Published on July 24, 2014

Big O Tires going 'Full Speed Ahead'

Tire Business file photo by Bruce Davis
Big O TIres Executive Vice President Kevin Kormondy — shown here at the 2012 SEMA Show — outlined the company's 'Full Speed Ahead' agenda at the recent dealer meeting in San Diego

WEST PALM BEACH, Fla. (July 24, 2014) — TBC Corp.’s Big O Tires unit, after a few years of consolidating and shoring up its franchise network, has put together a package of incentives to spur growth both in the number of stores under franchisee control and in boosting revenue per store and customer.

TBC and Big O management outlined the company’s vision at the recent Big O franchisees’ national meeting in San Diego, where convention-goers were struck with Big O’s message for the coming year: “Full Speed Ahead.”

According to Executive Vice President Kevin Kormondy, Big O management sees store growth coming from three distinct areas, or in Big O vernacular, a three-legged stool:

  • Existing franchisees adding stores, either by building new stores or acquiring other Big O locations;
  • Existing independent tire dealers/auto service business owners who convert their stores to Big O or sell their location to a Big O franchisee; and
  • Entrepreneurs looking for a lucrative franchise opportunity.

From the individual franchisee point of view, Big O is concentrating on a number of issues and incentives to help dealers boost their bottom line, Mr. Kormondy said.

“We’re emphasizing ‘top line’ sales,” he told Tire Business, “which, when properly managed, drive profitability.”

Among the specific goals discussed at the convention to drive top line sales were increasing daily customer count by two cars, selling two more tires per day per store, improving service offerings to yield a larger ticket per customer, etc.

To achieve these goals, Big O franchisees were offered seminars on improving phone skills, increasing online traffic, improving the safety inspection process, being more diligent with looking at customers’ factory scheduled maintenance needs, etc.

Big O Tires.
Big O Tires' recent television advertising has featured a 'typical' Big O technician touting the 'carma' drivers can get by having their vehicles serviced at a Big O location.

“It’s all about creating a great experience for the customer,” Mr. Kormondy said, “which relates back to our advertising message — ‘Tires. Service. Straight Talk.’ — which allows us to build trust.”

Some of these initiatives are designed to address the issue of a changing vehicle parc demographic, TBC President Erik Olsen told attendees, specifically the recession-induced dip in cars five to 12 years old — traditionally the independent dealer’s “sweet spot” — and the resurgent bump in cars newer than five years.

To support its franchisees’ efforts, Big O is improving its field sales operations and is offering consultations with point-of-sale vendors and the in-house real estate and design teams.

The unit also is working to keep the Big O tire portfolio current and to improve supply through the TBC Wholesale network, Mr. Olsen said, along with shoring up Big O’s relationship with Michelin Americas Small Tires.

From a numbers perspective, Mr. Kormondy told those attending the San Diego convention Big O’s objective is to see the network grow by 22 stores this year and 100 over the coming five years.

This growth goal comes after several years of contraction, as Big O trimmed the network down to a core of about 280 to 300 franchisees operating 365 locations in the 20-plus states where Big O operates. Of a total of 402 outlets, TBC/Big O still controls 37 stores directly, though the company has sold several corporate stores in the past couple of years. The majority of the rest — perhaps as much as two-thirds — are single-store operations. Management continues its search for an appropriate franchise solution for those locations, Mr. Kormondy added.

To encourage existing franchisees to consider adding a store or stores, Big O is waiving the $30,000 one-time franchise fee, scaling back the franchise royalty for the first few years, pumping up matching fees for store renovation costs, helping secure affordable finance terms, etc.

Big O also has started offering existing franchisees the option of a five- or 10-year renewal, he said.

The company also is working with franchisees to see their investment in a Big O franchise as part of their retirement planning.

“It’s our belief that a part of the value of a franchise like Big O is the resale value of a business associated with a successful network is greater,” Mr. Kormondy said, “when it comes to that point in time where a franchisee is ready to retire or move on.”

Big O also has a vested interest in helping franchisees with succession planning, Mr. Kormondy said, since it’s in the company’s best interest to keep a successful location in the Big O family.

To attract new franchise candidates, Big O has upgraded its bigofranchise.com website, with lots of testimonials from successful franchisees.

Big O also continues to support and work through VetFran, an initiative of the International Franchise Association that helps returning military service members access franchise opportunities through training, financial assistance and industry support.

The largest franchisee in terms of store count is the Scott Koldenhoven/Mike Pryor partnership, which is opening its 13th store in the Colorado/New Mexico area this summer, according to Big O._____________________________________________

To reach this reporter: bdavis@crain.com; 330-865-6145. Twitter — @reifenmensch.

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