The benefits of these jobs to the community are immediate because employees and customers are the community. The profits feed right back into the local area. Really, the only people the franchise model isn’t good for are Wall Street billionaires. Yet another staggering number is the $125 billion in total sales that Texas’s franchised auto dealers made in 2024. That equates to nearly $2 million in state and federal income taxes and $7.8 billion in state sales tax. Those are impressive numbers, and though there are certainly outliers, most franchised dealerships fit into the “main street” business mold. They are not what one would classify as a mom-and-pop shop nor are they considered a billionaire class. Simply put, they are affluent “main street” community businesses. While not immune to consolidation by larger corporations, for the most part, dealerships remain a fundamentally local small business that lives and dies by their community, selling person to person to their neighbors. The recent efforts of new tech manufacturers to disrupt the franchised dealership system — which has thrived for over 100 years — have not succeeded. What leaders from new tech companies fail to realize is how expensive it is to get a storefront, customize and brand it, fill it with inventory, hire staff and train them on the intricacies of the car make and model so the customer relationship can be built, nurtured and live well beyond the initial purchase of the vehicle. This carefully developed relationship happens over time and includes regular oil changes, service and repair, warranty work, and if all goes to plan, selling the customer their next new car when the time is right. Over the last decade, we’ve heard a lot of talking points about the usefulness of physical dealership stores. The talking heads spoke from one extreme to another, especially with Tesla and their internet model of selling cars. In statehouses across the nation, bills were filed, hearings were held, and legislation was passed in an effort to protect the franchised system. As the dust settles, the evidence is clear, the integration of a physical store with an online shopping option is the optimal retail model. Not because we said so, it’s because car buyers prefer a combination of physical and digital channels, and their money does the talking. The “bricks and clicks” model of selling cars is here to stay. While younger generations may prefer a digitally enhanced car buying experience, they still value physical touchpoints, choosing to gather information and make decisions based on a combination of online and physical channels. At the same time, older generations prefer an in-store car-buying experience but are increasingly engaging in online shopping options. The benefits of the franchised dealer model are the wide distribution network, personalized customer service, the ability to manage inventory and financing while providing a physical space for test drives and the final purchase experience. It also supports the car sales process and provides a deeply human interaction, one that can be facilitated, but not replaced, by technology, making the franchised auto dealership the epitome of “main street.” Helping Your Employees Stay Safe Behind The Wheel Every Choice Matters – Choose Federated® DriveSAFESM Federated DriveSAFESM Telematics can help your employees improve their daily driving habits. This combination of mobile app, in-vehicle tag, and online portal allows you to measure, rank, and provide feedback on employee driving behaviors so you can help them become safer drivers. Federated Mutual Insurance Company and its subsidiaries* | federatedinsurance.com 25.08 Ed.3/25 *Not licensed in all states. © 2025 Federated Mutual Insurance Company Commercial Insurance Property & Casualty | Life & Disability Income | Workers Compensation | Business Succession and Estate Planning | Bonding Scan to learn more about Federated DriveSAFESM Telematics and how you can help your employee drivers stay safe behind the wheel. The content of this publication is for general information purposes only and should not be considered legal advice or an offer of insurance. Coverage will be determined solely by the terms of your policy, if approved for issue. Consult with a qualified professional to discuss questions specific to your circumstances. ® continued from pg. 24 DEALERS’ CHOICE 26
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