Automotive Franchising Supplement May 2015

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FranchisingFeature aut omotive

M AY 2 0 1 5

REDRHINO:

The Epoxy Flooring Company the fuel behind the

automotive aftermarket seeing the opportunity

in indispensable services Franchising USA

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C over S tor y - r edr h i n o : T h e Epox y Floo r i ng Co m a n y

REDRHINO:

the epoxy flooring company

one of the best franchise programs in the country REDRHINO: The Epoxy Flooring Company provides protective and aesthetic flooring solutions to a number of industries.

One industry that we spend a great deal of time with is the automotive services industry. The organization’s portfolio includes McLaren of Beverly Hills, Porsche & Audi of Woodland Hills, Rolls Royce of Thousand Oaks, Mercedes Benz of Laguna Nigel as well as Toyota of Redlands and Firestone Tires. Over the years, automotive services have come to represent approximately 43% of REDRHINO’s gross revenue. The good news for our franchise partners is that we have this experience and are able to pass years of knowledge to our regional offices. We understand possible client objections and

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the challenges inherent to these jobs. Due to this understanding, from customers and salespeople to service technicians to miscellaneous quality assurance requirements, our franchise partners are able to provide a win-win epoxy solution for all participants in this incredible industry.

Automotive dealerships, auto body shops, or even automotive auction houses, such as Manheim Auto Auctions, have their own set of customers and much of their sales success depends on a positive and flawless customer experience. As automotive sales people carry themselves with a professional demeanor, the immaculate inventory, service garage and showroom must be state of the art.

REDRHINO provides its clients with floors that are durable, provide a high ease of maintenance and, of course, they look good. This level of quality ensures that no detail goes unnoticed, even the floors.

REDRHINO understands that our client’s

customer experience is important, and our floors reflect that.

Salesmen are able to confidently walk their clients through the showroom, and the service area, knowing that their attention will be on the car they want to purchase, not the poorly maintained condition of the floor. Even the newest and most popular vehicles in the showroom will deposit small amounts of motor-oil, meaning it won’t be long before a showroom shows traces of motor-oil, tire marks or other miscellaneous debris on the floor. These stains are a huge distraction for customers and can detract from the sales experience.

An epoxy floor will prevent motor-oil stain problems before they start. The product fills up the porous surface of dealership floors and helps the concrete to maintain a clean appearance. Top epoxy companies like REDRHINO even offer quartz-vinyl chip flooring, color quartz or metallic flooring options that are excellent for automotive showrooms. Though true for a number

“When upgrading a service garage with REDRHINO’s epoxy coatings, service bay workers enjoy a more attractive, safer and brighter working environment.”

of industries, it is especially true in this industry that the quality of a floor can influence the perceived quality of the product being sold.

Another aspect of the automotive industry that is often overlooked is the service garage and the technicians. More often than not, attractive and stain-free floors will help make service garages safer and improve the effectiveness of the workspace. Since epoxy and urethane floors are exceptionally easy to clean and, thanks to their slip-free properties, the service technicians don’t have to spend their time dodging miscellaneous oil spills. When upgrading a service garage with REDRHINO’s epoxy coatings, service bay workers enjoy a more attractive, safer and brighter working environment.

Nowhere in the continental United States is there a shortage of automotive services opportunities. As we like to say from a sales perspective, it is low hanging fruit.

Today REDRHINO: The Epoxy Flooring Company is recognized as one of the industry’s “go-to” providers of protective coatings for commercial and industrial applications. We are continuing to build our industry footprint with the opening of

installation offices in: 1. Los Angeles, California 2. San Diego, California 3. San Francisco, California 4. Sacramento, California 5. Seattle, Washington 6. Phoenix, Arizona 7. Tucson, Arizona 8. Las Vegas, Nevada 9. Louisville, Kentucky 10. Omaha, Nebraska 11. Pittsburgh, Pennsylvania 12. Philadelphia, Pennsylvania 13. Chicago, Illinois 14. Washington, DC 15. Virginia 16. Dallas, Texas 17. Denver, Colorado 18. Charlotte, North Carolina 19. Raleigh, North Carolina 20. Atlanta, Georgia 21. NYC & Surrounding Boroughs

REDRHINO has one of the best franchise programs in the country. We provide complete training sessions, at our corporate office in Los Angeles, and teach our partners the ins and outs of epoxy.

This includes installation process, sales tactics and total understanding of our marketing program. Here at REDRHINO, we keep close contact with our franchisees, and provide constant support from our corporate associates. Our regional partners are given all the necessary tools to run a thriving business.

The manufacture and installation of our own products sets REDRHINO apart. We are one of the only full-service, or turn-key, installers in the industry. This means that from the sale to the installation, REDRHINO is there every step of the way. Our high quality service combined with brand recognition and a successful marketing program makes REDRHINO an exciting and growing business.

Call today for information regarding REDRHINO: The Epoxy Flooring Company. www.redrhinoflooring.com Michael D. Kenealy | CEO | REDRHINO 1 (310) 435-4153

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Featu re

b y G i n a G i l l Fr a n c h i s i n g U S A

automotive franchising

e r u t Fea Car ownership has become an essential part of life in America.

With fully developed towns, transportation is needed to strive and survive in this country.

In fact, the U.S. is home to the largest passenger vehicle market in the world.

According to the Department of Transportation, there were 254 million registered passenger vehicles in the country in 2007. The number of vehicles has continued to rise since the 1960s, with the exception of the recession, which was the only time the sales decreased since the introduction of vehicles into the everyday lives of American families.

Automotive franchises are available from coast to coast and widespread throughout the country, offering locations in a variety of fields almost anywhere.

To gain understanding on the business of automotive industry, consider the life cycle of a car, which includes pre-sale and manufacturing, initial sale of the vehicle before it begins running and then the after sale, which provides several businesses for upkeep.

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Automotive franchise An automotive franchise would guarantee a continuous increase in demand as time goes by and a product that has become a staple within the average household.

It’s inevitable that people will need transportation and consumers would prefer to be behind the wheel and in control of their own destination.

This concept is tempting for new franchise owners because it establishes a brand, an in-demand product and well recognized business model. Though the industry took a public hit during the recession, sales have since increased.

In 2009, during the economic crisis, car sales experienced its largest decline in sales in 27 years. That being said, Americans still purchased 10 million units that year. In 2014, there were 16.5 million units sold, though there has been an increase, it’s a slow incline to how quickly the market used to grow before the crisis.

Manufacturing People need more: more choices, more colors, more options- the consumer expects to get what they want and they know the industry allows them to browse the market from the comfort of the own home on the screen of a laptop. Therefore, manufacturing has become more evolved, more elaborate focusing on the many needs of Americans. In 2003, the U.S. was the largest producer of vehicles in the

“It’s inevitable that people will need transportation and consumers would prefer to be behind the wheel and in control of their own destination.”

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Featu re

b y G i n a G i l l Fr a n c h i s i n g U S A

“Manufacturers are also exporting vehicles out of country, creating even more opportunity for profit.

As a retail industry, technology has increased opportunity for sales and a lot of customers can purchase and browse even ore from online, helping reach a broader fan base.

Providers offer replacement parts, performance parts, maintenance parts and other accessories and usually offer services and repairs as well.

world, followed by Japan and Germany.

Manufacturing cars is a part of its economic history, everyone remembers Henry’s Ford famous assembly line on the cusp of the industrial revolution.

Therefore, becoming a franchisee within this field is partnered with a deep sense of patriotism, as well as knowing you’re creating jobs for people within the community. Motor vehicles and part manufacturers directly employed 786, 000 people at the end of 2012 with 13 auto manufacturers.

There are numerous options for franchisees, including foreign manufacturers that are now established in the States.

Manufacturers are also exporting vehicles out of country, creating even more opportunity for profit. In fact, in 2012, approximately 2.6 million vehicles were exported to more than 200 countries.

Manufacturers are also at the forefront of new innovations and products, making for a continuously evolving field of business.

Automotive parts What is a car without all of its parts? A machine needs everything in working order to function properly and because people are dependent on their vehicles, they will easily purchase parts, which creates an automatic consumer base.

There are numerous parts suppliers in the

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industry and account for nearly 4 per cent of U.S. manufacturing and account for more jobs than any other manufacturing area.

With Americans owning cars for an average of ten years, they need to keep their vehicles functioning and rely on parts to easily update their cars to working order.

Again, this field is usually well established with recognized brands that easily support owners in marketing. Though this area slowed down during the economic turmoil, it has been reestablishing itself and slowly increasing. With more cars on the road, there is more opportunity for more parts.

Parts are not only sold to consumers but other businesses and on an international level. According to the Department of Commerce 2001 industry annual assessment, U.S. automotive parts exports increased 36.2 percent to $58 billion in 2010 from the previous year. Which was impressive, considering the industry was just recovering from a recession.

Providers offer replacement parts, performance parts, maintenance parts and other accessories and usually offer services and repairs as well.

People rely on professionals to maintain their vehicles because it’s an expensive investment that they do not want to see wasted, therefore they look to franchises as a reliable service industry. Compared

to independent owners, franchises have a solid reputation and customers feel confident leaving vehicles in their hands.

Due to technical advancements, people are less likely to service their cars themselves compared to the past because it necessitates specialized knowledge and talent.

“Providers offer replacement parts, performance parts, maintenance parts and other accessories and usually offer services and repairs as well.”

Effects from the recession The most highlighted trade affected by the economic turmoil of this decade was the automotive industry.

One of the most significant effects is the increase in length of car ownership, which in turn has changed how to industry functions overall today. People are willing to pay more for services and products to ensure the life of their vehicle is lengthened, and that change in attitude affected the pricing and type of vehicles sold. There is a higher standard than before and a concern for longevity.

Though car sales were truly hit during the recession, it’s still an industry that has a large affect on the American economy.

Dealerships changed their strategy and products to adhere to the new demands of the consumers.

This field has proven that it will always remain a staple in the American economy,

even when it falters, it will always be in demand. It’s an ever growing field that can adapt to a variety of requests that is continuously advancing and changing.

About the author: After receiving an English Degree, followed by a Journalism Diploma, Gina became a freelance journalist in 2008.

She has worked as a reporter and in communications, focusing on social media.

She currently works as a community information officer with Epilepsy Society, while pursuing her writing career at the same time.

Look out for our next special feature:

Sports & Fitness Franchising Franchising USA

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David Schafers, Senior Vice President of Franchise Development, Driven Brands, Inc.

The Fuel behind the

When most think of the auto industry, the first thought that comes to mind is driving a shiny new car out of the dealership. Drivers carefully examine their budget in order to make a thoughtful purchase that will cover down payments, insurance, registry etc. If you’re that person, you’re not alone.

New car sales in the U.S. are expected to hit 17 million this year, which is up from 10 million just five years ago.

However, the latest vehicle trends show that what is really driving the industry forward is the automotive aftermarket.

The manufacturing, remanufacturing, distribution, retailing and installation of vehicle parts after the initial sale have grown steadily for the last 20 years. In

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Automotive Aftermarket

fact, with the automotive aftermarket projected to top more than $722 billion worldwide by 2020, there appear to be no brake lights ahead in this segment. Every driver in need of a vehicle part, accessory, equipment and chemical adds up to more growth, and there’s never been a better time to examine what is fueling this booming industry.

Causes of the Growth The fluctuating economy has had many effects on the auto industry, but it’s most notable influence is that drivers are holding on to their cars longer. The

average age of vehicles on the road stands at a record high 11.4 years and is expected to continually creep up to 11.7 years by 2019. Compare that with the average age of just 8.2 years in 2000.

In the long term, drivers are taking better care of their investments, and any investment needs maintenance. Drivers know that with everyday wear and tear it’s just a matter of time. The automotive aftermarket is continuously refilled with aging cars in demand of a fix-up. As the U.S. economy slowly recovers, car owners are cautious about where they are taking their cars to be serviced. Alternative car

“Drivers hate having to fill up at the gas station, but with the average price per gallon lower than recent years, drivers are less hesitant to put miles on their car.”

“The fluctuating economy has had many effects on the auto industry, but it’s most notable influence is that drivers are holding on to their cars longer.” care companies, such as Meineke, are seeing a boost in customers looking for a great value.

Drivers hate having to fill up at the gas station, but with the average price per gallon lower than recent years, drivers are less hesitant to put miles on their car. Last year, prices at the pump were averaging a staggering $3.65 a gallon; this year it’s down to about $2.40. The decrease has a significant impact on driving habits.

Lower prices at the pump lead drivers to stay on the roads longer and choosing their personal vehicle rather than public transportation.

The added miles, while cheaper on the tank, are costly on the rest of the vehicle, especially with the recent harsh weather conditions in many regions in the country have recently experienced.

The abundance of snow and freezing temperatures do a number on roads and vehicles. General non-warranty automotive repairs and maintenance cost consumers $1.6 billion in 2014. Between fluid refills, tire replacements, shocks, struts and suspension work due to potholes and collision repairs from icy conditions, projections for the auto care industry this year are expected to grow even further.

systems and putting their foot on the gas with incentive programs. Meineke has developed several financing and incentive programs for new and existing franchisees to boost unit growth. Recently partnering with BoeFly and offering multi-unit incentive programs, the industry-leading franchise is now able to provide faster start-up periods and better financing options for qualified franchise partners.

Consumers are also benefiting from the industry growth as competition heats up between auto care providers. For starters, Meineke is revolutionizing the customer experience by applying technology for better understanding. Too many people associate the auto shop experience with encountering a mechanic who hands them an oil covered post-inspection report with

David Schafers

scribbled hand-written notes. This year, the franchise is launching an initiative that will integrate the use of iPads with videos to help customers better understand what mechanics see under their hood.

Video demonstrations visually explain any ailments found during a check-up, and instead of a jotting the rest down on a carbon copy, mechanics will be able to provide an electronic version of their notes to customers. The days of customers feeling like auto shops are cheating them will soon be over. www.meinekefranchise.com

Moving into spring as consumers thaw from the winter season, auto repair shops are seeing increased oil change requests increase as well as routine maintenance needs as customers prepare for road trip season.

Effects of the Growth Auto franchises are taking notice of the encouraging growth within their

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George Knauf, Senior Franchise Business Advisor, FranChoice

George, what’s the next big thing?

SEEING THE OPPORTUNITY IN INDISPENSABLE SERVICES will find those businesses in some pretty predictable categories, here are some examples: • Automotive • Home Improvement, home repair and construction • Disaster recovery and insurance services • Business services George Knauf

I get that phone call a couple times a day, and there are certainly exciting, growing brands that we have a lot of fun looking at alongside our candidates. But, as a business owner myself, I like businesses that are predictable and where the segment has a history that could help us identify important trends.

Have you ever looked at how Warren Buffet invests? He tends towards proven stable core businesses, not the latest fad. He looks for those businesses that customers can’t do without.

As you look at your community you

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• Health services These categories will not often sound as hot and exciting as a new restaurant or fitness brand, but look a little deeper and they could be even more interesting than the brand with all the sizzle.

That first category, automotive, is an interesting place to consider capturing revenue in.

When a consumer or business has a vehicle that won’t run, they have to get it fixed. If they have an accident, they will be at a body shop to get a quote. As you go through the next day, get a rough count of the cars in your neighborhood. Look at how many end up in the parking lots at your work or the places you shop. Cars are required for most of us to get to work and make money, as well as to take care of the normal errands we run every day. When a

consumers car breaks down that is not an optional expense, the loss of transportation will cost them time, money and quality of life. For a business, the loss of use of a vehicle can often cost far more than the repair.

The automotive repair space has two large categories, mechanical repair and body repair. While they both focus on vehicles, the business models are slightly different.

Mechanical repair shops often benefit from the relationship building owner behind the counter reassuring customers that their car will be back to them soon in top condition as he builds a long standing return customer. Auto body shops often benefit from a more executive type owner and great systems, that owner will often be very active in their community so they can be front of mind and win that less frequent business and fleet contracts.

Vehicles also require routine service to stay operational, they have parts that have a limited lifespan (oil, brakes, tires, belts, etc). In this category you would find businesses like the oil change brands.

In recent years two groups have been competing hard to with more of this business, the full line repair shops I spoke about above as well as auto dealerships. If you look in this space gather a lot of data

“Core indispensable services can be a great way to build a sustainable revenue stream as well as an asset you can sell down the road.”

“From car electronics to body upgrades there are a myriad of options to help consumers create a car that is unique to them and fits their vision.” to run your numbers and look closely at all competition in your market.

There are companies that customize vehicles to the desires of the consumer, wrap graphics around company vehicles and others that do all those fiddly repairs and upgrades that car dealers need to make the cars on the lot more attractive to buyers.

From car electronics to body upgrades there are a myriad of options to help consumers create a car that is unique to them and fits their vision. In this space keep in mind that these businesses may follow economic trends and be expenses people cut back on if they feel financially conservative.

The exception to that are all of the services that may be offered to car dealers, these will follow car sale trends more than they will just economic trends: Paint touch up, interior repair, customizing, wheel repair and refinish, detailing and a range of other small mobile services. These businesses can make a cumulative difference of thousands of dollars in final sales price on a used or even a new vehicle.

disaster recovery services for interior and exterior events, heating and air conditioning on the broader end of the spectrum to specialized services like mobility solutions, window treatments, flooring and garage customizing.

With brands focused on health services you will find concepts like home care services, senior residence placement, the mobility companies mentioned above, medical testing and medical staffing.

In business services common categories include Staffing, technology, marketing, printing, insurance services, interior cleaning, power washing, window cleaning, inventory and many more.

The moral of the story is that each major market that you may want to dive into may offer a number of ways that you could approach building your business. Take your time, determine all the different approaches available and compare your model (how you want to work and the skills you bring) to the different options available.

Core indispensable services can be a great

way to build a sustainable revenue stream as well as an asset you can sell down the road. When you tell your neighbor what

you do, they may not think it is the hottest new concept, but you may prefer a proven performer to a new fad.

Back to that automotive space, cars have been part of our culture and needed

service since the late 1800’s and became a pretty big business when Henry Ford

showed up with mass produced cars. The types of core services required have not

changed much, only the complexity. Is it

your turn to jump on a proven trend that is over 100 years old?

Mr. Knauf is a highly sought after, trusted advisor to many companies; Public, Independent and Franchised, of all sizes and in many markets. His 20 plus years of experience in both startup and mature business operations makes him uniquely qualified to advise individuals that have dreamed of going into business for themselves in order to gain more control, independence, time flexibility and to be able to earn in proportion to their real contribution.

Contact the Franchising USA Expert George’s Hotline 703-424-2980 www.FranGuide.com

And all of that is not even getting into car washes, vehicle wraps and the countless other services that consumers and businesses demand.

When you look closely at the automotive space you see a number of ways to plug into core services, most of which are necessary regardless of what the stock market is doing.

The models will vary pretty considerably, but there many different types of owners could find a home here.

As you consider other core service categories, you will see comparable pools of opportunity.

In construction related brands there are a number of ways to grow a business in that space from home improvement,

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