Why Oil Change Franchises are Risky Investments

August 11, 2022

Although oil change franchises may seem like a practical franchise choice, they're becoming riskier by the day. Here's why you might want to reconsider.

Oil change franchises are appealing businesses for entrepreneurs with a passion for the automobile industry. Quick-lube franchises offer a recurring revenue stream and simple operations, all packaged in a recession-resistant package. Today’s car manufacturers recommend getting your oil changed twice a year, or every 7,500 miles, according to Consumer Reports. With nearly 284 million cars on the road in the United States, the market for oil change franchises appears strong. But there’s more that a potential business owner needs to consider before committing to an oil change franchise.

Rising Costs to Do Business
Increased demand and limited supply are sending the cost of a barrel of oil to nearly $120, twice as much as last summer, AAA reported. Evidence of the high cost of oil is seen at the gas pump, but it can impact the cost of numerous everyday items, including automobile oil. Conventional oil from fossil fuels is typically the least expensive option, and rising oil prices may cut into your margins or force you to raise prices.

Jump in Electric Car Production
High gas prices and improved technology are helping contribute to the rise in electric vehicle production. A number of automobile manufacturers are planning to debut new models of electric vehicles this year. Volkswagen is shopping for a location for a new electric vehicle production facility in the U.S. Ford is investing $3.7 billion to increase its electric vehicle production. Even GMC’s gas-guzzling Hummer is joining the mix with the launch of a new electric truck.

While electric vehicle growth has been slow compared with countries in Europe, the debut of electric SUVs and trucks is helping them gain traction in the U.S., S&P Global reported. Electric vehicles only account for 4.6% of the vehicles on the road in the U.S., but electric vehicle registrations rose 60% during the first quarter of this year, according to Car and Driver.

As the number of electric vehicles on the road rises, the customer base at oil change franchises will shrink, diminishing profit potential. Quick-lube franchises will have to make adjustments to stay afloat.

Limited Services Keep Ticket Prices Low
Many oil change franchises do their best to try to increase ticket prices by offering simple add-ons like windshield wiper blade replacement or air filters. Mechanic services are key to ramping in big profits. An oil change franchise offering a broader array of services may come at a higher price tag and require a line-up of experienced employees to operate smoothly.

CCI Holds Keys to Profitable Auto Franchise
Creative Colors International has a lucrative franchise opportunity that enables entrepreneurs to help customers reduce their carbon footprint and save money. Our technicians specialize in leather and vinyl repair and restoration and use water-based, non-toxic products to help return items to like-new condition. They fix rips, burns, scratches, and fading in leather and vinyl products. CCI’s repairs can save businesses and customers up to 90% in replacement costs.

  • Customer-First Philosophy. As a mobile franchise, CCI can schedule a repair to fit a customer’s schedule with minimal disruption to business. Our mobile vans are fully equipped to make the repair a customer needs on the spot. CCI franchise owners focus on having a “can-do” attitude, and they strive to be available, adaptable, flexible, and responsive to customer needs and expectations. 
  • Multiple Revenue Streams. A CCI franchise owner can take advantage of multiple revenue streams by providing services to a variety of industries, including automobile, commercial, foodservice, healthcare, and residential.
  • B2B and B2C Customers. CCI franchise owners secure business-to-business accounts at car dealerships, marinas, and foodservice establishments. The company also has national accounts at some of the country’s top brands, which helps franchise owners hit the ground running with their new business. In addition to a robust B2B business, CCI franchisees can take advantage of the company’s business-to-consumer services, helping make it an attractive investment.

Contact a CCI Franchise Advisor to Learn More
Play it safe with a mobile franchise opportunity that puts sustainability at the top of its priority list. If a car repair franchise with low overhead and a home office sounds appealing, contact CCI and learn more about becoming a mobile franchise owner.