investment level needed to sustain the business to achieve the R.O.I they desire.”
Some useful traits for a prospective franchise owner include:
- Leadership skills
- A passion for customer service
- A business-focused mindset
Contrary to popular belief, you don't have to have a lot of experience in the automotive industry to be a good franchise owner. If you do have an interest in cars, that's helpful, and you'll find it easier to get started if you can get hands-on with that side of the business. However, you won't need any experience. The franchisor usually provides training in the technical side of things, as well as the business areas.
Initial Investment and Opening Costs
The initial investment needed for an automotive franchise varies depending on whether you're running a mobile shop or a full-service automotive repair franchise with a dedicated venue.
Some factors to consider include:
- Real estate costs
- Equipment
- Vehicles
- Staffing
The Franchise Disclosure Document (FDD) will provide some insight into the up-front costs. It's important to review this document carefully before making a decision. If you can't afford the cost up front, you may be able to take out a loan to get the franchise started. Banks favor franchises over independent businesses because they operate on proven business models.
Ongoing Costs of Auto Repair Franchises
In addition to the upfront costs, there are some ongoing costs to consider. Cash flow can be a challenging issue for many business owners, so factoring in these expenses when evaluating the viability of the business is essential. The Franchise Disclosure Document gives you an overview of the kind of ongoing expenses you can expect, and the franchisor will support you in making cash flow forecasts should you wish to apply for financing to start the business.
Some costs to consider include:
- Royalties (percentage of revenue)
- Marketing/advertising fees
- Training, audit and support fees
- Utilities
- Wages
- Insurance
- Equipment depreciation
Franchise vs. Independent Auto Shop
One common question prospective business owners often have is whether it's worth attempting to open an independent auto shop. For many people who hope to "be their own boss," being independent seems like the obvious choice. However, independent business owners, especially new ones, face many challenges that a franchisor could help them overcome.
- Franchises: Working with an existing franchise offers business owners brand recognition, training, access to proven systems and the benefit of pooling resources to work with the franchise's supplier networks. This can help a new business owner break into a competitive market more easily and save money on equipment, parts, and other supplies. Access to legal and accounting help can also be invaluable.
- Independents: An independent business owner can start small and has more freedom to manage things as they wish. However, this freedom comes at the cost of business support. Most small businesses fail in their first 5 years. Many of these failures could have been avoided if the business had help with marketing.
Another thing to consider is that lenders prefer to work with businesses that have sound models. Franchise-backed businesses are more likely to be seen in a positive light by lenders, thanks to the support the franchisor offers to the new business owner.
Explore Automotive Repair Franchise Opportunities
There is significant demand for automotive repair franchises in the United States. Consumers depend on cars so they can get to work, go shopping and engage in leisure pursuits. Today, the average car on the roads is 12 years old, or even older, and these aging vehicles require additional care and maintenance.
Car repair franchises, whether full-service companies or mobile services, fill a vital role in the automotive-based economy by helping individuals keep their cars on the road. Consumers are willing to pay a premium for fast, efficient and reliable service because they cannot afford to be without their cars. This means there's ample opportunity for profit in this industry.
At Franchise Direct, we maintain a database of automotive repair franchises and other related automotive businesses. If you're interested in starting a new car repair business, simply explore our database and fill out the contact form to request information about any franchise opportunities that interest you.
Browse the available automotive repair franchises on Franchise Direct today and take the driver's seat in your future.