Do you want to start a Toyota car dealership franchise? If YES, here is a detailed guide on how to get Toyota dealership franchise and how much it cost. Toyota is a Japanese multinational automotive manufacturer that has its headquarters in Toyota, Aichi Japan. Currently, they have over 300 thousand employees all over the world and they are the sixth largest company in the world by revenue. As at 2017, they are the second largest automotive manufacturer in the world.
With all the success and patronage that the Toyota brand has enjoyed over the years, it is easy to see why some entrepreneurs would like to own a Toyota dealership franchise. Be that as it may, starting a Toyota dealership franchise is a lot more complex than simply starting your own dealership. However, you will find that it will be somewhat easier to be granted a Toyota franchise if you already have a form of experience in running a successful used car sale or other forms of auto-related businesses.
The process of getting a Toyota dealership franchise can also be quite competitive. In addition to having experience (like it was previously mentioned), you must also have the sufficient wherewithal and must have never been involved in any criminal activity. In addition, finding an available franchise in a choice location may also be a hurdle because Toyota only allows a certain number of dealerships in a geographical location.
Due to a slight reduction in profit, Toyota has not set its focus firmly on global markets where it can get the best new franchise opportunities. Here is how you can get a Toyota franchise and how much it costs.
How to Get Toyota Dealership Franchise and How Much It Cost
1. Have a Business Plan
In order to give your business a chance for survival, a business plan is a must have. A business plan will help to give you a sense of direction of where you would like to take you dealership and the route you would take.
As a matter of fact, the process of drafting up a business plan can expose to you the flaws in your business, give you an in-depth look on your revenue stream potential and consider your marketing needs. In addition, a business plan is needed if you would like to seek for funding from almost any source.
2. Make an application
In order to get a Toyota dealership franchise, you must first apply for it through the company. A prerequisite in car sales is needed for your application to be considered in addition to thorough knowledge of parts and service. If you have owned a car dealership previously, this can be quite helpful, though it is not necessary.
Also a college degree in business, marketing, finances or accounting can really help your application.
Another way to buy a Toyota franchise will be to first buy into a smaller dealer that sell a variety of cars including Toyota. This will help to boost your experience level, thereby getting your feet into the door for when you will apply for an exclusive Toyota dealership franchise. The list of available dealerships can be gotten through the National Business Brokers.
3. Clean Financial and Criminal Background
Like it was mentioned previously, in order to be considered for a Toyota dealership franchise, you must have a clean criminal record. A thorough background check will be done to this effect.
Toyota will also carry out background checks to find out your credit histories, including if you have had any bankruptcies. Your credit records will however be obtained with your consent. If you had a criminal record or a poor credit history, then your application can be denied on those basis.
4. Know State Laws
There are some states that regulate franchise sales. If you would like to buy an already existing Toyota dealership franchise in the united states, then it is advisable to call your Attorney General’s office so as to know what the law says regarding franchising in your state.
5. Know Your Franchise and Terms
Before you buy a Toyota dealership franchise, you should try your best to find out as much information as possible. You can do this by talking to other owners of a Toyota dealership franchise; inquire about how much they invested, how long the business lasted before it started turning in profit, and how satisfied they feel about owning the dealership. Their experience will give you a lot of insight.
You should also study the franchise agreement, sublease and any other applicable documents, such as relating to advertising payments, royalties, operating licenses, real estate improvements, training, legal fees, insurance and employee salaries and benefits. If you stumble on a clause that you do not fully understand, do well to ask Toyota to clarify it for you.
6. Hire a Franchise Lawyer
Before you buy a franchise like this one, you should hire a lawyer to go through the legal documents. The franchise agreement will be drafted by Toyota so if you see anything that you consider to be undesirable, you will have to ask them to adjust it accordingly. This is where the service of a franchise lawyer comes it. They can help you to get the best possible deal and also advise you when something cannot be negotiated.
How Much It Cost to Get a Toyota Dealership Franchise
The initial investment for a Toyota dealership franchise is at least $500,000. However, the price can vary according to the size of the dealership. In order to set this business up from scratch, you will require an investment of up to $11.3 million, including working capital, physical facilities, land and inventory.