Become A Dealer - Honda Powersports

Frequently Asked Questions

What qualities does Honda look for in people who want to become a Honda dealer?

People ultimately set themselves apart by demonstrating the best combination of market knowledge, experience, skill and financial backing. American Honda evaluates this information to determine who will be the best representative in the market place.

Does American Honda charge a franchise fee?

Honda dealerships are independently owned and operated businesses and are not franchises, therefore, no franchise fee is charged.

Does Honda offer financing to help me get started?

American Honda does not offer financial assistance to establish the new business. Applicants may, however, inquire about financial assistance from American Honda Finance Corporation (AHFC)* once an application has been made with American Honda Motor Co., Inc.

*AHFC is an independent company from American Honda Motor Co., Inc.

Does Honda provide inventory assistance to start up dealers?

No, dealerships are required to provide a line of credit from a financial institution for each product line represented in order to pay for new Honda Powersports Products. This credit line is known as a "floor plan" line of credit.

How many units can I expect to sell?

Unit sales projections and dealership profitability are dependant upon many factors including, but not limited to, the dealer's management abilities, type and location of facilities, local economic conditions and resourcefulness of the dealer. Therefore, American Honda makes no representation concerning your sales or profit potential.

Can I select only one or two product lines (Motorcycle, ATV, PWC, MUV or Scooter)?

Presently, opportunities exist to represent only the full line of Honda Motorcycles, All Terrain Vehicles (ATV), Scooters and Personal Watercraft (PWC). Multi-purpose Utility Vehicles (MUV) are offered in selected markets and are not available for all new business opportunities at this time.

How much does it cost to become a Honda dealer?

Sufficient capital is critical for new dealerships. Although there are no franchise fees, as an independent businessperson, you are responsible for providing adequate capital to meet the needs of the proposed dealership.

In addition to typical business start-up costs, American Honda requires the dealership to purchase parts, accessories, tools, manuals, signage, and communication software. This is in addition to the initial cash outlay over the basic costs of funding a new operation.

As a dealership owner you are responsible for an adequate inventory of new units and most dealers will augment their operations with an additional capital investment for used unit inventories, merchandising fixtures, and a computer-based management system. The necessary flooring plan credit limit could exceed $1million, depending upon sales volume.

Recognizing that many lending institutions use a debt-to-equity ratio of approximately 3:1, a $1,200,000 line of credit could require a candidate to invest $400,000 in equity. This means $400,000 owned by the candidate, not borrowed from a source such as the Small Business Administration. Since additional equity is required for investment in floor plan, parts and accessories, signage, computers, facility, etc., hundreds of thousands of dollars is required to properly capitalize a new dealership operation. This is in addition to the floor plan line of credit mentioned above. Your level of investment will depend on your plan.

Can I sell other brands besides Honda? Can I sell other products (sports equipment, golf cars, boats, etc.)?

No. American Honda requires all new dealers to be exclusively Honda. This means that all of your business resources are dedicated entirely to the sales, service, and support of Honda products. This dedication enables an unsurpassed level of service to Honda customers.

Does the owner have to be involved in the day-to-day operations of the dealership?

The majority owner must commit, or be represented full time, in the day-to-day on-site management of the dealership. The success of a new dealership depends greatly on the direct focus and attention of the owner(s).

What help does Honda provide a new dealer?

In addition to assisting people through the application process, American Honda provides industry leading dealer sales and service support. This includes various training programs as well as District Sales and Service Managers.

Does Honda have a specific facility location picked out?

Although American Honda ultimately approves the dealership facility and location, the research to find the best location is the responsibility of the dealer applicant. Your knowledge and understanding of the local market will be a tremendous asset in determining where your dealership should be located.

What are the requirements for the facility size?

Facility size should be proportional to the number of retail sales you project for the new dealership. In addition, the facility should be large enough to stock and display the comprehensive line of Honda products, parts, and accessories, and provide a showcase for your sales and service operations. Future growth and expansion should also be taken into consideration when planning facility design.

Dealers must be prepared to fully represent Honda at start-up. This also includes adequate capital, proper management and the ability to satisfy the existing market opportunity.