Auto-Lab Franchise Management Corp., an auto service franchisor, has partnered with Michigan-based LV2 Equity Partners L.L.C. to form a new corporate entity and expand its Auto-Lab Car Care Centers stores and franchises.
Auto-Lab L.L.C. is co-owned by the two firms, with LV2 holding the majority share, according to Frank Brandenberg, Auto-Lab L.L.C. chairman and CEO. Terms of the partnership weren't disclosed. The new company has begun looking for locations in new markets both within and outside of the states—Michigan, California, Florida, Indiana, Illinois and Iowa—where it now operates.
“The intent was to bring a partner into the company and capital into the company so that we could accelerate the growth of franchising as well as open up company-owned stores,” Mr. Brandenberg told Tire Business.
Auto-Lab operates 38 franchises and company-owned stores, about 30 of which are in Michigan. With LV2 as a partner, the franchisor wants to leverage its store base in Michigan, Indiana and Illinois to expand into states such as Ohio, Kentucky, Tennessee, western Pennsylvania and northern Florida, Mr. Brandenberg said.
He added that Auto-Lab wants to have more store density to leverage brand recognition and advertising, as well as lower operating costs and expand customer loyalty programs. In five years, Auto-Lab envisions that two-thirds of its locations will be franchises.
Auto-Lab President Steve Wilson declined to disclose company sales but did say that year-over-year sales were up 13.1 percent.
Auto-Lab Complete Car Care Centers, founded in 1989, offers car repair services, preventive maintenance and diagnostics. The firm calls itself the “dealer alternative” and extends a 12-month/12,000 mile warranty on all parts and labor.
According to its website, LV2 Equity Partners targets niche manufacturing, value-added distribution and specialty service businesses.
A typical investment candidate must have revenues between $3 million and $30 million, and the private equity firm prefers Midwest business.