How Much Investment I need to start a MRF Tyres franchise?
Madras Rubber Factory aka MRF is a tyre manufacturing company with its headquarters in Chennai. This Indian multinational tyre manufacturing company is one of the largest manufacturers of tyres in India. Founded back in 1946 by K. M. Mammen Mappillai, MRF has had total assets worth INR 16,442 crores according to reports of last year (2022).
The history of MRF’s foundation begun in the mind of Mammen during the time of India’s Independence. Mammen was just an ordinary person who used to sell balloons in his early life to make a living. His father, on the other hand, contributed significantly towards India’s independence and had to even spend his days in jail. It was during this time when Mammen had to sell balloons and study at the same time.
MRF Tyres Franchise
MRF Tyres might have been founded back in the year 1946 but during its initial stages the company was a tiny toy balloon unit which was later expanded. It was not until the year 1960 during the month of November that the company had finally decided to enter the tyre manufacturing market and it made an easy process for the MRF tyre dealership profit.
The company had soon realised that they could start offering its dealerships to interested entrepreneurs. The company has got a significant market pull in today’s tyre manufacturing industry as it is one of the well-known companies in the world. It is only because of its brand name and goodwill MRF’s franchise or dealership could be a profitable business idea. Customers can get service around the clock and support is always available to assist the franchise partners.
Requirements To Get A MRF Franchise
There are three ways in which you could work with MRF and they are (retail partner, dealership, and distributorship). Some of the basic requirements for any franchise opening is space, manpower, and enough budget for the operation of business.
However, MRF being a solid and strong and a stable brand in the tyre manufacturing industry in India will not permit its franchise to anyone. There is a basic eligibility criteria that interested partners needs to fulfil so that they can open up MRF’s franchise.
Highlights of the eligibility criteria:
- The applicant applying for the dealership should at least be 21 years old or more.
- The application should have completed their 10th.
- The applicant must not have a criminal background or history of any such criminal activities.
- Must have knowledge or may have be expertised in the tyre manufacturing industry.
Once applicants check out the eligibility criteria it is now time to look at the resources and investment required to open up a franchise. The location should be ideal with enough parking space and enough floor area so that customers can get the best surrounding inside the outlet of MRF. MRF is a well-known brand that has its goodwill not only in India but abroad as well.
Manpower Required To Run A MRF Tyres Franchise
The minimum required staff/manpower to run a MRF Tyres franchise could be around 2-3 employees. However, they should not be like any other regular employees because they too should be experts and professionals when it comes to about tyres.
It is possible that they will be directly communicating with the ultimate customers which is why they need to be skilful, knowledgeable, and must be effective in their communication skills.
However, if your outlet receives maximum customers and it is being difficult for you to manage with a few staff members then you would have to hire more employees. You can offer them training on the field that they will be working on.
Area Required to start a MRF Tyre Franchise
The area required could be around 3200 sq ft of industrial space to operate the business of MRF’s franchise. The maximum investment will be on machinery and equipment and the area should be enough for all the machinery, furniture and all other equipment to easily fit.
However, it should also be spacious so that you can have a separate office for yourself so that you can conduct meetings whenever some client decides to purchase items from your store.
Customers should have the space to look at the products and they must feel comfortable rather than congested. The interiors and other physical outlook of the outlet should be properly looked at so that it does not create a bad impression on the customers.
Investment Required For MRF Tyres Franchise
There will be two types of investment that you would have to incur. They are the initial setup cost and the second one is the working capital. The recurring expenses that you face while running the business is the sole reason why you should have working capital ready. The initial setup cost could be around INR 30 lacs to 45 lacs depending on the location where you wish to open up MRF’s franchise.
The security deposit that MRF charges is INR 10 lacs. The initial inventory where you would have spend around INR 10-12 lacs. The remaining 8-10 lacs will be on your setup cost tab. This includes the interiors of the outlet, branding, machinery and equipments etc. Therefore, the initial investment require for MRF tyres franchise would be around INR 30-45 lacs.
The working capital, on the other hand, is a must required investment that you would have to make during thee initial stages. You need to have at least the expenses of 3 month duration. Say suppose the expense made for the first month is INR 1 lac then you must at least INR 3 lacs as working capital. Some of the expenses include the rent of the space, employee salary, electricity bill, and miscellaneous expenses.
Documents Required to get a MRF Tyres Franchise
Suppose you have applied for the franchise of MRF then you would have to provide some basic documents. You would have to submit all business related documents to MRF. Highlights for the documents required are as mentioned below.
- Rent agreement
- Trade license
- GST
- Current A/C
- Details of your bank account
- Personal records like (Aadhaar card, PAN card, Voter card)
- Address proof (electricity bill)
- Certificate of qualification (photograph, email address, phone number, cancelled cheque)
- Property records (sale deed/shop agreement, lease agreement, NOC)
Equipments and Suport Provided By MRF Tyres To Franchise Owner
MRF’s official website have revealed that the company will be offering marketing support, train the staff members and employees along with salesmen and also provide inputs to start and sustain the franchise. You can connect with the official personnel of the company to get more details about their support system to their franchise owners.
How To Get MRF Tyres Franchise?
To get the MRF franchise you would have to contact MRF tyre executives by filling out the official contact form from the website of the company. The official website where Business Opportunities page can be viewed to request for vital personal and official information from potential franchisees.
If your application is shortlisted then your application will be selected for further processes. The potential franchisee is contacted and a personal interview is conducted after which the entire process is completed. MRF dealerships can also be sought directly through their Chennai office.
MRF Tyres Franchise Profit Margin
The number of sales made by your outlet will determine the profit margin. Being a franchise owner you can expect a higher profit from the corporation if your outlet is being able to make enough sales. However, it also depends on how you work it out with your potential clients and customers.
If you decide to join with MRF as a retailer then you can expect a profit of 5% to 7%. If you wish to take MRF’s dealership then on average you can expect a profit margin of 8% to 12%. Also, if you join with MRF as a distributor then the profit margin could be around 2% to 5%.
ROI on MRF Tyre Franchise
The return on investment depends on how strongly you are able to make the sale. Remember that the demand for each type of product varies. So, the personnel that you connect with can provide you with such details.
Royalty for a MRF Tyre Franchise
The company authorities will provide you with details like its Royalty. However, the company charges a franchise fee of INR 10 lacs.
FAQ
Q1. Is MRF tyres franchise profitable?
Q2. Is owning a MRF tyres franchise better than JK tyres franchise?
Disclaimer: The information provided in this post is for general informational purposes only and does not constitute professional advice. Please consult a qualified professional before making any decisions based on this content.
