How Lucrative is it to Own an Automotive Franchise?
The whole purpose of owning an automotive franchise, or indeed, the whole purpose of conducting any business, is to make a profit. If you run a business, you want it to be profitable. This is true if you’re an automotive enthusiast with decades of technician work under your belt or a proficient business person with several franchises under your ownership. You need to make money. But how likely are you to do that with an automotive franchise? How lucrative is it to own an automotive franchise?
Generally speaking, there are two major incentives to owning a franchise: the desire for independence and the desire for money. Most of us, on some level, want to be our own boss. Franchise ownership allows us to do this by, functionally, being our own boss but also having the benefit of guidance and support from the franchisor. That’s why franchise ownership is very appealing to a lot of folks. But in order to make money, you must buy the right franchise in the right industry. Is the automotive industry the right industry? Is it wise to own an automotive franchise?
Automotive Franchise Ownership
Let us get the caveats out of the way first. How much money automotive franchise ownership accrues is dependent on myriad variables that cannot all be accounted for in one article. Where in the country is the automotive franchise? Where in the city/town is it situated? What kinds of cars do people drive there? What is the median income of the area? And, of course, which automotive franchise are we discussing here?
Given all these variables, we cannot tell you, “If you own X automotive franchise you will make Y dollars”. Anybody who is willing to make such a bold statement is not to be trusted. Nobody can give you such a figure in good faith. But we can give you some numbers that should indicate how lucrative automotive franchise ownership can be.
The Automotive Aftermarket
If you own an automotive franchise, you are part of the automotive aftermarket. This market consists of all transactions to do with automobiles after their initial sale. Repairs and replacement parts make up most of the automotive aftermarket. The demand for automotive aftermarket parts was an estimated $55.8 billion in 2016. And that’s just in America. Globally, the automotive aftermarket keeps growing. It is expected to reach $722.8 billion by 2020.
Clearly, that’s a lot of money. But is this a bubble? In short, no. For one, there are more vehicles on the road than ever before. Over 300 million vehicles were used in North America in 2016. And as population increases, this number will likely increase as well. And the average age of the American vehicle is at an all-time high as well. Older vehicles need more service and repairs, and this means more business for automotive franchises.
Tuffy Tire & Auto Service
In conclusion, it is possibly very lucrative to own an automotive franchise. The numbers all look good so if you work hard and pick the right franchise to buy, then you should make money. The median Tuffy Tire & Auto Service franchise (which has been operating for at least two years) earns $864,031 in gross sales. To learn more, please get in touch.Back