Franchise - Driving Instructor - Good / Bad idea?

Shamrock128

Hi,

I was made redundant recently and I am looking at a possible career change. A major international insurance company are rolling out a new driving school in Ireland and are offering a franchise deal where they provide all the training required, a new car every year including maintenance, a centralised booking service and a major marketing campaign to promote the venture.

In return they want an initial set up fee for the franchise establishment & training and circa €290 + VAT per week (48 weeks in year one dropping to 44 weeks by year five) while operating the franchise.

Is this a resonable deal? Do any of you have experience in this field? I'd appreciate any insight or comments.

Thanks.

Lplated

How much is the franchise fee?

290 a week (+vat, reclaimable if you register as self employed for vat purposes), is reasonable depending on your turnover. Most franchises operate on a% of turnover model rather than a fixed minimum payment.

Who sets the price per lesson?

Shamrock128

Lplated,

Thanks for the reply. The initial set up fee is €2,000 + VAT - seems fairly resonable?

The lesson fee is set by the individual franchisee between a min and max as set by the company - average €38 per hour. So 7.7 hours per week to meet the weekly franchise fee (Net of VAT). I would set up as a sole trader so would be claiming the VAT back.

Are you in the trade? If so, how many hours per week can an intructor resonably expect? (I expect there is no straight forward answer to that one).

Thanks.

SOH32

Hi Shamrock - Costs don't sound prohibitive. Do you get exclusivity with the operator for your area/region? Have you considered competition issues from other driving schools etc Presumably willingness to do evening & weekend work will be key for you.

I'm in a similar position in that I'm out of work & researching various business models/start ups so Good luck with your research!

Lplated

No, i'm not in the trade.

2000 set up seems very reasonable, if it includes (as per your op) the car including maintenance on the car.

Shamrock128

SOH32 wrote: »

Hi Shamrock - Costs don't sound prohibitive. Do you get exclusivity with the operator for your area/region? Have you considered competition issues from other driving schools etc Presumably willingness to do evening & weekend work will be key for you.

I'm in a similar position in that I'm out of work & researching various business models/start ups so Good luck with your research!

You do get exclusivity with the operator in your area unless your area becomes too busy.

There seems to be a lot of competition in this sector but the operator is offering cheap (or free in some cases) insurance to customers who buy a lesson pack as an added incentive.

I expect the work would be mainly evenings and weekends and I'm ok with that.

Good luck with your own search for a new career!

moggie4000

Sounds like a great idea! Not much set up costs, will be interesting to see how it pans out.

Have you been offered the franchise? How many lessons would you do in a typical week?

Nuttzz

its 16k a year you need to earn before you feed yourself, fuel needs to be added to that €50 a week which I think is low would work out about 2500 for the year, so we are at 18.5k now

€38 for a hours lesson, thats works out about 10 hours of lessons a week to pay for the fee and car running costs. Thats could be 2 fulls days of lessons. Might be a good idea to talk to some driving instructors and see how many lessons they do on weekdays and over weekends.

DubTony

I've just glanced over this and to me the initial deal looks ok. But this business is becoming very, very competitive. A few years ago I thought of setting up a sort of co-op of independent driving instructors, but when I talked to a few, the measly 15% I'd need from each lesson left most of them with very little cushion. It seemed to me at the time that the guys who were very busy were just making an ok living, and the guys who were struggling were really ... well, struggling.

The new rules brought in by the RSA have added a greater up-front cost to this business lately. There are tests and courses required by law. I'm not sure of all the details but one guy moaned recently about having to dish out another €600 for some course or another. He's new to the business and is finding it very difficult to make ends meet. It's very competitive. He told me of one guy who does 10 lessons for €195. Hardly seems worth it. Research it well, before you take the plunge.

moggie4000

I'd like to hear from any driving instructors out there! Is there money to be made at this or not? Thinking of doing it part time first then fill time if it works out!

Shamrock128

Thanks for all the comments / advice

I will spend some more time researching this, as like some of you have said it seems to be a VERY competetive market.

The obvious and key question is what is the average number of lessons per week - 10 to meet costs alone. If one could manage an average of 25 lessons per week it would certainly be a decent enough earner.

Thanks again for the advice:)

2qk4u

Dont get into any franchise deal in the driving instruction industry. I know of instructors with franchise with a large Dublin driving school and they are only getting one hour a week from the school.
The industry is strugling at the moment, very little work coming in. The price of lessons is falling too.
If you have little or no experiance dont commit to somthing.
These new schools will leave the country just as quick as they come over and you will be left with nothing.
The driving instruction industry is flooded with schools. They are poping up all over the place.
I know Instructors with 10 years experience and cant even get 10 hours booked in a week.

Tipp-Boy

Can I suggest that a simple way to test demand would be to place an advert in your local paper and track the amount of calls you get - of course you can't actually give them the lessons but its a great way of doing market research for demand - surely its worth a weeks advertising costs.
Good luck in whatever you decided to do.

Snuggle Bunny

this business has got even harder this year. you will have to become an adi (approved driving instructor) with the road safety authority. it takes time to build up a reputation too and people are alot more price aware now. An adi now will charge between 30 to 40 euro. If even one is charging 30 in your area then that is the price you will have to charge. Its a demanding job. pm me if you want more info or advise.

Pdrive

in regard to the post made by 2q4u can you tell me what schools i should not go to for training don't want to go into a company that isnt Irish. pm me thanks paul:)