Franchised versus Independent. In the last two editions of GEARS we com- pared and contrasted these two business models. We showed that successful shops, whether franchised or not, will only excel if there are two foundational elements in place:
1. Development and manage- ment of the business model 2. Technical competence
We also showed that independent
shops usually start with aspirations of a talented transmission tech. Franchised shops usually start with a businessper- son buying a business model. The businessperson soon learns that
he can’t be completely ignorant about transmissions if he’s going to direct his new business, which is immersed in technology. Similarly, the transmission tech quickly learns that fixing transmis- sions is easy compared to the new task of running a business.
Is it Either/Or, or Both/And?
This article offers an idea I’ve been
thinking about for years. You’ve heard the expression, “it’s not one or the other, it’s both and.” I’d like to advance a proposal that would be a third way to initiate and develop a successful trans- mission (or powertrain) repair shop. The issue here is that there are
decidedly good characteristics inherent in both franchised and non-franchised shops. So how could the best of each be employed in the development of a high class, profitable business?
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What are the major strengths of the
independent concept? 1. Reputation based on technical talent; the owner is a respected professional in the community. 2. The owner chooses target market and range of products and services. 3. Profits accrue only to the owner. 4. The owner can sell business to anyone he chooses. 5. Freedom to change or develop the business without permission.
What’s in a Name? Everything!
The national big name of a major
franchisor brings immediate business to the door of a new franchisee. But it comes with a price tag. The franchisee has a silent partner who takes fees (often 7-8% of sales), whether the shop is making money… or not. As the new franchisee develops his business, the silent partner takes more
Bridging the Great Divide
T
he transmission repair busi- ness has historically been divided between two camps:
What are the major strengths of the
franchised concept? 1. National name recognition means immediate customer contact upon opening a new shop. 2. Established business model with initial and ongoing coun- sel from a visiting operations representative. 3. Effective sales training. 4. Intercenter warranties. 5. Pooled, professional media advertising.
by Paul Mathewson
members.atra.com www.atra.com
and more but is needed less and less. The silent partner is often hard to find because he doesn’t need to visit a busi- ness that’s doing well on its own. What big name can an aspiring
independent shop select to instill con- sumer confidence from day one? Here’s how many general repair shops are doing it: The trade name NAPA now appears on high quality general repair shops everywhere in North America. NAPA is a big name. The NAPA
Auto Care program qualifies certain shops and regulates procedures like out-of-town warranty claims. General repair shops are honored to fly the NAPA flag and gladly pay the asso- ciation fees. The NAPA logo acts like a magnet to increase car counts. ATRA needs to become a magnetic
name, too. If ATRA remains as a tiny window decal, or if the ATRA logo is one of an assembly of endorsements like AAA or BBB in the Yellow Pages ad, it won’t draw customers. The value of ATRA affiliation will
only blossom when the positive image of a Member shop is linked to that affil- iation. If 2000 Member shops advertise their commitment to professionalism, ethics, and warranty, it enhances each shop’s image. Those ads need to link the shops to the “striving for excel- lence” attitude that their ATRA affilia- tion stands for.
Taking Care of Business
Franchisor item 2 is a proven,
workable system for the novice busi- nessman. Then the franchisor follows up with shop visits and a critical analy- sis of operational results.
GEARS May/June 2010
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