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Choosing a Car or Automotive Franchise

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You might be a car salesman looking to branch out on your own, or a small-business owner wanting to enter a new market. Whatever your situation, it’s worth looking into a car or automotive franchise if you’re considering franchise opportunities.

Auto parts franchises and car dealership franchises are some of the most popular types of franchise in the country, second only to restaurants.

Reasons to consider an automotive franchise

If one thing in life is certain, it’s that there will always be demand for cars. In the future, that could be a flying car or a hydrogen-powered car, but a car nonetheless. Owning an automotive franchise gives your business the clout of a recognizable brand name and draws customers in need of a vehicle or parts and service for their vehicle.

What to look for

When looking for a franchise opportunity, there are a few things to consider. First, you should look for a well-known name such as Chevrolet, Toyota, Valvoline, or Big O Tires. Chances are if you’ve heard of the business, your potential customers have as well.

In addition to a name, you’ll want to read reviews of the company to get a feel for its reputation. Review sites like Google and Yelp can give you a good idea whether people tend to like a business or hate it. You can also look at sites like and to see which franchises they recommend.

Can you afford it?

Before you can purchase a franchise license, you need to check with your chosen business to see what their requirements are. For example, Meineke requires franchisees to have a net worth of at least $250,000, liquid assets of at least $110,000 (non-borrowed), and a credit score of 700 or higher. To get your Meineke franchise off the ground you’ll need to invest around $250,000-$300,000.

The costs make owning a franchise impossible for many would-be business owners. But if you meet the qualifications put forth by your chosen brand you could soon start making a profit due to the name recognition and reputation of your business.

Is there demand?

The last thing you want to do is get stuck with a franchise that doesn’t have a customer base in your area. If you live in a large city where most people use public transit, an automotive franchise might not be the best option for you. Likewise, if you live in a small town with family-owned automotive businesses, consider whether you want to risk stealing their business and causing bad blood between you.

Look at your market and the potential competition within it. If there are a lot of automotive franchises in your area providing the same service you want to, you might have to move to another area where there’s less competition if you want to be successful.

Does the business have success with franchising?

Look at whether other franchisees have been successful. You can ask them directly or look for answers online. You don’t want to end up investing in a brand that hasn’t been very successful with franchising its business.

What restrictions are there?

Before signing anything, make sure you understand the rules and restrictions put forth by the business you’re franchising. You might find that they require you to keep certain opening hours, prices, and products in stock. Make sure you agree with these terms before making a final decision.

Whether you want to become a franchise owner of a car dealership, an automotive service center, or a car parts store, make sure you do your homework before you sign on the dotted line.

Sources: Canon,