Breaking Down the Auto Loan Franchise Investment

Before investing in any new business, you should have a complete understanding of what to expect financially. The cost of your initial investment, ongoing royalties, and estimated return on investment are all crucial to your decision to start a business. When you invest in an auto loan franchise with us, we want you to have all the answers, and that means making the investment as transparent as possible. We want to give you a clear outline of the investment costs, including the franchise fee, royalty payments, and financing information, so you go into your Byrider franchise with confidence.

What Should I Expect to Invest?

When starting any franchise, you will be required to pay an initial franchise fee, and an auto loan franchise is no different. At Byrider, this fee amounts to $50,000, with 35,000 dollars required for each additional franchise purchased if you choose to open multiple units. Other costs will come into play too, which you should keep in mind. These include expenses associated with acquiring a suitable location, hiring employees, and properly funding your business. You will also need a credit line of approximately $5,000,000 when your portfolio of receivables reaches maturity, which normally happens within a three-year time frame.

Keeping in mind the monthly royalty fee is also important, as this will be a recurring expense. This fee is 2.5% of gross sales (vehicle sales price) and 1% of gross receipts (repayment of debt), paid monthly to the franchisor. Monthly royalties are capped at $12,000. It’s also important to note that royalty caps per location do decline with the opening of additional franchises — just one of the reasons multiple-unit ownership can be beneficial.

Byrider does not directly provide auto loan franchise financing, but we are able to connect franchisees with numerous banks and lending institutions that can be of assistance. These institutions are familiar with the financing of subprime automotive receivables, as well as our particular business model. We are happy to facilitate conversations between our franchisees and those lenders, so you can be in the best possible financial position when you open your auto loan franchise with us.

What Will be my Return on Investment?

It would be irresponsible for us to forecast or make any guarantees regarding your earnings, as it will depend on several factors. Your profitability will rely on many variables, such as market demographics, competition, the level of capitalization in the business, and the effectiveness of management in executing our business plan just to name a few.

Luckily, you will be launching your franchise in a thriving industry, and we make it a priority to give franchisees a fantastic suite of resources for their auto loan franchise investment. This includes our Franchise Support Team, who will help you with everything from finance and real estate to training and technology service. We also offer marketing assistance, pre-opening support, and continued training to keep you abreast of industry trends and at the top of your game.

To learn more about the Byrider auto loan franchise investment, contact us today.