When evaluating an automotive aftermarket franchise opportunity, it’s important to approach it in a methodical fashion. As part of your research, you should prepare an array of questions that must be answered before making your decision. These questions should cover financial commitment, market opportunities, franchise support and expected profit, among other things.
How to Evaluate a Franchise Opportunity
Evaluating an automotive aftermarket franchise opportunity involves several key steps. Begin by researching the brand’s reputation and market presence. Review the franchise’s Franchise Disclosure Document (FDD) as part of greater financial evaluations, paying close attention to fees, royalties and financial performance. Look for comprehensive programs and ongoing assistance coming from the franchisor level of the organization. Obtain firsthand insights into the experiences and satisfaction levels of current franchisees And of course, you and a legal representative must fully review all documents before making a final decision.
You should also require answers to a list of prepared questions. That could include some or all of the following:
Franchise Information:
- What is the total initial investment required, including anticipated expenses for opening the first unit?
- What is the ongoing royalty fee structure?
- Do you offer protected territories, and if so, what is the typical size and how is it defined? What is the current market size and projected growth for my target territory?
- Could you provide data on the average sales volume of existing franchises operating in markets comparable to mine?
- What is the franchisor’s history and experience within the automotive aftermarket industry, and may I speak with current franchisees about their experiences?
- How does this franchise differentiate itself from other automotive aftermarket retailers in the market, and what is the franchisor’s strategy for addressing competition from online retailers?
Operations:
- What is the range of automotive aftermarket products offered by the franchise, and how is inventory managed and replenished?
- What initial and ongoing training programs and support are provided for franchisees and their staff? Does the training cover product knowledge, sales techniques, and marketing (including specific digital strategies)? What customer relationship management (CRM) tools are provided?
- What key performance indicators (KPIs) are used to monitor franchise performance?
How to Use Your Answers to Decide
Buying into an automotive aftermarket franchise is a sizeable commitment of both time and money, but if you’re ready to invest, the rewards are many. Weighing you initial investment against the market potential for the brand will be easier after a successful fact-finding mission, where you receive answers to your critical questions. If you’re ready to enter our market, reach out to the Tint World franchise development team for more information.
