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How to Open a Toyota Dealership

by Candice Mancini

Opening a Toyota dealership is a competitive process. You must have relevant experience, financial means and a clean criminal record. Finding an available franchise in your area of choice can be an additional challenge, since Toyota limits the number of dealerships by geographic location. A decline in profits and a slip in its place on Fortune's Global 500 rankings in 2011 -- from eighth to tenth -- reaffirmed the company's focus on global markets, where the best new franchise opportunities exist. To own a Toyota franchise in the U.S., you must buy an existing one.

Application and Experience

To qualify for ownership of a Toyota franchise, you must fill out an application, which inquires about your business experience and educational qualifications. Relevant experience includes managing or owning another automobile dealership or similar operation, such as a motorcycle dealership. Also helpful is a college degree in business, marketing, finances or accounting. You should have knowledge about managing employees, orders, sales, warranties, service and parts.

New or Established Dealership

Determine whether you want to buy an existing Toyota franchise or open a new one. Existing automobile dealerships that are for sale can be found through the website of the National Business Brokers or by consulting dealership brokerage firms. Toyota offers information about new dealership opportunities on their website. As of September 2013, Toyota was seeking dealerships franchises in India, and provided an application form for interested parties.

Clean Financial and Criminal Background

Toyota conducts a comprehensive background check on potential franchisees. The company checks criminal records and credit histories, including any bankruptcies. Under the Fair Credit Reporting Act, Toyota must obtain your written consent before it can investigate your credit history. If it finds a criminal conviction or poor credit, your application could be denied.

Know State Laws

Several states regulate franchise sales, according to the Bureau of Consumer Protection. If you are considering purchasing an existing Toyota franchise in the United States, call your Attorney General's office to learn about franchising laws and regulations in your state. If your interests lie overseas, contact the country's small business organizations, chambers or commerce and business leaders.

Know Your Franchise and Terms

Investigate all aspects of the business before you buy it. Talk to other Toyota franchisees, asking them about their total investment, how long it took for them to turn a profit, whether the franchisor's training was sufficient and their overall satisfaction with owning the dealership. Read the franchise agreement, sublease and any other applicable documents, such as relating to advertising payments, royalties, operating licenses, real estate improvements, training, legal fees, insurance and employee salaries and benefits. If something is unclear, ask Toyota to clarify.

Hire a Franchise Lawyer

Before you buy a Toyota franchise, make an appointment with a franchise lawyer to analyze the legal documents. The franchise contract will be written by Toyota; therefore, you need to ask for changes you want. A franchise lawyer can help you negotiate the best terms for yourself and advise you when something is non-negotiable.

About the Author

Candice Mancini has always loved matching people with career paths. After earning her master's degree in education from the University at Albany, she spent a decade teaching and writing before becoming a full-time writer. Mancini has published articles and books on education, careers, social issues, the environment and more.

Photo Credits

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