HOFFMAN ESTATES, Ill. (Feb. 18, 2010) — Sears Holdings Corp. hopes to expand its Sears Auto Center network by recruiting former car dealerships as franchisees.
Sears is launching the Independent Sears Auto Center franchise program, allowing automobile dealers who have lost their GM or Chrysler new car dealership franchises to operate as licensed Sears Auto Centers.
The company said Coleman Auto Group of East Windsor, N.J., is the first car dealership to take advantage of the program and will open a Sears Auto Center March 27 on the site of its former Chrysler dealership.
“With over 3,000 automobile dealerships that have lost their franchise, Sears designed the new franchise program to help those dealers leverage their facilities by building a set of businesses around parts and services, over-the-counter merchandise, and previously-owned vehicle sales,” Sears said in a statement.
The Sears Auto Center franchise locations will provide the same products and services for automobiles, light trucks and motorcycles that are offered at the nearly 850 company-owned Sears Auto Centers across the country.
Sears expects many of the new franchise locations to be located on properties adjacent to pre-owned vehicle and body shop operations, “making it even more convenient for customers to service their existing vehicle or shop for a new vehicle.”
“For customers, Sears Auto Centers will be more convenient than ever, with more locations providing our full product and service offerings. This is also a great opportunity for dealers who are currently selling used cars to gain a brand that's nationally recognized for quality and dependability, a resource for buying high-quality auto parts and supplies, and access to a proven business model that has been tailored to their needs,” said Bill Jackson, senior vice president of Sears Holdings and president of Sears Authorized Independent Auto Centers L.L.C.
According to Sears, the franchise advantage includes:
* The strength of the Sears, DieHard and Craftsman brands;
* The ability to leverage Sears marketing, Web presence and social networking;
* Purchasing power on tires, batteries, parts, equipment and supplies; and
* Access to the Sears credit card and the corporate systems and processes.
“We are creating an opportunity to leverage Sears Automotive's scale, business processes and brands so that dealers can build their businesses in service, parts and used vehicles,” Mr. Jackson said.
Last year, as General Motors Co. and Chrysler Group L.L.C. went through bankruptcies, the auto makers began pulling the franchises, with GM notifying some 1,350 dealerships and Chrysler almost 800. However, a law passed by Congress and signed in December by President Barack Obama set up arbitration for rejected GM and Chrysler dealerships that want reinstatement.
More than 1,550 car dealerships gave notice that they intended to seek reinstatement through arbitration—triple the number expected by the American Arbitration Association (AAA), which is overseeing the program. More than half of the 2,789 car dealerships eligible to seek reinstatement gave notice by the law's Jan. 25 deadline that they intend to do so. That included 409 of the 789 shuttered Chrysler showrooms.