Imagine a car enthusiast who dreams of running their own business. Do they wake up in the morning thinking about sidewalls and tread?
Then they’re the perfect candidate to open a franchise with Big O Tires.
Passion is an invaluable trait in a business owner. Caring deeply about the goods and services provided leads many franchise owners to success.
How does one leverage their passion and enter the world of franchising? Read on to learn the ins and outs of the franchising process and see how to launch a franchise in a sector one cares about.
Is the Automotive Industry a Good Choice for Franchising?
Automotive franchises are among the most popular kinds of franchising opportunities for a good reason. They are an excellent sector for a franchise.
As of 2020, they were over 286 million cars on the road in America. Every one of those cars will need service at some point, whether it’s new tires, an oil change, or a tune-up. That means that an automotive franchise, no matter what service they provide, will never be short of potential customers.
Additionally, the automotive industry is a perfect match for the franchise model. Customers are already familiar with dealerships selling certain brands exclusively, and many dealerships are run on the franchise model.
Customers also expect certain shops and stores to carry unique parts. They anticipate going to a tire shop like Big O Tires to purchase tires, a detailing shop like Tint World for window tinting, and an oil change facility like Victory Lane for oil changes. Even driving schools like All-Star Driver Education are franchises.
Finally, an automotive franchise can be an incredibly profitable business, making it a lucrative financial investment. The average gross revenue in the sector is around $650k and it grows as the business ages and becomes more well-known within the community.
If one chooses to forgo hiring a general manager, the owner-operator could take home well over $100k in a financial year. This is why it’s important to pursue franchising in an area that one is passionate about. The franchisee has to be willing to put in the work to reap the rewards.
Opening an automotive business is a great way for an enthusiast to turn their passion into a legitimate, money-making business venture. It affords them the opportunity to work with a well-known brand name, which immediately gives them credibility in the field.
Decide What Kind of Business to Open
The first step in opening a franchise is to determine what sort of business to open. It’s helpful to stick with an industry one has experience in, but it’s not a hard and fast rule. Sometimes, it’s more valuable to forgo past experience in favor of an exciting new opportunity to learn.
Fortunately, the automotive world offers a wealth of franchising opportunities whether it’s Big O Tires, a transmission shop like Mr. Transmission, or a general automotive repair franchise like Meineke.
The bulk of franchisees receives extensive training on how to operate the business and perform the basic operations. This is incredibly beneficial to those who don’t have prior experience in a particular sector, so they shouldn’t let a lack of experience be a roadblock on their path to becoming a franchise owner.
For example, Big O Tires is committed to working with new franchisees. They offer 14 different cores classes, provide a mentorship program with feedback from other successful franchisees, and are open to providing help when it comes to managing the franchise and adhering to company procedures.
Review the Franchising Opportunities
After deciding what kind of business to run, the next step in the road to franchising is to review the available opportunities. While they are plenty of different automotive businesses, not all of them are excepting new franchise applications at a given point in time.
For this step, the prospective franchisee should consult with a franchise management company. They’ll be able to provide the budding entrepreneur with a list of available options.
Once an opportunity is spotted, it’s time to review the application at a meeting with the franchisor. The purpose of this meeting is to provide insight into the company and determine if the business and franchisee are a good match for one another.
At this stage, it’s a good idea to reach out to other franchisees within the company and ask them questions regarding franchise support and training methods. Look for a company that values its franchisees. It should be relatively easy to glean that information, as franchisees at a well-run company will be happy to offer that information.
Receive and Review the Franchise Agreement
If the opportunity looks promising and the prospective franchisee is a good match for the company, they’ll receive a Franchise Agreement. This outlines the terms and conditions of becoming a franchisee and is a binding legal document.
It’s important to review this document with both legal and financial advisors to ensure that the deal is fair before signing. Signing this document means they’re a full-fledged franchise.
Draft a Business Plan
A business can’t be successful if it doesn’t have a comprehensive business plan. It needs to account for things like financing, marketing, and staffing. It should also include a general overview of the industry, the automotive industry in this case, and how the franchise fits into it.
Opening the Business
Becoming a franchisee is only part of the process, and it’s arguably the easiest part. Actually opening up the first location takes a significant investment of both time and money.
Consider Various Funding Options
A franchise needs a good amount of capital to get started. Wealthy individuals may be able to finance their enterprise on their own, but that’s not a reality for many new franchise owners.
For them, they should consider approaching a financial institution for a small business loan. The Small Business Association (SBA) offers loans that can cover the initial start-up costs that come with opening a franchise. In some cases, the franchisee can be eligible for an SBA 7(a) loan of up to $5 million.
Secure a Location
Once the franchisee secures financial backing, they can determine the location of their new business. If one decides to open a brick-and-mortar location, they’ll be subject to their city’s zoning laws.
Of course, zoning isn’t the only thing that a franchisee needs to consider. A location on a major street is much more accessible than one in a far-flung area. This could lead to more business.
Proximity to other businesses is another consideration to make. If the new franchise is located with many other companies, it may attract more customers than a single, stand-alone building.
Every automotive business needs qualified technicians to perform repairs or install new parts. These employees form the backbone of the company.
It’s important to vet each candidate carefully, as they will be the ones performing services and interacting with customers every day. As a new franchise, these people need to be professional and skilled, as customers won’t return if the franchise supplies shoddy service.
While the hiring practices are up to the discretion of the franchise owner, they should prioritize candidates with previous experience as a technician. It may be valuable to hire those with prior experience within the company.
Invest in Equipment and Stock
With the necessary legal paperwork out of the way, it’s time to build out the business.
As an automotive business, the biggest expenditures will be securing equipment and stock. They’ll need equipment like computers, tools, lifts, and office supplies as well as interior decorations.
They’ll also need a stock of merchandise on location, so customers don’t have to wait for orders to be fulfilled. This is especially true in the case of opening a tire shop. Customers will show up with a damaged or flat tire and expect to get back out on the road shortly.
Reach Out to the Local Community
A new franchise will fail if the franchisee can’t generate interest from the community, so it’s imperative that its marketing and advertising efforts have a broad reach.
Consult with the franchisor on their marketing efforts. Many supply new franchises with the material to get them up and running.
However, one shouldn’t rely on the franchisor alone for marketing and advertising. Consider investing in local sponsorships, ads, and flyers.
Opening a Big O Tires Franchise: Turn a Passion into a Career
Franchises afford their owners the ability to be their own boss while the larger company’s brand name gives them immediate credibility.
To run a successful franchise, the owner needs to be excited about putting in the work. For instance, a car-lover would do well with opening a Big O Tires franchisee.
Ready to get started? Saiter Real Solutions is here to help.
With such clients as Unity Rd and The Dripbar, our franchise consulting firm has everything it takes to help run a successful franchise in any industry. Browse our listings, learn about the firm, and schedule a consultation to see how we can help!