ENGLEWOOD, Colo.-Times are anything but BORE-ing around Big O Tires Inc.
Despite the name and acronym of the operation that handles the franchiser's company-owned store network-Big O Retail Enterprises or BORE-the new unit has embarked in a direction the company has traditionally shied away from until recently. For years the Englewood-based subsidiary of TBC Corp. has viewed company-owned outlets as nothing more than a temporary stanchion until a suitable franchisee can be found for the store.
And sometimes, if a franchisee failed, the company would, at least temporarily, take over operation of that store until someone else could make a go of it.
But with the establishment of BORE and naming of industry veteran John Eckman, 48, as vice president of retail operations, BORE may also be shorthand for ``Big Opportunity.'' The firm currently has five company outlets, is on the verge of opening two more, in Dayton, Ohio, within weeks, and has a goal to have 20 stores running in the Ohio and Indianapolis markets by the end of the second quarter of next year.
Big O President John Adams acknowledged that's an ``aggressive plan,'' but is a commitment the company has made to its TBC parent, which also operates the Tire Kingdom Inc. (TKI) Florida retail chain.
BORE actually has been set up as a separate company licensed to use the Big O name and trademark, Mr. Adams said. It is being viewed as somewhat of a separate ``franchise'' operation apart from Big O's real meat and potatoes-which has always been its franchising program for independent dealers.
During a conference call interview with Tire Business, Mr. Adams and Mr. Eckman outlined BORE's future plans, as well as new training initiatives for Big O.
Big growth plans
Since its inception, Big O's ``bible'' has been what the company calls its ``Blue Book''-drafted years ago by ``Uncle'' Tom Staker as an operational blueprint for franchisees. And except for some nuances each individual dealer brings to his or her operation, it has been a successful outline.
Now, ``we've taken a new twist to try to bring in some more Big O company-owned stores'' into the fold, Mr. Eckman explained.
New BORE stores will be run exactly to the tune of the ``Blue Book,'' following every rule and regulation. They will become, in essence, models for the entire company, which then can bring in a franchisee-in-training and say: ``This is exactly how Big O runs its operation,'' he said.
The only exception is a computer system unique to the company-owned outlets. Unlike Big O's typical independent franchisees, BORE stores fall under the retail management umbrella of Tire Kingdom and are tied into TKI's multi-store system. ``TK has the infrastructure in place to operate a multi-store chain at the flip of a switch,'' Mr. Eckman said. ``That's one reason why we've taken the stores and put them in the hands of TK.''
In an earlier interview with Tire Business, Mr. Adams had explained that Tire Kingdom ``has the systems and management and incentive compensation types of programs to run company-owned stores, while it's easier for us to focus on operating franchise locations.''
Big O wants to open eight BORE stores in Ohio, with the balance of new ones in the Indianapolis market. Not all store sites have been chosen yet.
Putting the operation under Mr. Eckman's guidance was a no-brainer because he's ``already proven he can be successful in the tire industry,'' Mr. Adams said.
After a short stint in the early 1970s with Firestone, Mr. Eckman worked for more than 20 years with Cincinnati-based Michel Tire Co. He ran its retail operation-growing it to some 89 outlets-until shortly after the company was acquired by the Florida-based retailing chain Morgan Tire & Auto Inc. (which does business as Tires Plus and itself recently sold majority interest to Bridgestone/Firestone Inc.) He then joined TBC.
Although Big O is focusing on expanding its own company store network, Mr. Adams said it's ``more interested in in-filling into markets'' where Big O already has an established franchise base.
For example, in the Los Angeles area, where ``we've got almost 60 stores,'' he said Big O ``could probably add another 100 and still not saturate that market.''
The company also is looking at continued growth in northern and southern California, Arizona, Colorado and Utah. ``We'd like to expand in any state we're already in...we're always looking for opportunities for growth,'' he said.
For instance, Big O has 40 stores in Utah-many in the Salt Lake City area where a new training center is being built-and would like to add about four outlets in that state next year.
In addition to a net goal of 20 BORE stores by mid-2002, Big O hopes to open an overall total of 35 outlets next year, said Mr. Adams, a longtime Big O executive who's been president about 15 months.
The company's tally to date is 492 franchise stores and it likely will open its 500th outlet before the end of the year.
Right now, which store will become the milestone mark is a moving target.
But Mr. Eckman-who runs the BORE operation from his base in Loveland, Ohio, near Dayton-has some ideas about that. He's hoping one of his new Dayton stores will be Big O's 500th since TBC got its start in Dayton and ``it would be sort of full circle for the company.''
What Mr. Eckman brings to the corporation, and the major advantage of BORE, according to Mr. Adams, ``is the ability to have a core concentration of stores in a limited geographic area so we can build up efficiencies with supervision and training programs and things of that nature.''
Big O hasn't had that in the past because its few company-owned outlets have been scattered around the country.
Ohio was selected as the base from which to expand BORE, in part because of its proximity to a company warehouse in New Albany, Ind., as well as to ``take advantage of name recognition in that part of the country,'' Mr. Adams said, ``without moving into geographic areas that already have franchise locations.''
``We've got the warehouse in place capable of handling our distribution...,'' Mr. Eckman added, ``and the Dayton market is really starving for a great retailer.''
Although the typical model for a Big O franchise is a 70-percent concentration on tires-some range as high as 85 percent and a few do only tires-Mr. Eckman said BORE stores have ``increased our service mix somewhat, but also increased our units (tire sales) along the way.'' He thinks the ``perfect mix'' for a company store is a ratio of 60-65 percent tires vs. 35-40 percent service, which he said includes anything that's not a retail tire unit.
Big O executives recently participated in a semi-annual dealer council meeting, held at Goodyear's Akron corporate headquarters at the invitation of the tire maker. During the visit, Mr. Adams said he and others got to do a comparison on the company's test track of Goodyear tires vs. some competing brands, and also ``learned more about tire construction.''
Goodyear, he added, ``has committed to keeping us in the forefront with cutting-edge products. We looked at new-generation products, tread designs, and made some selections.''
Overall sales for Big O's store network, including Canadian associate stores, is approximately $600 million. Mr. Adams did not break out numbers for company-owned vs. franchise outlets. But he noted that Mr. Eckman's BORE stores will ``soon be my largest franchisee.''
``I'm going to be his best customer,'' Mr. Eckman added, laughing.
New training emphasis
Training has always been a hallmark of Big O's success. Though the company hasn't introduced a new training program, it is constantly developing new modules or classes for dealers, Mr. Adams said.
However, the company recently broke ground for a new ``Big O University'' training center about a quarter mile from its corporate offices. It sold, to a franchisee, its old Denver-area training center, which includes a working store and classrooms, but will continue to rent space there until the new facility is up and running in March 2002.
The new site also will include a working store featuring what Mr. Adams described as Big O's ``new footprint''-a drive-through oil-and-lube bay and a tire service ``speed lane'' that all new Big O stores have.
Mr. Adams put together a training team, operating out of Indianapolis, for the BORE stores and has invited franchisees to participate for ``extensive training.'' He said the company also is ``experimenting in a very serious way'' with launching more regionalized training centers. After combining three real estate parcels, it has developed a new store in Salt Lake City that has 11 bays, compared to the six a typical Big O store has. It will include classrooms and be used for training.
Rather than bring new franchisees into Denver for schooling, he said the company would like to conduct ``mobile'' training by taking classes to field operations.
Big O will monitor the usage of its program by calculating ``student days of training,'' Mr. Adams said. ``If we're getting good bang for the buck, we'll do (regional training) in other parts of the country.''
The only difference is that regional training sites would be at franchised store operations, would be open to all Big O dealers in the area, and will likely be set up in locales with a high concentration of Big O stores.
``We still profess to have the best training in the industry,'' Mr. Adams said, ``and we'll continue to add classes as the industry changes.''