Discover some important business and marketing fac

Discover some important business and marketing factors before investing in a brand automotive franchise.

The most significant factors that should be considered when purchasing any franchise is when will the first investment add or subtract towards the bottom line of the profit and loss statement. A number of these factors are somewhat generic for just about any franchised business. This article looks at some of the major considerations that are generic in addition to unique to a franchised automotive repair facility.

What’s inside a Brand Franchise?

Brand name is one the most important considerations for a business franchise and the automotive repair clients are no exception. First and foremost consumers are much more likely to go to a company that they’ve heard about. An automotive repair center brand can further assistance to identify which kind of repairs the shop focuses on. For example

Midas – MufflersJiffy Lube – Oil ChangesAamco – TransmissionsGoodyear – Tires

Another consideration is the quantity of advertising. These franchises are all well recognized for what they focus on because of the large amount of advertising. There are plenty of automotive parent firms that have similar franchise fees, where they are doing little if any advertising.

Automotive Repair Franchise Fees

Franchise fees can vary with respect to the brand. Most automotive repair franchises will have a set percentage fee based on sales that always runs around 7% plus other flat rates. Some parent companies can include a flat fee every month usually disguised by another name like advertising fees.

A fee based around the area of sales may have a major impact on the profitability. As an example, lets assume the next simplistic financial statement before the franchise fee of 7% of sales for a given month.

Sales $100,000Less price of Sales $60,000Gross Profit $40,000Less expenses $30,000Net profit before taxes (excluding 7% fee) $10,000

Using this scenario the franchise fees would amount to $7,000 (7% of $100,000 in sales). A completely independent shop would realize a net profit of $10,000 while the franchised shop, when the fees are expensed would realize an internet profit of $3,000.

More about this topic

    Information for an Automotive Business FranchiseInformation on How to Purchase a FranchiseFranchise Can Complement an Existing Business

    Automotive Repair Franchise Investment

    The energy production amount depends on several factors like fees to the franchiser, capital equipment investment, inventory and so forth. It’s important while shopping franchises to list out and compare what the investment includes and also the expected return on investment. Ask the parent company for copies of a few of their franchises fiscal reports. Bear in mind they’re more likely to show very successful businesses and eliminate the ones that are struggling.

    Before a choice is made on the particular brand, the customer should contact other franchise those who own that brand and discover they’re return on investments. Remember that national brand names will command higher fees however the extra fees will probably be worth the brand recognition.

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