Most people researching franchise dealership requirements find the same basic list: get capital, write a business plan, apply to the manufacturer. That list is not wrong. It is incomplete. It skips the facility and equipment requirements that consume 60 to 80 percent of the total investment — and the operational standards that determine whether the manufacturer approves your application in the first place. For comprehensive guidance, see our how to start a car dealership resource.
We are Auto Lift Services, and we build and equip dealership service departments for new franchise facilities and existing dealer renovations across the country. We partner with general contractors including our partner construction companies to deliver complete facility projects backed by a minimum two-year warranty on the building and everything in it. We do not sell franchises. But we work closely with franchise applicants during the facility planning stage, and we see exactly where applicants underestimate what the OEM actually requires.
This article covers the full scope of what manufacturers demand — capital, experience, facility standards, equipment mandates, territory rules, and the application process — so you can evaluate whether a franchise is realistic before you invest the time and money to apply.
Experience Requirements: 5+ Years in the Industry
Every major manufacturer requires franchise applicants to demonstrate meaningful automotive industry experience. The specific threshold varies by brand, but the general standard is a minimum of 5 years in a management or ownership role within the automotive industry.
What counts as qualifying experience:
Direct dealership experience. General manager, sales manager, service director, dealer principal, or co-owner of an existing franchise. This is the strongest qualification.
Automotive group management. Financial controller, operations director, or regional manager for a dealer group. Multi-franchise operators get preference because they have demonstrated the ability to manage OEM relationships.
Adjacent industry with automotive relevance. Fleet management, automotive wholesale, commercial vehicle operations. These may qualify for certain brands but typically require a stronger financial and business plan to compensate for the lack of retail franchise experience.
What does not count: owning an independent repair shop without franchise experience, running a used car lot, or automotive enthusiasm without operational history. Manufacturers are awarding a franchise worth millions in brand equity — they require proof that you can run one.
Some brands will accept applicants with strong business experience outside of automotive if they plan to hire experienced dealer management. But the application must identify those hires by name and include their credentials.
Capital Requirements by Brand Tier
The capital requirement is not just the franchise fee. It is the total investment the manufacturer expects you to make in the facility, equipment, inventory, and operating reserves. Franchise dealership requirements include proof that you have access to this capital before the application is considered.
Mainstream brands (Chevrolet, Ford, Toyota, Honda, Hyundai, Kia): $2 million to $5 million. This covers land acquisition or long-term lease, facility construction or renovation to OEM image standards, full service department equipment package, parts department inventory, working capital for the first 6 to 12 months, and the franchise fee itself.
Premium brands (BMW, Mercedes-Benz, Audi, Lexus, Acura): $5 million to $10 million. Premium brands require larger facilities with more elaborate customer areas, more extensive service equipment including brand-specific diagnostic tools, and higher initial parts inventory. Facility design programs are more prescriptive and more expensive to implement.
Luxury and exotic brands (Porsche, Ferrari, Lamborghini, Land Rover): $10 million+. Facility requirements at this tier include architectural design mandates that can double construction costs, specialized service equipment for high-performance and exotic vehicles, and customer amenities that exceed what mainstream brands require. A Porsche Destination Dealership can run $15 million to $25 million for the complete facility.
These are not ranges the manufacturer publishes in a brochure. They come from the reality of what it costs to meet manufacturer standards once you add up the facility, equipment, inventory, and operating capital the OEM expects to see in your business plan.
The Franchise Fee: $30,000 to $500,000
The franchise fee is the cost of the franchise agreement itself — the right to represent the brand in your territory. It is often the smallest line item in the total investment, but it gets the most attention because it is the most visible.
Mainstream brand franchise fees: $30,000 to $100,000. Some manufacturers have a standard fee. Others scale the fee based on market size and exclusivity.
Premium brand franchise fees: $75,000 to $250,000. Higher brand equity commands a higher entry fee.
Luxury and exotic brand franchise fees: $200,000 to $500,000. Limited distribution networks, high brand value, and significant manufacturer marketing investment drive fees at the top of the range.
The franchise fee is typically non-refundable and due upon execution of the franchise agreement. It is separate from the facility investment, inventory commitment, and working capital requirements. An applicant who can afford the franchise fee but not the facility is not a viable candidate.
OEM Facility Standards: Your Building Is Part of the Application
This is where franchise dealership requirements become a construction project. Every major manufacturer maintains a facility image program that specifies building design, materials, signage, customer areas, service department configuration, and equipment standards. These programs are not guidelines — they are contractual requirements.
GM Essential Brand Elements. Specifies exterior architecture, interior customer areas, signage systems, and service department minimum standards. Updated approximately every 7 to 10 years. Current program requires digital signage, specific customer lounge configurations, and EV-ready service infrastructure.
Ford Trustmark Design Program. Detailed architectural standards for the exterior, showroom, and service area. Includes specific requirements for the service drive design, customer write-up area, and service waiting lounge.
Toyota Image USA II. Prescribes exterior materials, roof lines, glass-to-wall ratios, and interior layouts. Includes specific service department standards for bay configuration, customer drop-off flow, and parts department access.
Hyundai and Kia Global Design Identity. Updated facility standards reflecting the brands’ market repositioning. Higher-end interior materials, expanded customer areas, and updated exterior architecture compared to previous programs.
The manufacturer will review your facility plan as part of the franchise application. If you are proposing a new build, the architectural plans must align with the current image program before the manufacturer will approve. If you are buying an existing location, the manufacturer will require a renovation plan that brings the facility into current compliance — and a timeline for completion.
The facility plan is where applicants underestimate the cost by the widest margin. Meeting OEM facility standards for the building alone — without counting equipment — can add $500,000 to $3 million beyond basic commercial construction costs depending on brand and market.
Equipment Requirements: What the OEM Specifies
As part of the franchise agreement, the manufacturer specifies minimum equipment requirements for the service department. These are not suggestions. They are conditions of franchise approval.
Lifts. The OEM specifies minimum bay counts and lift capacity requirements based on the vehicles in their lineup. A truck-heavy brand like Chevrolet or Ford requires higher-capacity lifts — 12,000 to 15,000 lb minimum on most bays. We spec Rotary and Challenger two-post lifts for these requirements. Rotary SmartLift inground lifts are increasingly specified for express service lanes where floor space efficiency matters.
Alignment. Most franchise agreements now require Hunter-class alignment systems with current OEM specification databases. ADAS calibration capability is increasingly specified as a minimum requirement, not an optional add-on. A Hunter HawkEye Elite with ADAS runs $50,000 to $80,000 installed. (See also: dealership alignment bay.)
Tire and wheel. Leverless tire changers (Hunter, Rotary) are the standard for franchise service departments. Road force balancers are required or strongly recommended by most brands.
AC machines. R-1234yf-capable machines (RobinAir, Mahle, Rotary) are a universal requirement. Some OEMs specify particular brands or models that integrate with their diagnostic systems.
Brake lathes. Hunter on-car and bench brake lathes meet the standard across all franchise brands.
Brand-specific diagnostic tools. This is the equipment category unique to franchise dealers. Each OEM requires its proprietary diagnostic platform — GM’s MDI 2, Ford’s VCM II, Toyota’s Techstream, BMW’s ISTA. These are not optional and not interchangeable. Budget $5,000 to $25,000 per brand for diagnostic hardware and annual software licensing.
EV infrastructure. Every major OEM now includes EV service requirements in franchise dealership requirements. Level 2 charging at minimum. DC fast charging for brands with full-EV lineups. High-voltage PPE, insulated tools, battery handling equipment, and technician certification. Budget $50,000 to $200,000 for EV readiness depending on brand requirements and charger count. (See also: EV dealership requirements.)
Territory and PMA Rules
Manufacturers control where dealers can open through Point of Market Area (PMA) designations. A PMA is a geographic zone assigned to each franchise location that defines the dealer’s primary sales territory. OEMs use population density, vehicle registration data, and competitive presence to determine how many franchise points a market can support.
What this means for applicants:
You cannot just open anywhere. Even if you have the capital and the experience, the manufacturer must have an open point — an available franchise opportunity — in your target market. If the PMA is fully awarded, you must wait for an existing dealer to sell or close.
Open points are competitive. When a manufacturer designates an open point, multiple applicants typically compete for it. The strongest combination of capital, experience, and facility plan wins.
Existing dealer protest rights. In most states, when a manufacturer proposes a new point in or near an existing dealer’s PMA, the existing dealer has the right to protest. State franchise laws vary, but protest proceedings can delay or block new franchise awards.
Territory size varies by brand and market. A mainstream brand in a metro area might have 5 to 10 franchise points covering the MSA. A luxury brand in the same market might have 1 to 3.
The Application Process: 60 Days to 6 Months
The franchise application process varies by manufacturer, but the typical timeline runs 60 days for initial application review to 6 months for full approval including facility plan review.
Phase 1: Initial application. Financial disclosure, personal background, industry experience, market analysis, preliminary business plan. The manufacturer evaluates whether you meet the minimum qualifications. Timeline: 30 to 60 days for a response.
Phase 2: Detailed business plan. If you pass initial screening, the manufacturer requests a comprehensive plan including: detailed financial projections, facility plan with architectural renderings, equipment specification, staffing plan, marketing strategy, and timeline to opening. This is where the facility plan and equipment budget become central to the application.
Phase 3: Facility and site review. The manufacturer’s real estate and facility team reviews the proposed location, the architectural plan, and the equipment specification. They verify OEM image compliance and confirm the facility will meet OEM standards at opening. This may include a site visit.
Phase 4: Franchise agreement. If all phases are approved, the manufacturer issues the franchise agreement. This is the legally binding contract that grants you the right to sell and service vehicles under their brand. It specifies ongoing obligations including facility maintenance, equipment updates, training requirements, and minimum performance standards.
We Build the Service Department That Gets You Approved
Our role in the franchise application process is the service department facility plan and equipment specification. We provide the detailed equipment package, cost breakdown, anchor bolt templates, electrical requirements, compressed air sizing, and every other technical specification the manufacturer’s facility team needs to approve your plan.
We coordinate with your architect and general contractor — whether it is our partner construction companies, our partner construction companies, or another firm — to make sure the service department design meets OEM requirements and supports the equipment package from day one.
We then install everything, service it after installation, and warrant the building and all equipment for a minimum of two years.
If you are evaluating franchise dealership requirements and need the equipment side of the business plan built by the people who actually install it, reach out. We have equipped enough franchise service departments to know exactly what the OEMs expect and what it actually costs.
Auto Lift Services — (800) 674-9302 — info@autoliftserv.com
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Josiah Ragsdale
Founder, Automotive Lift Services
Josiah has been installing, repairing, and inspecting automotive lifts since he was 18 years old. He founded Automotive Lift Services in 2019 after years of seeing lifts installed wrong, never inspected, and putting technicians at risk. His team now services all 50 states from their Iowa headquarters. Read more
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