WESTMINSTER, Colo. (June 10, 2002)—Would you like peanuts and some hot sauce with that performance tire?
Sounds like a weird request and, granted, it's probably not one the Patrick brothers have heard…or will. But who knows? It could add a whole new wrinkle to a tire store.
Depending on your perspective, these 30-something entrepreneurial brothers either got into the tire business bass-ackwards, or epitomize the adventurous franchising spirit at its most divergent point. Their entry into retailing came in 1971 when the Patrick family opened a Dairy Queen ice cream stand, followed a while later by another. In 1979, Todd Patrick and his brother Scott, along with their father Don, opened Grease Monkey International (GMI) Inc.'s first quick-lube operation in the country.
This past March 31 the duo opened another Grease Monkey, their fourth, in Arvada, Colo., and a day later entered the tire business with the grand opening of their first Big O Tires Inc. outlet, which shares a symbiotic relationship with the attached Grease Monkey store. (Englewood, Colo.-based Big O, a subsidiary of TBC Corp., operates one of North America's largest tire franchising programs.)
The Patricks' company, D & A Inc., is based in Westminster, with Don at the helm as president and Todd, 37, and Scott, 38, its vice presidents. While Todd doesn't ever anticipate doing a combo tires/ice cream parlor, he told Tire Business the Grease Monkey-Big O collaboration—he called it a “natural fit”—complement each other and are on their way to producing cool profits, nonetheless.
Support is crucial
No matter the type of franchise operation, getting support from the franchiser is critical to the success of a business. Mr. Patrick said that although his company has two relatively successful DQ locations, it is “kind of getting away from Dairy Queen—they're a little harder to run.” Basically, it's tough finding good employees when, apart from store managers, the second-tier of staffing draws a lot from a pool of high-schoolers.
“It's a little more frustrating, from a management standpoint, to be successful,” he acknowledged. “And we don't get nearly as much franchise support from DQ as we get from GMI and Big O,” both Colorado-based corporations while DQ has its headquarters in Minneapolis.
Although both the DQ's are “doing pretty good,” Mr. Patrick doesn't anticipate adding more. But he is sold on Grease Monkey and would like to boost his store count, possibly combining them with more Big O outlets. “We were most impressed with Big O,” he said. “All the owners want you to succeed.” Many came out to the Patricks' store to help in the planning process, as well as with the grand opening and to just give useful advice. “You just don't see that in DQ,” he added. “Everybody's in competition with each other.
“With Big O, there's competition, but I think the owners realize if we're all strong, it makes the company stronger. I don't think DQ realizes that. It's not that we're discouraged with DQ, but the GMI franchise has become a lot easier to run. We know it like the backs of our hands.”
Denver-based GMI, one of the nation's largest franchisers of automotive preventive maintenance centers, has begun to shed its company-owned Grease Monkey locations, and the Patrick brothers are considering acquiring five stand-alone stores. “We've been one of their better franchisees, so they're trying to see if we're interested in buying them,” Mr. Patrick said. He described GMI as “just an awesome company to work with—very supportive. All the people are great, super.”
Operating a combination Big O-Grease Monkey site under one roof is still a relatively new phenomenon—most outlets that are trying the concept are constrained by real estate and have a tire store with an unattached lube operation on the same or a nearby parcel. Mr. Patrick said he's received “100-percent support from Big O executives. They've been nothing but helpful about the whole process…they think adding a Grease Monkey is a good idea.”
He has found GMI very similar to Big O in its support of franchisees. “Their first concern is the owners themselves, and making sure everyone is successful.”
Many dealers are reluctant to do oil changes within the confines of their tire stores, he continued, because they don't produce a good enough cash flow to justify taking up valuable bay space that might be more productively used for bigger-ticket repairs such as brakes. But a separate oil-lube-fluid maintenance center that can pull a healthy car count can become a cash cow in a relatively short period.
Just ask Ron Lautzenheiser, a former Big O executive who's not afraid to admit he loves having a monkey on his back. He and his son operate a Big O store in Fort Collins, Colo., with a Grease Monkey across the parking lot. It is somewhat unusual in that the lube operation hit the break-even mark only six months after opening. He told Tire Business he just bought land in Windsor, Colo., for another Big O-Grease Monkey site and is scouting several other locations to add more Monkey business.
The Patricks are hoping that a little diversity will even out the seasonal bumps in their retail road. While summer is a busy time in a tire store, Mr. Patrick said winter also can be a peak business time for tires and service. That's just the opposite of most DQ's, which rely on those hot summer months to keep the cash register humming and often starve when the snow flies.
Operating three different franchises, he added, is a way to “back ourselves up in case one failed.”
“You never want to stop learning. It's been more of a challenge to step into something else and see if we could make that run,” he said. “No matter what you do franchise-wise, they're similar; though they sell totally different products.”
Mr. Lautzenheiser—a tire industry veteran who left Big O in December 1998 and also lists the old General Tire Co. on his rÃ&Copy;sumÃ&Copy;—noted that his Grease Monkey operation sees a “whole new customer base.” While a tire store normally doesn't get to service vehicles 2 years old or younger until it's time for new tires, oil-lube centers can crack that barrier with oil changes every few thousand miles. “It's very inefficient to do oil changes in a tire store,” he said, citing wasted bay space and the view that oil is merely used as a traffic generator and customer convenience.
He's fond of referring to the integration of a quick-lube and tire store as going together “like peanut butter and jelly.”
Despite the dissimilarities between auto service and ice cream, the Patricks have used their businesses to promote each other's specials. “We try to cross coupons between them, with a sale or promotion at one store, and try to give discounts to customers across the stores,” Mr. Patrick said. The typical response is about a 2- to 3-percent return on the coupons, though when he held the Big O store's recent grand opening, coupons produced “a tremendous response.”
“We like to reward our customers if they're patronizing both locations—we'll try to do whatever we can to take care of them,” he said.
At Mr. Lautzenheiser's store, he's found the same cross pollination works, but in a strange way when it comes to tire rotations. “The oil-change outlet is the best place to catch 'em for other maintenance needs,” he noted. For instance, his Grease Monkey store advertises tire rotations at $12 a pop, while there's no cost for that service at Big O.
And he's found that, “believe it or not, a lot of people would rather pay the 12 bucks than go across the parking lot to get it done for free.” He also has used coupons—for oil changes at the Big O store—redeemable for a discount at the Grease Monkey, and uses a poster that jointly promotes both ventures.
While tire dealers often lament the proliferation of tire sizes and styles, Mr. Patrick can only smile about that predicament at his DQ's. Though they mostly handle chocolate and vanilla soft-serve ice cream, “unfortunately we have a huge menu variety, with 25 to 50 Blizzard flavors. The drawback is, it's hard to inventory all that product. You put something new in and you run out of storage space. Some stuff's dry, some has to be refrigerated, some has to be frozen.”
Grease Monkey outlets provide a full range of fluid maintenance services, including oil and lube, radiator and transmission flushes, differential changes and air-conditioning work. Mr. Patrick said GMI “backs what it sells. Its philosophy is to educate people on what needs to be done on their cars, because the perception sometimes is that you're trying to sell them something they don't need.
“We're educating them on what the manufacturer recommends, then they can decide for themselves.”
A philosophy he carries through to all his franchises is that customer satisfaction counts.
“If you keep a clean facility and take care of the customers, you can be successful at anything you do,” he said. “My dad taught us the right way to do that, and we've built a huge customer base with our first DQ store. You take care of the customer at all costs.
“We bring that same attitude into Big O and Grease Monkey. All our customers realize if there's something we did wrong, we'll take care of it. We're not going to spare any expense to do that.”
“Our guys pretty much know every make and model…and feel comfortable recommending things,” Mr. Patrick continued. “Being better educated for the customers means we make less mistakes.”
And having a combination tire-lube center means “we're giving them more things we can do for them in one location—about 80 percent of all their maintenance needs. With the two mixed, we can really make it a one-stop shop.”