Getting into the car dealership business isn’t always a cakewalk. With numerous industry players in the automotive industry, setting up a shop can seem misleadingly easy. Purchasing a franchise is no mean feat either. For instance, the Byrider franchise is one of the leading car dealerships in the country, with a successful operation and a recognized brand name. However, getting in on the act is not simple. It requires significant financial resources.
While the Byrider franchise is not the biggest globally, it has consistently stayed at the top of its niche, offering steady returns on investment while providing much-needed training for both new and old franchisees. With such regular consistency being a part of their business success, it’s no surprise that many people wonder how much it would cost to be a part of this brand.
You’ll need over $400,000 for a chance at successfully launching a Byrider franchise. This ballpark figure breaks down into liquidity requirements and an initial franchise fee.
The business model is that a parent company (franchisor) sells the right to use its brand name to an individual or entity (franchisee). Usually, the franchisor is already established in business and has all the required factors in place, including strong brand recognition and a reliable customer base. A franchisee becomes a part of this, tapping into the already-existing customer base and all the other resources the franchisor has built over the years. Of course, a franchisor is very image-conscious, always making sure that its brand is not compromised. A franchisor will require a franchisee to meet specific requirements before granting the latter the right to use their name and logo while doing business. Part of these requirements is a minimum dollar amount, whether in assets or liquid cash.
In the case of the Byrider Franchise, one of the most crucial requirements is a financial commitment. Before being considered for a franchisee role, an individual must provide proof of funds to back up their claim of being willing to invest financially. This means liquidity of at least $350 000 and $50 000 is needed as an initial franchise fee.
Steps in Becoming a Byrider Franchisee
While becoming a part of a franchise is easier than building a company from scratch, it’s still a formidable task, with a very high failure rate if not handled well from the beginning.
Luckily, the company can help you along on this journey. It involves a few key steps, including:
i)Making Contact and Inquiry: The company will want to speak with you after you express a desire to be a part of the used car business under their franchise.
ii) Setting up a pre-qualification call: The used car business heavily depends on well-built relationships. The company will want to speak with you to build a good working relationship.
iii) Discovery: Here, you’ll be taken to corporate headquarters, where you’ll get a chance to interact with senior management, ask questions, and generally see what running a franchise is like.
iv) Agreement: Assuming you meet all the requirements and are approved, the proper documentation will be drawn up for you to sign. The company can then help you locate the needed real estate for setting up your dealership.
v) Training: Many other franchises leave you to figure out most of the details on your own as soon as you’ve signed the agreement. This company, however, provides you with training and ongoing support as you set up your establishment.
Benefits of Purchasing Byrider Franchise
Perhaps the most significant advantage of being a part of the Byrider franchise is instant access to customers already on the company’s list. It’s a well-known fact that the used car business is very cutthroat, with nearly 20% of new car dealerships going out of business within the first few years. Any business that relies on sales to prosper. Making sales shouldn’t be a problem with a well-established customer base. With a franchise, you can count on the established customer base to keep providing the needed sales to grow your franchise.
Additionally, because a franchisor is already established and relatively big, they have the means to run extensive marketing campaigns. Like all other forms of advertising, such campaigns require a sizeable budget. Such resources may not be available to you as a new franchisee.
All in all, buying a Byrider franchise will give you a leg up in the used car business. As long as you can come up with the $400,000 plus, you’ll see steady progress quickly.