Byrider Franchise Costs, Fees & Owner Salary (2023)

INVESTMENT

$947,000

-

$1,578,000

LOCATIONS

131

Adam

Updated

April 11, 2024

Is

Byrider

a franchise?

Yes,
Byrider
currently
accepts
franchise
applications

Headquartered in Carmel, Indiana, Byrider is a leading American used car sales franchise and finance enterprise.

The chain was founded in 1979 by James F. DeVoe in Marion, Indiana.

Byrider offers a buy-here-pay-here dealership that integrates vehicle sales and service with consumer financing to give the franchisees the greatest control of the business, allowing them to function as a bank or lender.

It started franchising in 1989 and currently has 148 locations in the US, of which 116 are franchised-owned.

How many

Byrider

franchises

are there?

In 2022, there were
131
outlets in
the United
States, of which
112
are franchises, and
19
are corporate-owned.

What are the

Byrider

franchise

fees?

Royalty fee

2.5% to 4%

Advertising fee

$2,450 per month

Initial Franchise Fee ($50,000)

The initial franchise fee for a Byrider franchise is $50,000. This fee compensates Byrider for its selling, administrative, and training expenses. The fee is payable upon the execution of the Franchise Agreement.

Royalty Fee (1% to 2.9% of Gross Sales or minimum amounts)

For the first year of operation, franchisees are required to pay a royalty fee of $5,500 per month. After the first year, the royalty fee is the greater of $7,500 per month or 1% of the Franchisee’s Gross Sales (Byrider Vehicle Sales).

Advertising Fee ($18,000 or up to 5% of Gross Sales)

  • Ad Group Contribution: Franchisees are required to contribute $1,500.00 for each Business Location each month to J.D. Byrider Advertising Group, Inc. (the “Ad Group”).
  • Local Advertising: Franchisees must also join one or more Company-approved local advertising co-ops and make contributions as required. They are obligated to spend at least 2% of their Gross Sales (Byrider Vehicle Sales) on co-op or local advertising. This percentage can be increased to 3% in the future, subject to the Advertising Spend Cap.

Note: The fees presented here can be found in the Item 5 of the Franchise Disclosure Document. For a complete list of all the fees borne by the franchisee, please consult the Franchise Disclosure Document.

How much does

it cost

to start a

Byrider

franchise?

It costs between
$947,000
and
$1,578,000
to start a
Byrider
franchise.

The Single Byrider Business model presents an estimated initial investment that spans between $790,750 and $1,412,500. This range encompasses various expenditures, from the initial franchise fee to costs associated with equipment, signage, inventory, and more.

The table below offers a detailed breakdown of these expenses to provide a clearer picture of the financial commitment involved.

Expenditure Type Cost Range Paid To
Initial Franchise Fee $50,000 Byrider Franchising
Starter Kit $0- $2,500 Approved suppliers
Rent (3 months) $8,750-$30,000 Suppliers
Furniture, Fixtures and Equipment $1,500-$50,000 Suppliers
Service Center Equipment $2,000-$70,000 Suppliers
Signs and Awnings $2,000-$50,000 Approved suppliers
Security Deposit for Property and Utilities $2,000-$10,000 Lessor, utility companies
Opening Inventory of Vehicles $50,000-$75,000 Suppliers
Advertising and Grand Opening $18,500-$30,000 Suppliers
Technology/Phone/Security Systems $5,000-$40,000 Approved suppliers
Bonds, Licenses and Business Permits $1,000-$5,000 Agencies
Additional Funds – 6 months $650,000-$1,000,000 Agencies
Total Estimated Initial Investment $790,750-$1,412,500

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Does

Byrider

provide

training

to its

franchisees?

Yes,
Byrider
provides
training

Byrider offers a detailed and structured training program for its franchisees, which includes several components:

  1. Initial Training Program: This program is mandatory for the franchisee's designated manager and up to three additional employees. It includes approximately two weeks of combined classroom and on-the-job instruction. The training covers various operational aspects such as sales and marketing methods, financial controls, maintenance of quality standards, customer service techniques, record keeping, reporting procedures, and other operational issues. The training is conducted at Byrider's headquarters or another designated location. Franchisees are responsible for all related expenses, including travel, accommodation, and employee salaries.
  2. Classroom Training Certification: Participants who complete the training sessions to Byrider Franchising's satisfaction become classroom training certified in each area. Trainees receive certificates indicating successful completion of training in various areas. The training is provided by experienced Byrider Franchising staff members with extensive experience in related industries.
  3. Additional Training: Byrider may require franchisees, their managers, or employees to attend additional training programs from time to time. These are conducted at the company's principal offices or other locations chosen by the company.

Does

Byrider

provides

territory

protection?

Franchisees under the Byrider Franchising system are granted a non-exclusive franchise to operate their business. While they are provided with a designated "Protected Territory," it's important to note that this territory is not exclusive.

The company commits not to operate or grant another franchise for a Byrider Business within this protected territory. However, if a franchisee defaults on the Franchise Agreement and fails to remedy the situation within the stipulated cure period, exceptions to this commitment can be made.

Despite the provision of a protected territory, franchisees might still encounter competition. This competition can arise from other franchisees, outlets owned directly by Byrider Franchising, or other distribution channels or competitive brands that Byrider Franchising controls.

Can a

Byrider

franchise

be run as

a passive

investment?

As an owner of the Business, you are not required to conduct on-premises supervision or to personally participate in the direct operation of the Business. However, the Business must always be under the direct, on-location supervision of a trained and competent employee acting as the Designated Manager.

Additionally, all employees must complete training, and ongoing training is necessary when deemed appropriate.

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