Franchise Spotlight: Car hire
Analysis shows that franchises offer reliable and lucrative business models in the car hire sector.
Whether it be a car for a holiday, a weekend trip or the need for a temporary replacement vehicle, the likelihood is that most people have to hire a car at some point. Statistics show that the car rental market size in America is estimated to be around an incredible $23 billion. With this lucrative sector comes a host of franchise brands.
Car hire industry analysis
Analysis shows a dip in 2020 industry revenue in the car hire sector. The pandemic has seen a decline in tourism, leisure trips and travel in general and, in turn, a decrease in demand for car hire. Franchises, however, are better insulated and well-placed to weather economic downturns. Customers tend to turn to trusted brand names during times of instability. A well-known brand brings with it assurance of competitive prices, reliable vehicles and stringent health and safety and hygiene regulations - currently a high priority for customers. Furthermore, this dip in industry revenue is predicted to be only temporary – as the pandemic eases, people will be eager to travel again and with that comes a need for hire cars.
As well as having access to a proven business model, training and ongoing support, franchisees will have a competitive edge in this field as franchises tend to have strong allegiances with airlines and hotels. Furthermore, the marketing a franchise brand brings is often on a larger scale than any independent outlet.
Despite a bumpy year, the car hire sector looks set for a bright, long term future and franchises offer stable and lucrative business models.