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May 13, 2002 02:00 AM

Ol' Grandma's gone (sniff, sniff)

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    Say a silent prayer for ``Grandma,'' who's no longer with us.

    Gone to that tire dealership in the great beyond-sent there by a group of Big O Tires Inc. franchisees.

    Led by dealer Mark Buker and several other Big O store owners, the group has entered into agreements to purchase nine retail stores-including one combination commercial/retail outlet-in the Salt Lake City area that were previously operated as Grandma's Tires locations by Dick Morrison Tire Co. The deal was finalized April 30 and the transfer of locations is under way and should be completed by May 15, Big O President John Adams told Tire Business.

    Terms of the transaction were not disclosed.

    However, Craig Morrison, president of the company, said Mr. Buker and the group have acquired the hard assets, inventory, equipment, cash and receivables, and have agreed to purchase the real estate in time. Of the nine stores, Morrison Tire owned the ground under five of them.

    With the acquisition, Morrison Tire will quietly slip out of existence. The dealership, which marks its 70th anniversary this year, is owned by Mr. Morrison and his dad Robert, who turned 74 on May 9. The only piece of the puzzle left for the Morrisons is a 10th store the company operates in Provo, Utah. It is negotiating its sale with a local tire dealer.

    In addition to the nine just-acquired stores-which spanned an area from Ogden, Utah, in the north through Salt Lake City to Provo in the south-Morrison Tire also included a wholesale operation centered at the company's Salt Lake warehouse, where the commercial/retail site is located. The 45-year-old, 55,000-sq.-ft. distribution center and real estate was purchased by Big O and its Memphis, Tenn.-based parent, TBC Corp.

    Besides Mr. Buker, who will take over three Grandma's locations, Ken Gubler, a Big O franchisee in Bountiful, Utah, will assume operation of two stores.

    The remaining four stores will be split among a group of some eight franchisees who, with Mr. Buker and Mr. Gubler, already operate nine stores, Mr. Adams said, noting, ``they're now in the process of swapping out inventory.'' The plan was to take over three stores per week until all eventually fly the Big O flag.

    Until about a year ago when they all became Grandma's Tires locations, some of the Morrison stores carried the Carmerica banner under a program that was operated by Hercules Tire & Rubber Co.

    Milo Paskett, controller for Morrison Tire, told Tire Business 19 employees-including warehouse, delivery and accounting department personnel-work in the warehouse. But neither he nor Mr. Morrison knew how many might stay on once the transfer of Morrison's wholesale operation to TBC/Big O takes place May 31.

    That operation-which accounted for approximately half of Morrison Tire's annual sales of about $15 million, according to Mr. Morrison-services some 550 accounts in Utah, northern Nevada and areas of Arizona, Wyoming, Colorado and Idaho. He said ``Big O and we are assuring our wholesale customers that life will go on, and they'll continue to be supplied.''

    All told, 60 percent of Morrison Tire's business was in wholesaling, with retailing accounting for 30 percent and the remainder in commercial.

    The obvious question, of course: Why sell the dealership?

    ``The old man and I have been running this operation for some years now,'' replied Mr. Morrison, who initially had envisioned someone other than Big O buying Morrison Tire. ``I entered the business during the Carter administration. Without any clear successors, let's say I've been positioning the company for sale for some time now. All I needed was for someone to knock on the door and ask the pertinent question.''

    That happened back in January, when Mr. Buker came knocking.

    Mr. Morrison called him ``a legendary Big O franchisee who, I understand, has the No. 1 Big O store in the country. He does about the same in his two stores as I do in my 10. So it's time for the amateurs to get out of the way and let the professionals take over!''

    While Craig Morrison has signed a no-compete clause, he admitted he's positive he will not re-enter the tire business again. ``My wife informed me that I'm her love slave, and that I need to spend the next few months fixing the house and watching the kids. I've avoided both for a number of years,'' he joked.

    His dad, on the other hand, has offered his services to Mr. Buker.

    ``I can't run away fast enough,'' Craig Morrison said, ``but this has been his baby for 60 years. It's in his blood.''

    Founded by Craig's grandfather, Dick Morrison, in 1932, the dealership originally started out as a fledgling tire shop with a hand in the auto salvaging business. That is, until it discovered recapping, he said, ``which put us on the map.'' His father has run the operation since 1954, after his granddad died.

    Today, the home state of the Mormon Tabernacle Choir is fast becoming a tire retailer battleground. Big O christened its 500th store overall-and its first in Salt Lake-last December. With the addition of the Morrison stores, the company now has more than 50 outlets in Utah, but there's someone else knocking on the door.

    ``It makes sense to me that Big O is looking at the 800-pound gorilla to the Northwest,'' Mr. Morrison said, referring to Prineville, Ore.-based Les Schwab Tire Centers Inc., which arrived in the Salt Lake market last year with two stores and promises of more to come.

    Along with Schwab, Englewood-based Big O is one of the largest independent retail tire and auto service franchisers in North America. The company operates more than 500 stores, primarily in the West and Midwest, and also distributes tires and other automotive service products to associated dealers in western Canada. In addition to its own Big O private label, franchisees and company-owned Big O outlets also handle major brands including Michelin, BFGoodrich and Goodyear.

    ``This positions us well, from an investment standpoint, because we now have (Morrison Tire's) customers,'' Mr. Adams said, as well as a bigger stake in the Salt Lake market.

    In a prepared statement, he said Big O is ``gratified that this group of franchisees wanted to increase their investment in Big O through this acquisition.'' And Mr. Buker said the franchisee group appreciates ``the opportunity afforded us by Robert and Craig Morrison to service their customer base. While we have competed against each other for 40 years, we are happy that they chose Big O Tires to continue the fine service provided to their customers.

    ``All of the Big O franchisees look forward to the opportunity of meeting these customers and continuing the service and warranties. In addition, we welcome the Morrison employees to the Big O family of associates and look forward to working with these fine people.''

    While for the past two years Big O has had a program it calls ``Knockout,'' which encourages franchisees to acquire competitors if the situation presents itself, ``we've never had quite a response like this'' with such a large number of franchisees, Mr. Adams said.

    What typically happens, he explained, is a tire retailer planning to retire perhaps has no one to take over his stores. A Big O dealer may be ripe to step in and acquire the business. The Knockout program provides some incentives to the franchisee, such as financial help in order to make capital improvements to the properties.

    The deal apparently was a knockout for Craig Morrison. Presented the opportunity to offer a ``parting shot,'' he didn't even have to think long about it: ``I am a happy man!'' he said gleefully.

    As for that unique dealership name that now fades to black...back in 1974, when the company entered the retail business, Bob Morrison was looking for something that instilled trust. And who doesn't trust their Grandma? Unless of course she's Ma Barker.

    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Tire Business would love to hear from you. Email your letter to Editor Don Detore at [email protected].

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