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TBC launches incentive program to expand its retail franchises, attract more Big O dealers

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PALM BEACH GARDENS, Fla.—TBC Retail Group is counting on "carma" to generate business for its Big O Tires franchisees and generate interest in attracting new franchisees to the Big O network. "Carma" is the theme of Big O's current television advertising campaign—showing vignettes of customers whose cars are "protected" from the elements, wayward shopping carts, etc. by the "aura" of having been serviced at Big O.

But that concept could just as easily be applied to TBC's efforts to build the Big O network after a few years of consolidation. Claiming the North American automotive aftermarket is "ripe" for small business owners, TBC has launched an incentive-based initiative to expand its Big O Tires, Midas and SpeeDee Oil Change & Tune-Up brands in the U.S. and Canada to meet the needs of motorists in emerging markets.

TBC is offering potential franchisees to any of the three brand programs a $10,000 discount on the initial franchise fee and an undisclosed discounted royalty fee for the first two years of operation, according to Bill Ketchem, vice president of franchise development since April 2012.

That program has begun generating a lot of interest, Mr. Ketchem said during an interview at TBC headquarters in Palm Beach Gardens, although interest has been higher for the Midas program, where the initial investment is lower. "(The incentive program) has been doing very well for us," he said. "We anticipate we'll have more deposits for new Midas franchises than we've had in the past 10 years.... "The challenge for us now is to find locations (for those applicants)...."

A key element to TBC's plans for Midas is to get most if not all of the TBC-owned franchise locations into the hands of independent owners, Mr. Ketchem stressed. "The goal is to get 100-percent franchised," he said. "We expect to get there this year with Midas, where we have deals pending." TBC has found franchisees for about 30 of the 80 Midas units it inherited in its $300 million takeover of Midas Inc. in April 2012, Mr. Ketchem said, and has "deals pending on quite a few of those" and expects to re-franchise most of those before next March, the firm's fiscal year-end.

The same strategy applies to the 70 or so Big O franchises under TBC control, he said, "but we won't get out fully this year." TBC has sold "seven or eight and has four to five more pending," he added. Independent franchisees operate more than 360 Big O locations in 20 states, predominantly in states west of the Mississippi.

There also are 29 franchised locations in Saskatchewan. To elevate interest in the Big O franchise system, TBC has revamped its website—www.bigofranchise.com—with considerably more information about the program and including video testimonials from several of the system's more successful franchisees. Those include Kevin Brooks, who owns eight stores in Colorado; Bruce Cherry, a 32-year Big O veteran with six stores in California; Greg Kimberlin, who owns two stores in Kentucky; Bill Walker, who owns two stores in southern Indiana; and Tony Williams, a former Bridgestone Retail store manager who opened his first Big O store in Mesa, Ariz., three years ago and now owns seven stores. "The goal was to have a more content-rich site,"

Mr. Ketchem said, with more content, better search engine optimization and more blog posting. In terms of recruiting, Mr. Ketchem said TBC is seeing increased interest from people outside the automotive industry—those "who are coming from corporate backgrounds or who were self-employed in another field." This is a change from years past, he said, when historically both Big O and Midas recruited people "who came up through tire or auto service fields.... We're seeing fewer of those types today," he said.

"Big O is appealing to those with business backgrounds who can see the opportunity available."

TBC also continues to look at converting existing dealers to its Big O system, with incentives for remodeling, sign conversion, etc. available, Mr. Ketchem said. Recently the company has seen a few instances where converting to Big O was an exit strategy for some dealers looking to retire or exit the business. Last year TBC offered to waive the $30,000 Big O franchise fee for qualified veterans of the U.S. Armed Forces, but thus far it has generated only limited interest in the "Vet Fran" program.

Mr. Ketchem said TBC will continue to explore this avenue, but the realization is young veterans often face difficulties coming up with sufficient operating capital to get a business started, even with the waiving of franchisee fees. A worksheet on the bigofran-chise.com site shows TBC recommends interested parties have $100,000 in liquid capital, a net worth of $300,000 and the ability to invest at least $225,000 to get started.

Big O stores average about $1.65 million in annual sales, according to information on the program's website. TBC Retail's franchise business encompasses nearly 1,850 locations in the U.S., Canada and Mexico spread among the company's brands, including nearly 1,400 franchised, licensed and company-owned Midas-brand stores and 160 SpeeDee Oil Change & Auto Service stores in the U.S. and Mexico. The incentive program being offered applies to locations opened on or after Feb. 1, 2013.

The franchise agreement must be signed by March 31, 2014, and the store must be opened by March 31, 2015. Mr. Ketchem, who joined TBC in April 2008 as financial and operations consultant for Big O, has experience on several levels, having operated his own furniture franchise stores and having worked in the financial end as well.

As for "carma," the Big O advertising campaign that started a few months ago is the work of Blakely Advertising, which has worked with Big O for several years.

The new campaign builds on Big O's long-standing "The Team You Trust" tagline. It features "Randy," the fictional Big O technician, who says, "At Big O we install more than just tires, brakes and oil. We install good 'CARMA.'"

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