Team-BHP - Franchise opportunity: Opening a Mahindra First Choice service center?

Hi Friends, I'm currently in talks for a MFCS Service Center in Lucknow itself and will like to know the following:

1. If it is a worthy proposition to setup a service center on franchisee model of MFCS. Which involves approx. 10 lacs signup fee plus GST and security deposit and an additional Annual fee of Rs.7.5lacs plus GST

2. It will be really helpful if someone could enlighten me about the expected no of cars per month a service center can expect in the beginning phase.

3. Also, what can be the average cost per month that we can expect including manpower and marketing and promotion expense. We are looking at a 14000sqft shed area having a rent of 3lacs per month.

Please do post your replies.

P. S. Am a new member and this is my first post here, so I'd beg your pardon if I've stepped over any of the community rules here.

Are you completely new to the auto business? If so, here's what I would recommend before investing lakhs in this setup - Get WORK EXPERIENCE elsewhere. It will teach you invaluable lessons. Pick up a job in a big workshop in Lucknow itself to understand the local market.

Then, if you decide to go with Mahindra First Choice, be sure to focus on their used car business too. They are doing crazy volumes and are the 2nd largest organised player (Maruti True Value is no.1). The money you make from selling 1 used car could be equivalent to (or more than) what you make from servicing 15 cars.

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Quote:

Originally Posted by caharshkaran (Post 4361307)

1. If it is a worthy proposition to setup a service center on franchisee model of MFCS. Which involves approx. 10 lacs signup fee plus GST and security deposit and an additional Annual fee of Rs.7.5lacs plus GST

Questions:

1) I assume Rs. 10 Lakhs is refundable security deposit?

2) For annual fee of Rs. 7.5 Lakhs, what exactly are you getting from Mahindra Firstchoice? Just the brand name or something tangible? Like training for employees, spare parts supply etc?

Suggestions:

1) Bosch offers car servicing franchise opportunity too. Check with them for their terms.

2) Get your service center going first. After 12 months, perhaps you can evaluate your options and see if it makes sense to sign up with Mahindra Firstchoice or Bosch. Or perhaps build your own brand.

3) Regarding marketing and promotions, you will do well if you target brands that do NOT offer great service experience. Eg: Mitsubishi, Nissan, Fiat, Chevrolet, Skoda etc.

Quote:

Originally Posted by smartcat (Post 4362162)

Out of 10lacs signup is around 7 and security deposit is around 3

As correctly pointed out, they're offering training, spare parts supply daily like a milk run model but this seems more like on paper because practically a lot of people are carrying inventory of spares given the delays in supply and long turn around time for customers causes churning of customer base , they do a feedback call for our quality assessment and lastly they also have a technical helpdesk to resolve any queries about problems that workshop staff can't get a grasp about

Quote:

Originally Posted by caharshkaran (Post 4361307)

I am very sorry to be blunt. You are not ready for this venture. The questions you are asking are very basic. If you are not able to estimate your manpower expenses on your own, you shouldn't be venturing into this business. If you want random people on internet to tell you how many cars you are going to get for service in a specific market without any background data, you are not ready for this business. Save your money, gain some experience before you take such a risk. Once again, I am sorry to be so blunt.

Hi All, question on similar topic for which I am soliciting advise. Is it profitable to invest in a new RE motorcycle franchise, one of my family friends is asking me to join. He has worked in a big organisation managing PL for a division of 2k+ employees mostly blue collar workers, based on this experience of 5+ years he is confident of getting the approval from RE. He is mentioning about a 2cr deposit with RE and initial investment for 1cr for setting up showroom and workshop. And then assume a burn rate of 10lacs per month for 1 year will we be able to generate 20% returns after 1 year in business. Please advise...