SAN DIEGO-Big O dealers, gathered to hear the latest news from North America's largest independent retail tire franchiser, got an earful at the group's annual convention in San Diego, Feb. 6-9. Along with presentations by such industry notables as Goodyear Chairman Stanley C. Gault, Kelly-Springfield Tire Co. President Lee N. Fiedler, National Tire Dealers & Retreaders Association Executive Vice President Philip P. Friedlander Jr. and Paine Webber Securities Analyst Stephen Girsky, some 300 Big O dealers at the meeting learned about:
The addition of two new Big O brand tires-the ``Hydro Trac,'' an aquachannel passenger radial, and the ``Lightning HPT,'' an S-rated light truck tire;
A general upgrading of existing Big O brand tires, which along with the debut of the two previously mentioned tires, was attributed to Kelly-Springfield's becoming the primary manufacturer of the Big O brand;
The availability to Big O dealers of a new farm tire line as well as the Heritage brand, which will replace the Arapahoe brand at the low-priced end of the company's ``Good-Better-Best'' line-up;
Plans for opening a Big O training center in Louisville, Ky., during the first quarter of 1995 in addition to the one opened by the company last year in Mesa, Ariz.;
Development of a new Big O ``master franchise,'' which like the planned Louisville training center, is intended to expedite the chain's eastward expansion in the U.S.;
A new Big O credit card, offered through American General Finance Inc. of Evansville, Ind., by which dealers can provide customers up to six months' deferred payment or 12 months ``same as cash''-and without having to pay a merchant fee;
A new automated business system, known as BOSS II, chosen out of a field of 41 software programs for tire retailers; and
A new sales incentive plan encouraging franchisees to increase their purchases of the Big O brand, which now is said to account for 60 to 70 percent of the average dealership's tire sales.
In keeping with the convention's theme, ``The future is now,'' President and CEO Steven P. Cloward told the gathering that Big O, during the past seven years, has been preparing itself for ``a future of intense competition, but boundless opportunity.''
``We've undergone a massive restructuring of our distribution system,'' he said. ``We've implemented a company-wide image and merchandising makeover that's given our stores a more modern, professional appearance. We've established a state-of-the-art national training center.
``And now,'' Mr. Cloward said, referring to the new supply agreement with Kelly, ``we've teamed with world-class manufacturing partners in order to provide the best in quality and availability.''
He said the transfer of production to Kelly-Springfield from the Big O brand's former majority supplier-General Tire-should be completed by year's end.
The company announced in January it was terminating its previous supply agreement with General and transferring production of the Big O brand to Kelly.
Mr. Cloward said this change has improved both the appearance and the Uniform Tire Quality Gradings of many Big O brand tires, including the top-of-the-line Legacy Plus, whose treadwear grading rose from 370 to 520.
Big O's President said the company plans to open from 35 to 40 new franchised outlets during 1994. However, the actual total could run higher if the company proves successful in signing up entire chains of retail outlets.
To hasten Big O's expansion into the eastern U.S., he said the company is looking to convert multiple-outlet retail chains capable of providing it with an immediate presence in local markets.
This could be carried out either through direct acquisition or by converting existing businesses using the company's new ``master franchise'' program, he said.
Mr. Cloward said the company will consider future acquisitions similar to that of Tire Brands Inc., the distributor of the Sonic brand, which Big O purchased last year and operates as its ``Tire Marketers Association'' division.
Vice President of Business Development Ron Lautzenheiser, who will direct the expansion effort, told dealers that every additional Big O outlet adds to the value of their franchise.
``If we didn't have 400 outlets,'' he said, ``Kelly-Springfield would be a lot less interested in supplying us with our own brand of tire. They would probably not be as interested in supplying us with leading-edge products like the Hydro-Trac and Lightning....
``And most importantly....your own business wouldn't be worth as much as it is. So growth is vitally important to all of us.''
The new master franchise, details of which are still being worked out, is intended to encourage multi-outlet dealerships to function as Big O distributors to franchisees within their respective territories.
Master franchise holders will receive a portion of the franchise fees paid by these new Big O stores as well as distribution profits from supplying them with products and merchandising help.
Mr. Cloward said the firm's membership in the Summit Tire & Battery Inc. group, of Brandon, Fla., effective March 1, will provide it with a needed farm tire line and make it the sole distributor of the Kelly-manufacturered Heritage brand in most local markets where Big O has a presence.
Heritage tires will be available to all Big O outlets. The company plans to use the Summit group's warehouses to service Big O master franchisees in the eastern U.S.