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Deciding to start a used car dealer franchise is a huge decision, and one that shouldn’t be made lightly. One of the first questions you’ll ask yourself is: “how do I get started?” While starting a franchise might be easier than building a new business from scratch, that doesn’t mean the process isn’t daunting. From learning the industry to the investment cost, pre-opening support, your grand opening, and continuing education to stay abreast of industry trends, there’s a lot to wrap your mind around when you start a franchise. We’re here to make the process a little less daunting, and ease your transition into our franchise family.
When you start an auto loan franchise with Byrider, you will need a credit line of approximately 5,000,000 dollars when your portfolio of receivables reaches maturity — normally a three-year time frame.
The initial franchise fee is 50,000 dollars, with 35,000 dollars required for each additional franchise purchased. However, there are many other costs associated with acquiring a suitable location, such as hiring employees, and properly funding your business. Since your franchise could ultimately generate a $10 million portfolio of automotive receivables, it is important to understand that the capitalization needed from a new franchisee can easily reach 1 million dollars.
It’s also important to note the monthly royalty fee, which is 2.5% of gross sales (vehicle sales price) and 1% of gross receipts (repayment of debt). Monthly royalties are capped at 12,000 dollars. Royalty caps decline with the opening of additional locations.
Byrider Franchising does not directly provide, or guarantee, any financing to its franchisees, but we do maintain relationships with many banks and lending institutions that are familiar with both the financing of subprime automotive receivables and our particular business model. We are happy to help make introductions to those lenders.
Other than the information contained in our Franchise Disclosure Document, Byrider does not make revenue or profit forecasts when you start an auto loan franchise with us. Results are subject to far too many variables such as market demographics, competition, the level of capitalization in the business, and the effectiveness of management in executing the business plan to provide an accurate prognosis.
The Franchise Disclosure Document provides more detailed information regarding the fees, contractual relationships with Byrider Franchising, Inc., and the corporately-owned units profit experience. Please refer to that information for a more detailed understanding of the franchise offering and business model.
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