FranchisingFeature automotive
may 2 0 1 7
Automotive Franchising is Back What Does It Take to Become
a successful Auto Industry Franchisee? Midas Franchisee Builds on Stellar Reputation for Service Franchising USA
auto m oti v e franchising fe atur e
what’s new!
Monster Truck Event Calls in Hydraulic Hose Experts at PIRTEK to Keep Show on Schedule PIRTEK, the world’s leading fluid transfer solutions company, recently helped a monster truck event keep on schedule for thousands of fans at the Mercedes-Benz Superdome. A front-end loader had blown a hose while preparing the ground for a New Orleans Monster Jam competition, prompting a call to PIRTEK for some onsite maintenance. A technician from PIRTEK Elmwood in Harahan, LA, immediately headed out to the Superdome to work on the idled equipment. The Caterpillar front-end loader, which prepares the ground into the muddy consistency necessary for the competition, required a hose and fittings to get moving again.
PIRTEK’s Mobile Service Vehicle drove into the Superdome right over the spongy earth that was being prepared for the monster trucks. “The driver wondered if he might get stuck,” said Carl Prince, owner of PIRTEK Elmwood. “But it was OK, he didn’t have a problem.” The technician made it to the venue in 30 minutes. The equipment was up and running in less than an hour. PIRTEK Elmwood was also on standby that weekend to service any other hose issues that might arise. “It was an interesting chain of events,” Prince said. “I’m happy we could help them out.” www.pirtekusa.com
RNR Tire Express & Custom Wheels Launches 3 New Digital Platforms The RNR Tire Express & Custom Wheels (RNR) franchise has added three digital platforms designed to increase lead generation, store traffic and quote assessments for franchise owners. The first new digital platform is called the Resource Center. It provides a one-stop, total-solution for franchise owners to make real-time changes and dynamically tailor local marketing materials, preview options and order the materials directly through the center’s digital provider. A new training platform, called Training University, offers an interactive experience for new franchise owners and new hires to review course information, take quizzes, and access a step-by-step guide outlining the grand opening process aimed at increasing employee engagement and success. The Training University is also equipped with tracking and notification options. The third upgrade to RNR’s digital platforms is a newly designed, highly-interactive customer-facing website. The company says consumers can virtually customize their vehicle’s display at the new website. By choosing the year, make and model, visitors have
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the option to browse through thousands of tires and wheels which are generated through the site’s virtual gallery. In addition, the mobile-friendly platform offers an intuitive option to ‘click-toquote’, which instantly connect customers to a local representative. “RNR is thrilled to unveil our new support platforms in conjunction with our new and improved website – all of which we are extremely proud of,” says Larry Sutton, founder and president of RNR Tire Express & Custom Wheels and owner of SPF Management Co., which offers RNR franchises. “As RNR continues to grow, we continue to be committed to providing the essential guidance, support and innovative resources needed to ensure the success of each franchise location along with making our customer experience even better.” www.RNRfranchise.com.
Color Glo International Announces It’s 7th World-Class Franchise Award Color Glo International, the world leader in restoration and repair of leather, vinyl, velour, cloth and hard plastics, announced today that it has been awarded the “world-class franchise award 2017 for the seventh year in a row by Franchise Research Institute.” Color Glo, a family-operated concept that began in 1975, has been offering turn-key franchise support since 1982 in the reconditioning and repair categories worldwide. Color Glo has taken a different approach to the business of fixing things, by helping new business owners build footholds in their respective markets in more than 50 countries, including the latest addition to Color Glo in Yucca Valley, California.
industry, with turn-key solutions starting at $56,500.
Color Glo recently launched a revised website with a simplistic approach to informing potential franchisees about the opportunity inside of the reconditioning
Color Glo International is the World Leader in restoration and repair of leather, vinyl, velour, cloth and hard plastics commonly found in the markets
of Automotive, Aircraft, Marine and Furniture. Formally incorporated in 1975 Color Glo began franchising in 1982. Today it is in hundreds of markets throughout world. colorglo.com/own-a-franchise
AAMCO Franchise Recognizes LongestTenured Franchisee for 50-Year Anniversary AAMCO, the world’s largest chain of transmission specialists and leader in total car care services, proudly recognizes its longest-tenured franchisee, Bill Harrison, for his remarkable 50-year anniversary with the brand. On March 11, 1967, Harrison signed his first franchise agreement to develop a service center in Columbus, Ohio, and has continued to lead the operations throughout the years, including five national recessions over the past five decades. The franchisee plans to retire on July 1 – 50 years after opening his AAMCO location – and will pass the business down to his stepson, who will continue to operate the Springfield, Ohio location.
Harrison embarked on his entrepreneurial journey with AAMCO at the age of 29 in order to build a thriving future for himself and his family. At the time, AAMCO was carving out its reputation in leading transmission repair service. Over the years, Harrison has grown with the brand as it became a household name, and recognized the vast technological and training advancements made to the business model, such as AAMCO University. The franchisee exemplifies the meaning of superior customer service, and has forged meaningful relationships within his community while serving as a mentor to other franchisees within the AAMCO system. www.aamcofranchises.com
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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
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AUTOMOTIVE franchising There seems to be one type of business everyone knows about and that is the automotive industry. It has a strong stance in American history and had a turning point in the industrial revolution with Henry Ford’s assembly line, amongst many other economic changes.
The automotive industry has been the backdrop of the American economy since it was first developed and it continues to have a lasting impact each day. In fact, US car sales generate 7.1 million a year, while 95 per cent of American households own a car. For those interested in gaining a profit from the All American business, franchising would be the best consideration. Most of the car brand names and operations are available through a franchise option that is well established and organized. The automotive industry works on a very large scale, from parts to production and manufacturing; a franchise allows you to start a business in connection to all of those operations with ease, while also providing high end marketing and advertising. Although these franchises have a high buy in, they nearly always guarantee a profit which is mainly provided by the franchisor’s many supports. Though one of the main focuses of the 2008 US recession was the auto industry, it has made a smooth recovery and has grown with the economy. Consumers now have a different approach to driving and car ownership; though each
household in America has 1.1 cars on average, people are holding onto them a lot longer. In 2015, the average age of registered vehicles in this country was 11.5, a number that has been increasing since the recession. Though people are buying cars, they are waiting a long time in between purchases and all these numbers must be considered when becoming an investor in the industry.
Sales For those of you who have a great passion for vehicles, a car sales franchise is a great opportunity to be a part of an industry that you truly enjoy. A lot of people are car nuts but it’s an expensive interest; a franchise allows a profit while being surrounded by all your favorite toys. Be sure to consider your favorite brand names and dealers, while also considering the support from the franchisor. A lot of car industries have all resources within the country, which could be more convenient but may cost more or maybe getting parts from overseas costs more. All the details about shipping and receiving can likely be answered by a franchisor but a lot of the processes should be considered before an investment.
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People are holding onto cars a lot longer, but people never stop owning cars. However, a sales franchise would be in direct competition with used sales dealerships. You should research your area and territory for used dealerships before investing in a franchise as such.
Someone with a background in car sales would be beneficial but not necessarily, as well as someone with an understanding in business. It would be best to try and discuss your options with other car franchisors to get a personal perspective of your expectations.
Services This field of automotive service hits a broad range of offerings. Since more people are holding onto their cars for a longer time, there are more people seeking services. There are lube franchises, repair services, car washes and collision repair. The list is endless for vehicles- they tend to run into trouble and need a professional’s help. Investing in a service franchise allows an investor to be immediately connected with a well-known brand name. However, when it comes to auto repair, this may not necessarily be beneficial. A lot of communities have a comfort service, a local small business that treats
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them properly and provides cheap, fast and great service. Researching on the ground for completion would be extremely beneficial to those interested in the automotive service franchise. While a franchise would provide consumers with a reliable branding, its small business competition may dampen a success rate that the franchisor had not considered. This would likely only be discovered through word of mouth and talking directly to local consumers and businesses. Of course, someone well versed in automotive repair would benefit a franchise of this sort, but it’s not necessary as the franchisor provides support and training. The service industry has a wide span of choices, outside of simple repair: Car rentals: Though the industry took a hit during the recession, the car rental industry’s revenue has been growing in the last couple of years, with an annual growth
“Since more people are holding onto their cars for a longer time, there are more people seeking services. . . The list is endless for vehicles - they tend to run into trouble and need a professional’s help.”
of 2.7 per cent and a $38 billion revenue in the country. Glass Repair: Some franchises remained focused on one area, including glass repair. Of course, some franchises offer other services besides repair, which a franchisee should consider in their research. They should also look a a services retails sales in the last year. According to Auto Glass Repair and Replacement Franchises Market Research Report in 2017, this industry has been losing business to DIY repairs and auto body shops that offer multiple services. A business of this type would be competition with direct car dealerships and service shops offering plenty of services. However, a glass repair franchise may be worth considering on a small scale. The same report stated the industry brought in $144 million in revenue annually, therefore an investor would have to research whether or not that is beneficial to them. Oil change and lube: Again this field has competed with the do-it-yourself method,
but with people keeping their cars for longer than ever before, they want to trust the professionals to keep them lasting long. This is worth a review for potential franchisees to see if they are interested in a lower scale form of automotive franchising. The automotive industry is wide ranged and is not simply limited to car sales, however those are the heavy hitters in the automotive economy. For a franchisor passionate about cars, it’s a great franchise investment with a lot of return, but also a lot of initial research and networking to ensure the proper decision and direction has been taken. It will take time and money at the initial investment, but the pay back will be worth it.
ABOUT THE AUTHOR: After receiving an English Degree, followed by a Journalism Diploma, Gina Gill 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.
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Derik Beck, VP of Digital Marketing, Cottman Transmission and Total Auto Care
Building a Lasting Relationship with Marketing Partners In the automotive aftermarket, an internal digital marketing team is faced with the challenge of differentiating its company’s services and strengthening the recognition of the larger brand among an ever-growing number of competitors at the same time.
Derik Beck
Franchising USA
Naturally, many in-house teams utilize the marketing services of outside companies to get the job done. I often look to our third-party collaborators for more niche skills such as animation, programming, graphic design, data research and crossplatform advertising specialists. However, there is an art involved in developing a potential outside firm into a full partner to meet and surpass your company’s marketing objectives. With third party marketing and digital colleagues, I’ve found the most meaningful relationships result from aiming to create a partnership, not simply a vendor or supplier contract.
A digital marketing partner is more than a vendor Aftermarket vendors are essential in ensuring a car care or maintenance shop has the tools and supplies necessary to deliver high quality services. But within the marketing efforts for those services, marketing professionals are often seeking a deeper relationship with outside marketing specialists, and those businesses often pride themselves on being more than a vendor to their clients as well. My goal is to find a partner who becomes embedded in the marketing efforts of our business. The skills and services a partner brings to the table are just one part of their larger function on the team. My focus is on the digital side of marketing and we depend on our partners for everything from animation to web design. Our partners supply us with creative skills needed to accomplish our marketing goals, but they also grow to become trusted partners and in some cases, an advisory role to provide unmatched customer service and professional recommendations. The skills a digital marketing partner provides are often only one component of a larger, broader relationship. While many vendors may provide exemplary services or products, if they fall short of a collaborative partnering role within our team, we often end up looking elsewhere for a more meaningful digital relationship.
“Choosing a partner rather than settling for a vendor on creative endeavors is the key to building that relationship into a partnership meant to last.” Picking the right marketing partner So your marketing team wants a partner, not a vendor—how do you achieve that distinction? First, examine your internal corporate culture and the makeup and values of your team. Establishing a true marketing partnership with a third party requires compatibility and clarity of roles and responsibilities. We seek out partners who offer strategy and vision that complement our larger business goals. Our most recent marketing success was the result of a variety of successful marketing partnerships rooted in our partners’ understanding of our core marketing goals. When we search for marketing partners, we start with a thorough walk-through of the outside firm’s process and commitment to our brand. We meet the team, we talk through eventualities such as what happens in the case of a shift of internal needs or deadlines, and we determine that this is a partnership we can rely on through the long and sometimes rocky road of bringing a marketing concept to final launch. A potential partner can win us over by being clear and upfront about their brand, their abilities and their bandwidth for focusing on our marketing needs. An initial indication that a relationship has the potential to grow into something more gives a prospective marketing specialist an edge over the competition.
concern is that the services we pay a creative partner for are exceptional and delivered on deadline. But in addition, I’m looking for a partner who has a sixth sense for the broader business, and prioritizes our needs and requests. As those foundational elements grow, I often find myself turning to these partners for their thoughts and opinions on narrative strategy and leaning on their digital expertise. No one knows it all, and over time, I appreciate a partner who demonstrates an innate understanding of the aftermarket industry, but especially of our niche and the larger direction of our marketing and growth goals. If a partner fails to show long-term added value in our holistic marketing process, I come to think of them as a vendor once more, rather than a partner, and I will likely begin looking for other creative companies to fill the role of a true collaborative partner. In the aftermarket industry, effective marketing often lives or dies on establishing a winning team, both in-house and with outside companies. Choosing a partner rather than settling for a vendor on creative endeavors is the key to building that relationship into a partnership meant to last.
Clarity in expectations is the best way to begin any relationship with an outside company, and consistency in that communication can help it blossom.
Derik oversees all digital aspects for Cottman Transmission and Total Auto Care including SEM, SEO, social media, local franchise websites, and the national brand website. His responsibilities include public relations efforts for the Cottman brand, budget P&L, individual center/location based marketing efforts, with a focus on increasing profitability of sales for each, as well as assist in franchise development efforts. The brand operates locations across the United States and Canada.
From a marketing perspective, our first
cottman.com
How to grow a marketing partnership
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Midas
Midas Franchisee Builds on Stellar Reputation for Service Ever visit one of those neighborhoods where young urban professionals are moving in, renovating handsome old buildings and revitalizing the community?
• By training and developing his team;
Brian Beers’ stewardship of his multiple Philadelphia-area Midas shops is a little like that. In the past six years, he has built on the stellar reputation for service forged over the past 31 years by his father, Tracy Beers, and his uncle, Herb Hollinger, by expanding their service menu and delivering what today’s time-pressed customers want: total car care from an auto-service brand they trust.
“We try not to pressure customers”, said Beers. “We approach it in terms of ‘this is what your car is telling me, based on our inspection.’ Our managers provide the total picture – what the customers need now, what they’ll need in the future and what won’t need service for a year or more. You build a lot of trust when you tell somebody that they don’t need something.”
• By paying for results; • By communicating with his employees and conveying a vision for the business; • By putting his faith in a service category that he feels is Midas’ future: tires; And most important: • By executing a very effective, 10 Absolutes-based “Acquire, Convert, and Retain” strategy.
• By being a hands on owner
Today, Beers runs a sales– and service– focused organization staffed by a highenergy team that is committed to doing a great job for customers, and, in doing so, driving increased income for themselves. Ongoing in-house team training is a priority for the franchisee, who in recent years transitioned to an operating-profit based plan whereby managers who run very profitable stores can make very good money.
• By hiring energetic, upbeat, ambitious employees;
A graduate of the University of Miami, where he majored in business with an
Since he took the helm in 2009, sales at Brian’s stores have risen steadily. Buoyed by this success, he has in recent years opened two new locations, expanding the family’s retail footprint to eight Midas carcare outlets. So how has Brian maximized his Midas opportunity?
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entrepreneurship focus, Brian has been around Midas as long as he can remember. “This business has supported our family my whole life. So when I graduated, I thought it would be an opportunity to take the ideas I learned in college and apply them to the business,” said Beers who minored in computer technology and ran a software development company for iPhone applications and database-driven websites while in school. Beers also picks up on business best practices through his friendships with other Midas franchisees. “It’s important to talk with other experienced dealers; otherwise you might just as well be an independent“, said Beers. “There is a lot of money to be made in car care, even in today’s competitive market, provided you stay involved,” said Beers. “The programs introduced by Midas are creating opportunities. I like the advertising – it’s fresh simple and it’s driving cars. I came out of business school with a plan and a vision”, he concluded. “We have great advertising, a strong brand and something that we are competitive in -- tires. So yes, I’m excited, I’m feeling good about the business, and I think everyone should give these programs a shot and make the best of this opportunity.” www.midasfranchise.com
Builds eputation ““There is a lot of money to be made in car care, even in today’s competitive market, provided you stay involved.” - Brian Beers
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Christopher Conner, President, Franchise Marketing Systems
Automotive Franchising
The automotive market within franchising is considering one of the original segments which in a sense brought legitimacy to the franchise model and shed light on the franchise distribution channel’s effectiveness.
ago and those who hold the franchise rights are in some way compared to NFL Franchise owners who are border-line royalty, the rest of the automotive market that provides services and products to the industry category has returned to growth.
It started with dealerships selling products and vehicles and transitioned into all automotive services, aftermarket vehicle products and a wide range of ancillary automotive services which turned to franchising for growth. While franchised automotive dealership sales like Ford or BMW seem to have levelled off decades
The automotive franchise market went through it’s crazy growth time period in the 1970’s and 1980’s when brands like Jiffy Lube, Meineke, Midas, Merlin and Tuffy all hit significant growth benchmarks and became national and international brands. The automotive repair market was hot and the franchise
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Franchising has a way of being a good indicator of what is happening at the consumer level and the fact is that we are driving a lot. This means that we have lots of cars per home in the U.S. (average 2 cars per household) and need lots of services to support those vehicles.
business was a key component to the expansion of the industry segment. In the 1990’s, the automotive segment in franchising had slowed and seemed to be less innovative or willing to adapt to modern business practices. These preeminent brands like Jiffy Lube leveled off and over the past decade or so haven’t changed their total unit count for some time now. In the 2000’s, the market seemed to hit a turning point and began to see signs of life again. The transition was evident across the board, many “stale brands” reinvented themselves, invested in branding, look and overall presentation to the customer in order to reinvigorate their relevance. Part of this return to growth has been due to the automotive market’s willingness to go mobile and bring the services to the customer. Whether it is oil changes, brake repair, glass fixes or upholstery repair
utomotive ranchising is Back
Chris Conner
“The next wave of automotive franchise growth just might have something to do with the electric vehicle transition.” times and that overall perception was absolutely an aspect of why the market slowed in growth and franchise investment diminished.
services, many of these market segments have gone mobile and bring the service model directly to the customer. Brands that represent this trend include The Brake Squad, The Restorer or Colors on Parade. These brands have created market positions using the mobile aspect as their differentiator, which has allowed them to scale. The automotive services market has generally been a good business with a bad reputation. Customers expect to be taken advantage of, bullied or plain lied to in a typical transaction. Today’s consumer is better educated, empowered and generally refuses to accept poor customer experiences. Millennials might be the prototype example of this scenario and present a new set of challenges for any business who has not evolved to meet the expectations of today’s consumer. The automotive market was just behind the
The automotive market has worked diligently to change this perception and the brands that have been able to expand have answered the consumer’s demand for professional and fair treatment. Christian Brothers Automotive is a perfect example of this particular trend. The organization is by it’s namesake based on Christian principals and a strong moral foundation which in turn makes the customer feel comfortable that people are doing the right thing and looking out for the best interests of the customer. Other brands like Jiffy Lube have softened their brand and overall image along with updated customer interaction policies to help make the experience better and more repeatable with today’s customer. Ultimately, the automotive services market can be a great franchise business. The numbers don’t lie. Jiffy Lube average store sales 1,928; Average Annual Sales per Unit: $714,558 on an initial investment of $200k - $400k and the mobile automotive franchises offer an even greater potential ROI with brands like The Brake Squad with an initial investment range of $30k
- $70k and average unit volume of $270k. Services generally offer higher margins and are repeatable for vehicle service work as the one consistent in cars is that they will keep needing to be fixed. With the right business model and a customerfocused approach to providing services, the automotive segment of franchising looks to be a strong market for the foreseeable future. The next wave of automotive franchise growth just might have something to do with the electric vehicle transition. With Tesla and all major manufacturers scurrying to mass produce electric cars, the need for services and products for this category will come quickly. Christopher Conner is the President of Franchise Marketing Systems and has spent the last decade in the franchise industry working with several hundred different franchise systems in management, franchise sales and franchise development work. His experience ranges across all fields of franchise expertise with a focus in franchise marketing and franchise sales but includes work in franchise strategic planning, franchise research and franchise operations consulting. www.franchisemarketingsystems.com
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Rick Bisio, A Franchise Coach
What Does It Take to Become
a Successful Auto Industry Franchisee? As a franchise coach, I work with a lot of different people trying to enter a lot of different industries within the franchise sector.
Rick Bisio
Franchising USA
Many people gravitate towards the industries they think they know a little something about, thinking that is where they will be more successful as a business owner. But the beauty of franchising is you don’t have to be an insider to successfully run a business in that industry. Unlike starting you own business from the
ground up, franchising provides a proven business model and corporate assistance to franchisees — tools designed to help franchisees on their path to success. In franchising, anyone who wants to become a business owner can, with or without a deep knowledge of the industry. That being said, it is important to understand the industry you are interested in entering. The most dedicated franchisees may not have started out knowing much about their industry of choice, but they make a point to learn as much as they can through their due diligence as a business owner... and the automotive industry is no different.
The Current State of the Auto Franchising Industry
“Most franchises are structured in similar ways, no matter what industry they are in. What matters is that the franchise you choose is the right fit for you.” As a prospective franchisee, you want to enter an industry that is stable or growing, not waning. It’s just good business sense. For the time being, the automotive industry is incredibly stable — most people still drive cars and those cars will continue to need regular maintenance and repairs. • What does it cost to enter the automotive franchising industry? When investigating your franchise industry of choice, it’s important to know what your options are in terms of the type of franchise you can own and the costs required to become a franchisee in that industry. At the low end, the cost of buying a franchise in the automotive industry can range from $75,000 to $100,000. However, some investments might reach as much as $500,000, depending on the franchise you choose. Knowing about the industry you are entering is important, but more important is determining whether or not it is a good fit for you.
Do You Have What It Takes? When looking into any franchising industry, it’s important to do your due diligence and understand what kind of market you are entering. And when looking into the automotive industry, there are a few things to pay attention to: • Is the industry well established? Much like the food sector, the automotive industry has been around for a long time. It is well established, with few new players entering the fold. The industry is large, stable and predictable, which is good news for someone looking to buy an automotive franchise. • Is the industry growing?
So, what’s different about franchisees in the automotive industry? The answer is, in fact, not much. If you are interested in becoming a business owner, certain skills will always be helpful, no matter the industry. • General Business Management Are you skilled in customer service, management of blue-collar employees, financial management and people management? Then you might have what it takes to run a franchise in the automotive industry. • Thorough Research Are you willing to do the due diligence before finding the perfect franchise for
your needs? As with any industry, the automotive industry encompasses a large variety of options in franchising. From small to large storefronts, low to high startup costs, and even varying types and styles of businesses, there is much to research before making your final investment decision. • Confidence Are you comfortable with the industry and where it is going? There are good and bad opportunities in any industry. The key here is to be sure you are investing in a good one. If you’ve done your research and feel confident that entering the automotive industry will be a successful business decision, and that the automotive franchise you have chosen is based on a business model that will bring you success, you are on the right track. Most franchises are structured in similar ways, no matter what industry they are in. What matters is that the franchise you choose is the right fit for you. If you think you have what it takes to become a business owner, but don’t know what franchise is best for you, take a look at my best selling book, “The Educated Franchisee,” to guide you through the franchise buying process. The automotive industry might be a great choice for franchising, or not — it all depends on you. Rick Bisio is the Amazon-bestselling author of The Educated Franchisee, a leading franchise coach with FranChoice, the co-host of Rick Bisio’s Franchise Focus, and the creator of the FDD Exchange and the Franchise Glossary. Since becoming a franchise coach in 2002, Bisio has assisted thousands of aspiring entrepreneurs nationwide explore the dream of business ownership. Prior to joining FranChoice, he was the director of international development at AFC Enterprises, the parent company of Popeye’s Chicken, Church’s Chicken, Seattle’s Best Coffee and Cinnabon, establishing locations in more than 30 countries www.afranchisecoach.com
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