Joel Libava
Recently, I spent 20 minutes trying to line up a rental car for the vacation we’re finally taking (after two years of Covid). It got me thinking about the franchise car rental business.
For example, is Avis a franchise? If so, what’s the cost?
And finally, is there a way to cash in on the always busy rental car space, franchise or not?
Here’s what I learned.
The Avis Budget Group Almost Offers Franchises
“What does ‘almost’ mean, Joel?”
Well the answer is confusing, so please be patient.
For starters, the title of the Avis franchise webpage (on my web browser) reads “Avis Budget Group Franchise.”
But when you scroll down the page a bit, the text reads, “Welcome to Avis Budget Group’s licensing site.”
So is Avis rent-a-car a franchise opportunity or a licensing opportunity? And what’s the difference?
According to Nerd Wallet, “Franchises and licenses are both business agreements in which certain brand aspects are shared in exchange for a fee. However, a franchising agreement pertains to a business’s entire brand and operations, while a licensing agreement only applies to registered trademarks.”
Except I was taught “when you buy a franchise you’re buying a license.” So now I’m totally confused (first time today).
In a nutshell, it comes down to systems and control.
More specifically, if you buy a franchise, expect to have tighter systems, more rules, and less control.
On the other hand, if you become a licensee, oh heck…just read this!
Is A Franchise Car Rental Business A Good Business To Own?
Considering the fact it’s going to cost us $500 for a decent rental car for our one-week vacation, I’d have to say yes!
Because if an Avis licensee rents one vehicle every week for $500, their revenue is $26,000. And if the car costs $30,000, that means it’s almost paid for in full after only one year.
Then simply add a few upgrades, surcharges, and way-too-expensive insurance policies, and you’ll come out ahead after only one year.
Of course you’ll need to subtract your expenses, but if you have a 100-car fleet, well…do the math.
Granted, I don’t know a lot about the rental car business
But I do know about the car business (since I was in it), and there are many ways you can have a profitable automotive-related business.
That said, if you’re mildly interested in owning and operating a business that never quits (but does feel the impact of economic downturns), you may want to take a look at Avis.
How Much Does An Avis ‘Franchise’ Cost?
This is where it gets interesting.
I don’t know how much an Avis rent-a-car business costs. Why?
Because there’s nothing on the Avis website that gives specifics about upfront costs.
Instead, you get “The size of the fee is subject to a number of factors including the size of the market in terms of geographical spread, GDP performance (current and future projections) and size of the population.”
And when it comes to ongoing costs, the information provided is a 1st cousin to what’s above. It depends on this, that, the 2nd letter of your 1st child’s name, and…blah blah blah. In other words, you get nothing until you contact Avis headquarters. So there!
Note: you’re welcome to search for “Avis franchise cost” if you want. You may find some general information.
But I can’t promise the information you find will be 100% accurate, so you may want to go right to the source.
Bottom line?
You may be able to make a decent living as an Avis rental car licensee.
Sure, they’ll be ups and downs, as you don’t have control over the economy, insurance costs, vehicle production, or employee turnover.
But rental car businesses sure are busy, franchise or not.
(Image of Avis car rental counter courtesy of Wikimedia commons)
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