Table of Contents
What is a dealership franchise and how does it work
Difference between new and used car franchises
How much does it cost to set up a dealership franchise
What the franchise gives you and what it doesn't
The main car franchises in Spain in 2026
When it pays off and when it doesn't
The alternative: setting up an independent dealership
Dealcar and the independent dealership that wants to grow with structure
Frequently asked questions
What is a dealership franchise and how does it work
A dealership franchise is an agreement by which a company (the franchisor) grants a third party (the franchisee) the right to operate under its brand, processes and business system in exchange for an entry fee and periodic royalties on turnover or profit.
In the automotive sector, the term "franchise" is used in two different ways. The first is the official brand concession: the agreement by which a dealership sells new cars of a specific brand (Volkswagen, Toyota, BMW) under its standards and with its backing. The second is the used car franchise: a business model where the franchisee operates under a recognised used car brand (Flexicar, Clicars, AutoHero) with its processes and support.
In both cases, the franchisee pays to use the brand and the system. In return, they get recognition, training, tools and in some cases access to stock or finance. What they do not get is total freedom to make decisions: the franchisor's conditions determine what you can sell, at what prices, with what processes and with which suppliers.
Difference between new and used car franchises
Official brand concessions for new vehicles are the oldest model in the sector. An official Seat dealership, for example, has access to the brand's new vehicle stock, its warranty network, its financing and its national advertising. In return, it must comply with the brand's facility standards (size of the premises, corporate image, workshop equipment), meet periodic sales targets and limit itself to selling the models of that brand or brands of the same group.
The cost of entry for an official concession is very high: facilities can require investments of between £500,000 and several million euros depending on the brand and location. It is not an accessible model for most entrepreneurs who are thinking of setting up a dealership.
Used car franchises have a lower entry cost and a different structure: there is no brand-owned stock, but rather a valuation, purchasing and sales system for used cars under the franchisor's processes. The franchisee provides the premises and the operations; the franchise provides the brand, the software, the training and in some cases access to leads or supply networks.
How much does it cost to set up a dealership franchise
The investment ranges vary greatly depending on the type of franchise and the brand.
For a medium-sized used car franchise, the usual initial investment includes the entry fee (between £15,000 and £60,000 depending on the brand), adapting the premises to image standards (between £20,000 and £100,000 depending on the state of the premises and requirements), the initial stock of vehicles (variable, but between £150,000 and £400,000 to start with an operational inventory of 20 or 30 cars) and working capital for the first few months of operations (between £30,000 and £80,000).
Read also what stock finance is and how to finance your initial inventory.
In total, a medium-sized used car franchise requires between £250,000 and £600,000 in initial investment, without counting stock financing.
In addition to the entry fee, most franchises charge monthly royalties on turnover, usually between 3% and 8%. In a dealership with £500,000 in annual turnover, that means between £15,000 and £40,000 a year in recurring costs just for using the brand and system.
What the franchise gives you and what it doesn't
What the franchise actually does provide is immediate brand recognition (you don't have to build it from scratch), a proven system of processes that reduces the learning curve, initial and sometimes ongoing training, management tools and in some franchises access to a supply network or leads generated by the brand nationally.
Read where the most efficient dealerships buy cars.
What the franchise does not provide, even though it is sometimes implied that it does, is guaranteed profitability. A franchise with a good brand does not sell cars for you: you need the same operations, the same sales team and the same management as an independent dealership. The brand opens doors but does not close sales.
Nor does it give you operational freedom. If the franchisor changes its processes, pricing or contract terms, you adapt or you breach the agreement. If they decide to open another franchisee in your area, they can do so depending on what the contract says. If you want to work with a supplier or a portal that is not on their approved list, you might not be able to.
The franchise agreement usually lasts between 5 and 10 years with renewal and exit clauses that should be reviewed with a specialised lawyer before signing. Penalties for early exit can be very high.
The main car franchises in Spain in 2026
In the used car segment, the brands with the largest presence in Spain in franchise or similar format are Flexicar (more than 200 locations, belonging to the Volkswagen Group), Clicars (hybrid model between franchise and self-management), AutoHero (subsidiary of AUTO1 Group, operating mainly online) and some smaller regional networks.
In the new car segment, official concessions remain in the hands of major groups (Bergé, Domingo Alonso, Caetano, Grupo Sesé and others) that control most of the concessions of premium and volume brands. Access as an individual entrepreneur to an official brand concession is very limited in 2026: brands prefer to work with established groups that have financial backing and proven experience.
When it pays off and when it doesn't
A franchise pays off when you have no prior experience in the sector and the cost of learning to operate on your own exceeds the cost of the royalties. An entrepreneur without contacts in the sector, without knowledge of supply channels and without experience in stock management can significantly reduce their learning curve by entering under a franchise with a proven system.
Check the most common mistakes when buying used cars as a dealership.
It also pays off when the franchisor's brand has real traction in your area and that recognition gives you access to buyers that would otherwise take you years to secure.
It does not pay off when you already have experience in the sector and know the buying and selling channels. In that case, royalties are a pure cost that does not bring you anything you couldn't build yourself. Neither does it pay off when the premises required by the franchise have a rental cost that does not fit your financial model, or when the contract conditions tie you to suppliers or portals that are not the most competitive in your market.
The alternative: setting up an independent dealership
An independent dealership without a franchise has much lower entry costs (the premises, the initial stock and operations, without fee or royalties), total freedom to choose suppliers, portals, tools and processes, and the entire margin of the operation without percentages for the franchisor.
See the complete guide on how to open a second-hand car dealership.
The trade-off is that you have to build the brand from scratch, there is no proven system to rely on, and the first few months or years have a steeper learning curve.
For most entrepreneurs with some experience in the sector or with access to mentors or industry networks, an independent dealership generates more profitability in the medium term than a franchise. The breakeven of an independent business is usually quicker because it does not carry the drag of monthly royalties.
Check how much an independent car dealership actually makes.
Dealcar and the independent dealership that wants to grow with structure
One of the reasons why entrepreneurs choose a franchise is the structure: a management system, defined processes and tools that work. Dealcar offers that same structure to independent dealerships without the conditions of a franchise contract.
The platform centralises the management of stock, leads, sales files, multi-posting on portals and agency administration, with AI agents that automate repetitive tasks. It is the infrastructure of a well-organised business without depending on any franchisor. If you want to see how it works, request a demo at dealcar.io.
Frequently asked questions
Do I need prior experience to open a dealership franchise?
Most used car franchisors do not require prior automotive experience, although they do value experience in business management or sales. The franchisor's initial training covers the technical aspects of the sector. That said, entering the sector without any prior experience and under a franchise implies learning many things at once, which can lead to costly mistakes in the first few months.
Can the entry fee of a franchise be negotiated?
In some cases, yes. Franchises with many available locations or that are in an expansion phase have more room to negotiate the entry fee or the conditions of the first few months. Established brands with a waiting list of franchisees have less incentive to negotiate. The key is to enter negotiation with clear market information and concrete proposals, not generic requests for a discount.
What happens if I want to leave the franchise before the contract ends?
It depends on the specific clauses of the contract. Usually, there is a financial penalty proportional to the time remaining on the contract, the obligation to return brand materials and signage, and in some cases restrictions on operating in the same sector for a period of time after leaving. Reviewing these clauses with a lawyer specialising in franchises before signing is essential.
Does a used car franchise guarantee me access to stock?
It depends on the franchisor. Some franchises have their own supply networks or agreements with auctions and rental companies that facilitate access to vehicles. Others simply give you the brand and the processes: you source the stock yourself. This is one of the points that must be clarified before signing, because access to stock is one of the biggest bottlenecks for a starting dealership.
Table of Contents
What is a dealership franchise and how does it work
Difference between new and used car franchises
How much does it cost to set up a dealership franchise
What the franchise gives you and what it doesn't
The main car franchises in Spain in 2026
When it pays off and when it doesn't
The alternative: setting up an independent dealership
Dealcar and the independent dealership that wants to grow with structure
Frequently asked questions
What is a dealership franchise and how does it work
A dealership franchise is an agreement by which a company (the franchisor) grants a third party (the franchisee) the right to operate under its brand, processes and business system in exchange for an entry fee and periodic royalties on turnover or profit.
In the automotive sector, the term "franchise" is used in two different ways. The first is the official brand concession: the agreement by which a dealership sells new cars of a specific brand (Volkswagen, Toyota, BMW) under its standards and with its backing. The second is the used car franchise: a business model where the franchisee operates under a recognised used car brand (Flexicar, Clicars, AutoHero) with its processes and support.
In both cases, the franchisee pays to use the brand and the system. In return, they get recognition, training, tools and in some cases access to stock or finance. What they do not get is total freedom to make decisions: the franchisor's conditions determine what you can sell, at what prices, with what processes and with which suppliers.
Difference between new and used car franchises
Official brand concessions for new vehicles are the oldest model in the sector. An official Seat dealership, for example, has access to the brand's new vehicle stock, its warranty network, its financing and its national advertising. In return, it must comply with the brand's facility standards (size of the premises, corporate image, workshop equipment), meet periodic sales targets and limit itself to selling the models of that brand or brands of the same group.
The cost of entry for an official concession is very high: facilities can require investments of between £500,000 and several million euros depending on the brand and location. It is not an accessible model for most entrepreneurs who are thinking of setting up a dealership.
Used car franchises have a lower entry cost and a different structure: there is no brand-owned stock, but rather a valuation, purchasing and sales system for used cars under the franchisor's processes. The franchisee provides the premises and the operations; the franchise provides the brand, the software, the training and in some cases access to leads or supply networks.
How much does it cost to set up a dealership franchise
The investment ranges vary greatly depending on the type of franchise and the brand.
For a medium-sized used car franchise, the usual initial investment includes the entry fee (between £15,000 and £60,000 depending on the brand), adapting the premises to image standards (between £20,000 and £100,000 depending on the state of the premises and requirements), the initial stock of vehicles (variable, but between £150,000 and £400,000 to start with an operational inventory of 20 or 30 cars) and working capital for the first few months of operations (between £30,000 and £80,000).
Read also what stock finance is and how to finance your initial inventory.
In total, a medium-sized used car franchise requires between £250,000 and £600,000 in initial investment, without counting stock financing.
In addition to the entry fee, most franchises charge monthly royalties on turnover, usually between 3% and 8%. In a dealership with £500,000 in annual turnover, that means between £15,000 and £40,000 a year in recurring costs just for using the brand and system.
What the franchise gives you and what it doesn't
What the franchise actually does provide is immediate brand recognition (you don't have to build it from scratch), a proven system of processes that reduces the learning curve, initial and sometimes ongoing training, management tools and in some franchises access to a supply network or leads generated by the brand nationally.
Read where the most efficient dealerships buy cars.
What the franchise does not provide, even though it is sometimes implied that it does, is guaranteed profitability. A franchise with a good brand does not sell cars for you: you need the same operations, the same sales team and the same management as an independent dealership. The brand opens doors but does not close sales.
Nor does it give you operational freedom. If the franchisor changes its processes, pricing or contract terms, you adapt or you breach the agreement. If they decide to open another franchisee in your area, they can do so depending on what the contract says. If you want to work with a supplier or a portal that is not on their approved list, you might not be able to.
The franchise agreement usually lasts between 5 and 10 years with renewal and exit clauses that should be reviewed with a specialised lawyer before signing. Penalties for early exit can be very high.
The main car franchises in Spain in 2026
In the used car segment, the brands with the largest presence in Spain in franchise or similar format are Flexicar (more than 200 locations, belonging to the Volkswagen Group), Clicars (hybrid model between franchise and self-management), AutoHero (subsidiary of AUTO1 Group, operating mainly online) and some smaller regional networks.
In the new car segment, official concessions remain in the hands of major groups (Bergé, Domingo Alonso, Caetano, Grupo Sesé and others) that control most of the concessions of premium and volume brands. Access as an individual entrepreneur to an official brand concession is very limited in 2026: brands prefer to work with established groups that have financial backing and proven experience.
When it pays off and when it doesn't
A franchise pays off when you have no prior experience in the sector and the cost of learning to operate on your own exceeds the cost of the royalties. An entrepreneur without contacts in the sector, without knowledge of supply channels and without experience in stock management can significantly reduce their learning curve by entering under a franchise with a proven system.
Check the most common mistakes when buying used cars as a dealership.
It also pays off when the franchisor's brand has real traction in your area and that recognition gives you access to buyers that would otherwise take you years to secure.
It does not pay off when you already have experience in the sector and know the buying and selling channels. In that case, royalties are a pure cost that does not bring you anything you couldn't build yourself. Neither does it pay off when the premises required by the franchise have a rental cost that does not fit your financial model, or when the contract conditions tie you to suppliers or portals that are not the most competitive in your market.
The alternative: setting up an independent dealership
An independent dealership without a franchise has much lower entry costs (the premises, the initial stock and operations, without fee or royalties), total freedom to choose suppliers, portals, tools and processes, and the entire margin of the operation without percentages for the franchisor.
See the complete guide on how to open a second-hand car dealership.
The trade-off is that you have to build the brand from scratch, there is no proven system to rely on, and the first few months or years have a steeper learning curve.
For most entrepreneurs with some experience in the sector or with access to mentors or industry networks, an independent dealership generates more profitability in the medium term than a franchise. The breakeven of an independent business is usually quicker because it does not carry the drag of monthly royalties.
Check how much an independent car dealership actually makes.
Dealcar and the independent dealership that wants to grow with structure
One of the reasons why entrepreneurs choose a franchise is the structure: a management system, defined processes and tools that work. Dealcar offers that same structure to independent dealerships without the conditions of a franchise contract.
The platform centralises the management of stock, leads, sales files, multi-posting on portals and agency administration, with AI agents that automate repetitive tasks. It is the infrastructure of a well-organised business without depending on any franchisor. If you want to see how it works, request a demo at dealcar.io.
Frequently asked questions
Do I need prior experience to open a dealership franchise?
Most used car franchisors do not require prior automotive experience, although they do value experience in business management or sales. The franchisor's initial training covers the technical aspects of the sector. That said, entering the sector without any prior experience and under a franchise implies learning many things at once, which can lead to costly mistakes in the first few months.
Can the entry fee of a franchise be negotiated?
In some cases, yes. Franchises with many available locations or that are in an expansion phase have more room to negotiate the entry fee or the conditions of the first few months. Established brands with a waiting list of franchisees have less incentive to negotiate. The key is to enter negotiation with clear market information and concrete proposals, not generic requests for a discount.
What happens if I want to leave the franchise before the contract ends?
It depends on the specific clauses of the contract. Usually, there is a financial penalty proportional to the time remaining on the contract, the obligation to return brand materials and signage, and in some cases restrictions on operating in the same sector for a period of time after leaving. Reviewing these clauses with a lawyer specialising in franchises before signing is essential.
Does a used car franchise guarantee me access to stock?
It depends on the franchisor. Some franchises have their own supply networks or agreements with auctions and rental companies that facilitate access to vehicles. Others simply give you the brand and the processes: you source the stock yourself. This is one of the points that must be clarified before signing, because access to stock is one of the biggest bottlenecks for a starting dealership.
