Auto-Lab Franchise Management Corp., an automotive service franchisor with 36 repair centers in six states, is looking to expand its franchise concept into new territories and is looking at existing independent shop owners to help it grow.
Founded in 1989, the auto-service provider has repair centers in Michigan, Arizona, Florida, Illinois, Iowa and Indiana. An additional shop opening in Florida, as well as ventures into Nebraska and California are planned for the future.
The Plymouth-based business expanded from 24 stores in 2004 and is focusing on master franchising. Auto-Lab would recruit master franchise candidates in different geographical regions of the U.S. who could buy the rights to a territory and develop their acquired areas with the intent of sharing the royalties with the company, said Stephen Wilson, president and COO of Auto-Lab.
Mr. Wilson previously was the head of operations for a Midwest chain of 13 independently owned Big O Tires Inc. stores before starting as a consultant for Auto-Lab in 2006. He said he expects 42 Auto-Lab stores to be operating in nine states by year-end.
Typical store configuration is six bays with an average of 3,800 to 4,100 square feet.
As another way to add stores to its franchise network, Auto-Lab offers independent shop owners a conversion program. For half the price ($12,500) of starting an Auto-Lab from scratch, service providers can make their shops a part of the franchise program.
According to Auto-Lab's Web site, conversion also offers potential franchisees a fast-start kit, which includes computer systems, hardware and software as well as $5,000 or 50 percent toward approved store signage.
Interested participants also can receive $2,500 toward marketing over the first six months of the conversion period, a 50-percent reduction of royalties for the first year, and the opportunity to participate in group advertising campaigns, among other benefits.
``The most important aspect of the conversion is one, does it fit within our geographic footprint, and in metro areas, are the locations being considered outside of the three-mile protected territory?'' Mr. Wilson said.
``Secondly, what is the configuration. If less than six bays, is there room to expand?''
Those interested in starting an Auto-Lab franchise—whether in metro or rural areas—are responsible for securing their own property. Auto-Lab's philosophy is to not own any property or real estate, Mr. Wilson said, because of problems that may arise with a franchisee, he added.
``If you've got a franchisee that may be struggling for whatever reason and you've got a big mortgage payment to pay, where's your focus become, on helping them or just getting someone in there who can help make the mortgage payment and cover the (difference)?''
Mr. Wilson said the firm focuses on the franchisee since Auto-Lab's revenue intake relies on royalties.
To help the franchisees, Auto-Lab negotiates prices with vendors across the country to get its shops national brands.
Auto-Lab stores use brands such as NAPA and Carquest for parts, Interstate for batteries and Valvoline for oil, according to Mr. Wilson. ``Our income stream comes from royalties only, we don't make any money on anything we sell to the franchisees or promote with the franchisees,'' he said. ``We're there to support them and their success becomes our success and we'll be rewarded accordingly.''
Mr. Wilson said the company's relationship with vendors is strong, which is important because customers may not know the Auto-Lab name but they may know the names NAPA, Valvoline and Carquest.
``We've looked at the partnership and said (a strong relationship with vendors) is important, not only for the branding but also for the long-term warranty opportunities and the relationships. We have to make sure that the consumer feels as comfortable visiting an Auto-Lab in Florida as they do an Auto-Lab in Michigan,'' he said.
Speaking of Michigan, Mr. Wilson said that operating stores in the depressed economic conditions of that state has been the biggest challenge facing the franchise program this year.
To try and solve the problem, he said stores are offering discounts for customers that will impact a car's basic components over its automotive life. This is done, in part, so that the car count at shops continues to stay strong, he said, but also to show that the business is aware of the environment in which it is operating. ``If a consumer is hurting, then you can feel that same hurt,'' he added.