There are many automotive aftermarket franchises available to purchase.
You will expect to fork out around R1.5 million to R2 million for most of these businesses.
One of the easiest ways for new entrepreneurs to participate in the automotive sector is to buy into an existing automotive aftermarket franchise. This includes businesses like panel beaters, parts suppliers, tyre repair and sales, car batteries, vehicle repairs, and even carwashes.
This may come at a high initial cost, but it allows businesspeople, often with little automotive experience, to tap into established enterprises and known and trusted brands.
It’s also an industry that depends heavily on insurance company referrals, and many franchisors have established partnerships with leading insurance providers.
Here are some of the most popular automotive aftermarket franchises available to purchase.
Car Service City
Car Service City is a large automotive repair franchise. They repair all makes of cars and bakkies at 60 branches located around the country.
The business has won several awards in recent years – both as a car repair business, and as a franchisor. They offer a turnkey car service centre option for people looking to get into the industry, and they are currently accepting applications from new franchisees.
Their current franchisees come from a variety of backgrounds, and previous experience in the automotive repair industry is not essential.
Car Service City charges an upfront fee of approximately R1.2 million to establish one of their repair centres. This estimate includes an initial franchise fee and setup costs.
They charge a monthly advertising and marketing fee of 2.5% of turnover, and a management fee of 5% of turnover.
Auto Magic is a franchise auto body repair business. They specialise in repairs, panel beating, fitment, and vehicle spraying. They have 30 franchises currently in operation, and are suppliers to all major insurance companies.
The company has an extensive national network of franchisees and agents, and they have various accreditations and memberships within the automotive industry.
They occasionally sell existing franchises, but are also looking to open new owner-operated franchises around the country. Successful applicants need not have extensive experience in the automotive repairs industry, but are required to have strong operational and administrative abilities.
A new Auto Magic franchise requires a capital contribution of at least 40% (approximately R1.4 million) of upfront costs in unencumbered cash. The final cost of a new franchise is typically in the region of R3 million.
They also charge a monthly turnover-based management fee of 10%, split between management and marketing, and require a working capital of approximately R300,000.
Noise Boys is a service and fitment franchise with 19 branches in seven provinces. They primarily focus on the installation of performance exhaust systems and tyres, but have also been building out a vehicle service division in franchises.
There are some established Noise Boys currently up for sale, but they are also looking for franchisees to open new branches.
As part of the new franchise package they offer comprehensive training, hands-on assistance from head office, and a centralised customer complaints system.
A new standard franchise currently costs R1,195 000, excluding VAT. This includes training, equipment and facilities to service most makes of cars and exhaust systems.
The initial fee also includes a retail component to sell related products, excluding tyres, and stock to the value of R50,000.
They also require an up-front franchise fee of R150,000, and fixed monthly management fees of R10,000, which they split split between advertising and management. Noise Boys requires a working capital of R150,000.
If franchisees wish to include a tyre fitment component, the price increases by R695,000, excluding VAT.
Supa Quick is a tyre dealer and quick fit fitment franchise centre that focuses on automotive safety.
They sell and fit tyres, batteries, exhausts and shocks at over 220 fitment centres in South Africa.
They have an extensive network of branches throughout the country, but are still open to applications from new franchisees.
The cost of a new Supa Quick franchise ranges between R 2.4 million and R3.5million, 50% of which must be available in unencumbered cash.
Prospective franchisees should also be able to raise enough cash to purchase equipment, and a six bay Supa Quick operation costs up to R 1 200 000.
Supa Quick also requires an initial franchise fee of R100 000, excluding VAT.
The installation of a waiting area, reception and the renovation of the premises in accordance with the Supa Quick Corporate Identity, can cost up to R350 000.
There is an ongoing monthly royalty for licences, and R13 500 advertising fund contribution.
From time to time there are existing franchises for sale. These attract a change of ownership fee of R50, 000.
Tyres & More
They offer a variety of products and services to car owners, including the sale and fitment of wheels, tyres, batteries, brakes, shocks, wiper blades and tow bars. They also offer puncture repairs and wheel balancing.
They have 36 existing branches, and are currently looking for new franchisees to expand the business. New franchises must be owner managed with a minimum of 30% equity.
Sites must be visible with on-site parking, and franchisees are required to have some form of retail motor industry experience.
Initial setup costs total approximately R5.5 million. This is split between R3 million for setup, and a working capital of R2.5 million.
Dent Doctor is a dent and panel beater franchise that offers both minor and major auto body repairs. They have a small network of branches and are currently looking for new franchisees to help expand their operations.
Each franchise operates independently from the franchisor, and the franchisor does not claim turnover-based monthly royalties. Instead they charge a once-off establishment fee, and a flat monthly branding fee.
Dent Doctor currently offers three franchise levels for branches that offer minor, advanced and major repairs. The initial investment for these ranges from R750,000 to R2 million, depending on the size and nature of the franchise. This includes the franchise fee and working capital.
The flat monthly branding fee varies between branches, depending on the franchisee’s usage of corporate branding.
They also offer an opportunity to existing auto body repair stores and panel beaters to convert to their brand, which attracts a lower initial franchise fee.
UPDATED: This article has been amended to include more up-to-date information on the Supa Quick franchises.
Source: Business Insider South Africa – www.businessinsider.co.za