A franchised truck dealership can be a tremendous investment for anyone to consider when looking to profit from a brand name. Are your clients considering opening a truck dealership and going the franchised route? As insurance brokers, you must help them understand the ins and outs of franchised truck dealerships. Likewise, they must understand what they need to know about builders’ risk insurance and used auto dealer insurance.
Step to Open a Franchised Truck Dealership
This blog post will discuss the steps to opening a franchised truck dealership and provide tips you can share with your clients. Keep reading for more!
Research Franchises
First and foremost, your client must research the franchise or franchises they’re interested in carrying. Franchises come with benefits and obligations, so they must understand the terms of the agreement before signing on.
Have them consider the reputation of the brand(s), read up on customer reviews, and look into any potential partnerships or affiliations to help them make an informed decision. They can also look at the Franchisor’s current inventory of vehicles and services and compare them to other competitors in the industry.
Understanding Your Target Market
Your clients need to know their target market, what they’re looking for in a truck dealership, and how they can meet those needs. So suggest conducting surveys or in-depth interviews to see what customers are most interested in and what would make them more likely to come in and purchase a vehicle from them. They can also research the local area—like demographics and median income—to grasp better the type of customer they’ll be dealing with.
Certification Requirements
Franchised dealers are legally required to carry certain types of insurance, such as used auto dealer insurance. Hence, your clients must acquire them beforehand. Furthermore, inform them about registering their business with the state and local governments to comply with regulations.
Construction/Leasing/Business Considerations
Depending on their needs, franchise dealerships can lease or purchase a building. Therefore, your clients must consider where to open up their dealership and what type of space it needs. Additionally, they must consider the space they’ll require. They must also consider what kind of vehicle displays and services their store will offer. Finally, they must figure out what amenities will be necessary for their customers.
Hiring Practices
Franchised dealerships require highly qualified personnel, so your clients need to take the time to research and hire employees who have relevant experience and knowledge in the industry.
Customer Service Strategies for Success
Franchised dealerships should provide excellent customer service, such as offering competitive prices, providing superior product knowledge, and always being quick to respond to customer inquiries. Thus, your clients must focus on customer service strategies to garner customer loyalty and satisfaction.
Difficulties
A franchised truck dealership does not come without its difficulties. For example, to open a Toyota Dealership, a person would need $500,000 at a minimum. However, the price is not set in stone and can vary depending on how large the dealership is. The value could go as high as $11.3 million, especially if your client wishes to start the franchised truck dealership from scratch. They would then need to apply for several essential contracting items, such as a dealer license and permits. Then, your client must obtain surety bonds and register the business to sell Toyotas.
Conclusion
Opening a franchised truck dealership is a great business opportunity for your clients. So as an insurance broker, guide them well so they can open up and run a successful business venture.
About K2 Insurance Services
Your used auto dealership clients will benefit considerably from the risk protection that K2 provides. Apart from the full range of insurance coverages, K2 also offers an ACH payment system that bills your clients directly. Call us today at (866) 429-1638 to find out how you can partner with the leading name in auto dealership insurance.
