When deciding on a stable franchise investment with a healthy ROI and growth potential, there are many factors to consider. At the top of the list should be automotive repair franchise opportunities. In business, you want to give yourself the best chance at success, and the aftermarket car care industry checks all the boxes.
Automotive repair franchises cover a range of services that customers utilize for maintenance, prevention, and repair. These services include general maintenance, automotive maintenance, windshield repair, oil changes, muffler repair, transmission inspections, and body work.
The Strength of the Auto-Repair Industry
According to the U.S. Auto Care Association data, automotive repair is a $383 billion industry with an annual growth rate of 3.4 percent forecasted to reach $477.6 billion by 2024.
Not only is the industry showing promising growth, but consumer demand is high, showing a great need for after-market car care. For example, based on data from IHS Markit, the average age of a car on U.S. roads rose to 12.1 years. Older cars on the road mean more preventative care and repairs are required, putting you in the driver’s seat as an auto repair franchise owner.
A recent AAA study shows that maintenance and repairs cost car owners nearly nine cents per mile. With the average driver putting about 15,000 miles on their car annually, every customer you attract as an auto repair franchise owner, could potentially generate more than $1200 in business for you each year.
Consider, too, that no matter the season, the economy, or the quality of the vehicle, there are some recession-proof automotive repair franchise opportunities. The most recent example is the start of the Covid-19 pandemic, when despite shut-downs and a sluggish economy, car repair businesses had to stay open to keep people on the roads. Vehicles had to remain in good running order, especially those fulfilling “essential” tasks and services.
As new car prices have increased in the last five years, a lack of affordability has prevented many people from purchasing new cars. Once again, as people hang on to their cars longer, the need increases for good maintenance and repair. Coupled with recent supply chain issues hurting the new car industry, we experienced folks relying on their current cars to be dependable– meaning good business for auto repair franchises.
Profit Margin Comparison with Retail
Good business equates to a healthy bottom line. The average profit margin for the automotive repair industry is 20-28 percent for parts and 50-65 percent for labor. Impressive stats compared with a retail franchise you might be considering. Auto repair is a constant. It will always be needed. However, in a side-by-side comparison with various retailers, success in this category is mainly dependent on disposable income, a strong economy, and fluctuating needs. Lower profit margins than in other sectors can run between 0.5% and 4.5%. It is not as sound an investment as an essential service like auto repair.
AAMCO is Your Best Choice
Many customers prefer to take their car repair needs to trained technicians who work for well-established and trusted brands like AAMCO. We are an auto repair shop franchise that has built a trusted reputation in our 50- year history. We enjoy repeat customers at our franchise locations because they have grown to trust our standards with our specialty-trained technicians and impeccable customer service.
AAMCO is an iconic brand that has long been a leader in complex car care. We have positioned ourselves for the future by investing significantly in technology, training, and education to ensure our centers are the first choice for the booming auto repair aftermarket.
More than 6 million hybrids and electric vehicles are on the road, and more are on their way. Consumers are increasingly demanding the type of repairs that only AAMCO can deliver. That’s why we created AAMCO University, a state-of-the-art training facility offering extensive, specialized training with more than 300 interactive courses for franchise owners and their technicians. Not only are we equipped to repair a new generation of cars, but we remain solid in our ability to care for older model cars on the roadways, too.
AAMCO actively seeks single and multi-unit franchise owners dedicated to providing high-quality service. Interested entrepreneurs must have a minimum net worth of $250,000 and liquid assets of at least $50,000 per unit and can expect a total investment between $223,600 and-330,500, depending on real estate costs. That investment range includes the $39,500 initial franchise fee.
If you see the value in automotive repair franchise opportunities like AAMCO, request info and download our free franchise information report.