Investing in a HD franchise. You're now an owner. Would you?
#51
04-19-2007, 07:58 PM
RE: Investing in a HD franchise. You're now an owner. Would you?
ORIGINAL: old95
I think this says it all
I think this says it all
ORIGINAL: JohnT
All emotion aside, from a pure business standpoint, I don't think now would be a good time to invest in a Harley, or any other high end, dealership. The economy is flat, discretionary income levels are low, the re-finance bubble has burst, interest rates are climbing, the housing market is flat or sinking, etc. Also, in the Harley scenario, they need to find a better way (than continuing to lean out their existing engine line) to deal with EPA compliance in the long term. Other manufacturers already meet the 2008 spec, and a few, the 2010 spec.
Five years ago,a Harley dealershipwould have been a great investment. Now? Not with my money. I've go better things to do with it, at least until the above issues get sorted out.
All emotion aside, from a pure business standpoint, I don't think now would be a good time to invest in a Harley, or any other high end, dealership. The economy is flat, discretionary income levels are low, the re-finance bubble has burst, interest rates are climbing, the housing market is flat or sinking, etc. Also, in the Harley scenario, they need to find a better way (than continuing to lean out their existing engine line) to deal with EPA compliance in the long term. Other manufacturers already meet the 2008 spec, and a few, the 2010 spec.
Five years ago,a Harley dealershipwould have been a great investment. Now? Not with my money. I've go better things to do with it, at least until the above issues get sorted out.
The way I see it is now would be the absolute best time to make a business move, HD or anyhting else.
If you think interest is a negative right now, I can tell you weren't doing business a few years ago.Borrowing is acakewalk, and interest rates are still pretty sweet.
#52
04-19-2007, 07:59 PM
Stellar HDF Member
RE: Investing in a HD franchise. You're now an owner. Would you?
if i had the means ($) and opportunity- i would give it a shot. having said that- HD is so well established that im very surprised that they dont have 'factory' retail stores thatare just like a dealership.
many years ago (like 15 or more) my father inquired about opening a Rita's Water Ice franchise. one thing led to another and he didnt do it. at the time- something like $60K was the start-up number. the last time he checked- it had increased to like $250K and the franchises are EVERYWHERE in and around Philly.
he shouldve jumped on it.
many years ago (like 15 or more) my father inquired about opening a Rita's Water Ice franchise. one thing led to another and he didnt do it. at the time- something like $60K was the start-up number. the last time he checked- it had increased to like $250K and the franchises are EVERYWHERE in and around Philly.
he shouldve jumped on it.
#53
04-19-2007, 11:44 PM
RE: Investing in a HD franchise. You're now an owner. Would you?
ORIGINAL: Sam
Wayward, I understand what you are saying, but do the math. This is based on an area of aprrox. 150,000 people (the average population that a dealer has to draw from);
average dealer sells 250 bikes per year at anywhere from $2000 - $3000 in profit,
35 to 45% profit on accessories (average sales on parts..$300,000)
and 40% in clothing (average sales on clothing ($250,000).
The wages alone for a small dealership (approx 15 employees) will run you $500,000....there goes mostof your profit on bikes. Now, your profit from the clothing, service and parts departments goesto payHarley all of their fees (percentage of profit, advertising, brochures, etc), up-keep of the building, taxes, power, insurance (which is huge), etc, etc, etc,. When you are all done with that, you then get your bottom line, which is not a huge amount, sorry.
Yes, there are dealers that sell more than 250 bikes per year, but again, those are large city dealerships and you wouldn't get one of those anyway. A big dealer in say Texas will sell four times that amount, but across North America, there are a lot more small dealers, than large. Right now, since all the prime locations are already established, if anyone opened a Harley Dealership, they would be in the 250 group.
Wayward, I understand what you are saying, but do the math. This is based on an area of aprrox. 150,000 people (the average population that a dealer has to draw from);
average dealer sells 250 bikes per year at anywhere from $2000 - $3000 in profit,
35 to 45% profit on accessories (average sales on parts..$300,000)
and 40% in clothing (average sales on clothing ($250,000).
The wages alone for a small dealership (approx 15 employees) will run you $500,000....there goes mostof your profit on bikes. Now, your profit from the clothing, service and parts departments goesto payHarley all of their fees (percentage of profit, advertising, brochures, etc), up-keep of the building, taxes, power, insurance (which is huge), etc, etc, etc,. When you are all done with that, you then get your bottom line, which is not a huge amount, sorry.
Yes, there are dealers that sell more than 250 bikes per year, but again, those are large city dealerships and you wouldn't get one of those anyway. A big dealer in say Texas will sell four times that amount, but across North America, there are a lot more small dealers, than large. Right now, since all the prime locations are already established, if anyone opened a Harley Dealership, they would be in the 250 group.
I also sincerely doubt that the 15 employees are paid an average of 33k dollars a piece.
A well run dealership could make you a millionaire....a mediocre dealership will net mediocre results. Like any business you will get out of it what you put into it.
#54
04-20-2007, 02:51 AM
RE: Investing in a HD franchise. You're now an owner. Would you?
Nope, would not want to loose my passion for riding. Afraid that if I had to deal with MC's all week the last thing I would want to do in my fee time would be to ride.
#55
04-20-2007, 02:58 AM
RE: Investing in a HD franchise. You're now an owner. Would you?
I would. But then again a Tim Hortons franchise would be nice, they are a license to print money up here in Canada.
#56
04-20-2007, 02:58 AM
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RE: Investing in a HD franchise. You're now an owner. Would you?
ORIGINAL: Homer
Afraid that if I had to deal with MC's all week the last thing I would want to do in my fee time would be to ride.
Afraid that if I had to deal with MC's all week the last thing I would want to do in my fee time would be to ride.
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