Can Selling Retail Work for You?

Have you been taking a beating at the auctions lately? News flash: you can make more money on your de-fleeted rental vehicles. How? One avenue is retail sales. Okay, hanging your shingle and selling to the general public is easier said than done. Opening any independent business is a risky proposition—remember the trials and tribulations you faced to get your car rental business off the ground?

Another potentially less risky venture would be to open a used car sales franchise. You’ve probably heard that about half of all small businesses fail within five years, according to the National Federation of Independent Business’ Education Foundation. An oft-quoted figure from a study by the Journal of Small Business Management puts failure rates for franchises at less than 5 percent.

Yet running a franchise operation—especially a capital-intensive one such as car sales—isn’t for everyone. It takes a lot of money to get in, you pay royalties to the franchisor on every car sold and you have to play by the franchise rules. And are you ready to open a completely separate business?

Here’s an introduction to used car sales franchising. Call it the beginning of your due diligence to see if franchising is right for you.

Payless and Thrifty
Payless Car Sales and Thrifty Car Sales are the two major used car sales franchise opportunities with a foundation in car rental. Another car sales franchisor, Indianapolis-based J.D. Byrider, specializes in older cars sold to customers with a blemished or limited credit history. We’re talking about Thrifty and Payless here.

Tulsa, Okla.-based Thrifty Car Sales has 39 U.S. locations and has been operating since 1999. In its sixth year, Payless Car Sales (St. Petersburg, Fla.) has about 50 dealerships in 16 states.

That leaves room to grow, says Mike Harley, president of Payless Car Sales. “There are not too many markets today where we’d run into a problem in that the territory is already taken or protected,” says Harley. “Right now the market is pretty wide open.”

A Built-In Customer Base
As car rental and car sale businesses ultimately entail buying and disposing of vehicles, you might think there is crossover of owners who do both. This is not the case. At present, Thrifty has seven car sales franchisees that also run a car rental operation. Payless has two. Most franchisees for Payless and Thrifty come from a dealer background.

CONTINUED:  Can Selling Retail Work for You?
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