Some Common Franchise Terms and What They Mean
If you’re thinking about opening an automotive franchise, we love that idea — especially when you do so with Byrider! Franchising is a great way to become your own boss, allowing you to be in business for yourself but not by yourself. But as you learn more about the world of franchising, you might be confused by some of its terminology and language. So, let’s look at a few common franchise terms you’ll come across as you move forward in your journey, what they mean, and why they’re important.
Opening any new business requires an investment of not only time and effort but of money as well. Start-up costs, sometimes called an initial investment, refer to the total financial investment you’ll need to make in an automotive franchise in order to get your dealership up and running. The great thing about a Byrider opportunity is that we offer two models to choose from, each with its own start-up costs. Whichever model you decide on, your initial investment will include expenses like our franchise fee, working capital, insurance, and so forth, and is typically represented as a range, showing low- and high-end amounts.
A franchise fee is the one-time lump sum you’ll pay to become part of a brand family. All franchisors charge a franchise fee, payable upon the signing of a franchise agreement, and when opening an automotive franchise with Byrider, you can expect to pay approximately $50,000. This fee covers the cost of your onboarding and pre-opening training and grants you access to our proprietary materials, logos, and resources, as well as gives you the right to do business under the recognized and respected Byrider brand name.
Royalties are the monthly fees collected by the franchisor against your gross receipts. Among other things, this money is used to fund the ongoing support we provide you and to improve operating processes on a regular basis.
Put simply, a franchisor is a company or brand that’s offering an investment opportunity. But in reality, a franchisor is much more than that — or should be. The people behind the brand are what really determine the strength of a franchisor because those people will be the ones you’ll turn to for ongoing support. In addition to selling you the right to open locations and sell products or services using their brand name, franchisors will also be the people who make sure you’re well trained and ready to do business. The training and support we offer is one of the best reasons to consider Byrider when thinking about opening an automotive franchise in your community.
Franchise Disclosure Document
A Franchise Disclosure Document (FDD) is a very important standardized document required of all franchisors by the Federal Trade Commission. Serious potential investors in a Byrider automotive franchise always have at least two weeks to review ours, oftentimes with their attorneys. In it, they’ll find answers to many of the questions they may have about our brand and offering, including answers to questions regarding our history, our team leaders, our investment numbers, and what they can expect from us as a franchisor. Investors also learn more about what’s expected of them as Byrider dealership owners and any monthly fees they’ll be responsible for.
Ready to find out more about a Byrider automotive franchise opportunity? Reach out today!