Some 721 Midas Inc. outlets so far have signed on to sell Bridgestone and Firestone brand tires as part of a program inked between the tire maker and automotive service chain last fall.
That tally came at the end of a 27-city rollout in May. Mike VanSicklen, national sales manager for purchase, resale, military and government sales at Bridgestone/Firestone, said he expects about 1,200 of Midas' 1,900 outlets in North America to be selling BFS tires by the end of the year. ``I think we'll make that goal quite handily,'' he said.
In late October, BFS and Itasca-based Midas announced a deal whereby Midas outlets could become authorized dealers for Bridgestone and Firestone brands. Bridgestone/Firestone doesn't sell to Midas direct. Instead, the service outlets must buy through tire distributors or dealers in BFS' family channel. The tire maker also instituted marketing guidelines to try to limit competition with its own independent dealers.
Earlier last year, Midas had ended its previous tire supply agreement with TBC Corp. The new deal counts on participation because only about 73 Midas shops are company-owned; the rest are franchised.
``The addition of these lines of well-respected brand tires at Midas shops is a major step in competing for maintenance and fleet business,'' Alan D. Feldman, Midas' president and CEO said in a statement last fall. ``Although some of our dealers have previously offered tires, this new alliance marks the first system-wide tire program available to all Midas shops throughout North America.''
Bob Troyer, director of corporate affairs for Midas, said many franchise owners were enthusiastic about selling tires after the program was a main subject of the company's spring meetings with dealers. Still, he doesn't expect to ever have 100 percent of Midas' stores selling tires since the choice is up to individual owners.
``We certainly expect to have the vast majority of the shops,'' he said.
BFS now is working on training and educating Midas managers and employees how to sell, stock and service tires effectively. Mr. VanSicklen said the tire maker plans to travel to major cities to hit most Midas shops while its distributors and dealers can train outlying locations.
Mr. Troyer added that Midas probably will hold off on a company-wide marketing campaign aimed at tires until this training is largely done. ``Being that this is a new product and service...we want to make sure everyone is trained properly,'' he said, though franchise owners likely will start direct mail or other targeted advertising on their own fairly soon.
BFS' main objective for the program, Mr. VanSicklen said, is to target the 9 million customers who are regulars at Midas. Assuming 20 percent of vehicles need at least two tires and 80 percent of motorists buy from the first shop that recommends them, BFS could look to sell nearly 3 million tires to just those customers-nearly 6 million if the same motorists buy four tires, he said.
``We can be hugely successful beyond our wildest dreams,'' he told Tire Business. ``The people that are buying from Midas today are who we're going after. We're not trying to have the Midas dealers compete for the same customer that's driving down the street that the family channel retailers are trying to draw into their locations.''
Competition with Midas shops isn't a major concern for Garrett Garofolo, vice president of Tire Xchange in Deerfield, Ill. Primarily a distributor, Tire Xchange also runs a retail shop operating as Deerfield Tire. The dealership wholesales to nine Midas shops in Illinois and another nine elsewhere.
Though he said some competition is healthy, Mr. Garofolo applauded BFS' decision to not sell direct to Midas and instead to include its dealers and distributors. ``Their attitude is they don't sell every type of tire to everybody,'' he said.
Since Midas customers tend to be more budget-conscious, Mr. Garofolo said his Midas shops tend to buy in the ``good'' category. That means Deerfield Tire and a local Midas shop may have tires in that segment priced similarly, but it's not likely to have a huge effect on the latter.
``If the customer was a customer of mine, I believe the customer would probably come here as opposed to going to Midas,'' Mr. Garofolo explained. ``If the customer was a customer of Midas, and now they have the same product, then obviously Midas might get that business...whereas I might not have seen that customer anyway. He might have gone to Costco or Pep Boys.''
But John Hoppe, owner of Duxler Glenview Tire & Service Inc. in Glenview, Ill., isn't as enthusiastic about the program. The dealership is a member of BFS's TireStarz dealer program. Though he doesn't have any Midas shops in his immediate market, Mr. Hoppe said he views the program as similar to deals with car dealerships, which add competition but don't make up for lost sales with small commissions on tire deliveries.
``I wouldn't be excited about it at all'' if there was a Midas shop nearby, he said. ``I would be upset.''
Mr. Garofolo said he supports the program because it introduces Bridgestone/Firestone products to customers who may not have experienced them before because they typically only bought on price. Competitively, it also replaces some of the low-grade tires that skew prices down.
``We're starting to deal with apples to apples, as opposed to apples and oranges,'' he said. ``That sometimes is a very difficult thing to explain to the public.''
Mr. VanSicklen said many BFS dealers are open to the program. That isn't to say the tire program is a piece of cake.
Mr. VanSicklen said the tire maker formed a task force of BFS executives, Midas management and various Midas franchisers with varying tire experience to work out a host of factors. Organizers established the education programs and created a dedicated Web site. Midas also started a rebate program to help franchise owners offset some of the costs.
``The biggest obstacle we had to overcome with the Midas franchise owners was...a mental barrier of not wanting to sell tires because they'd never been in the tire business,'' Mr. VanSicklen said. ``...So it was an effort in...making it as palatable as possible and showing that they've now partnered with a major player that has 5,000 points of sale across the country that are there to help them and teach them and make it easy for them to sell tires.''
Gordon Laslo, manager of an Akron-area Midas shop, told Tire Business tire sales were doing pretty well at his location-despite the outlet being a couple doors away from ProCare and Monro Muffler auto centers and across the street from Goodyear Gemini and Firestone repair shops. The biggest hurdle to selling more tires, he said, has been getting customers to realize that Midas outlets don't just perform brake and exhaust work anymore-``We do it all now.''
Tire Business Managing Editor Sigmund J. Mikolajczyk contributed to this report.