The Car-X locations are owned and operated by 32 independent franchisees, Monro said, and the stores are similar in volume and sales mix to the Monro Muffler Brake & Service stores — roughly $925,000 in annual sales, split 44/56 tires/auto service and parts.
Car-X franchisees operate in Illinois, Indiana, Iowa, Kentucky, Minnesota, Missouri, Ohio, Tennessee, Texas and Wisconsin. Of these, Iowa, Minnesota and Texas are new territories for Monro.
From the franchisees' point of view, the deal is seen as “very positive in the short run,” according to franchisee Brex Inc.'s Mr. Isabell.
The change in owners “will create new opportunities for the franchisees,” he told Tire Business. “The key opportunity here is to be able to take advantage of Monro's vendor relationships,…which should create margin benefits for Car-X franchisees.”
In the initial stages following the purchase announcement, Mr. Isabell said Monro has been “very professional in the way they've approached Car-X.”
The franchisees are keen to tap into Monro's tire knowledge and expertise, he said.
Under Tuffy's ownership, individual franchisees were left to develop tire programs on their own, Mr. Isabell said, and to explore direct purchasing options.
Mr. Isabell said the Car-X franchisees collectively are comfortable with the selection of Mr. Hoornbeck to head up the franchise system business, pointing to his wealth of experience, especially in financial matters, and his optimistic, positive approach.
Asked whether he thought Monro would seek to expand the Car-X network, Mr. Isabell said: “(Monro) is not a complacement group of people. They're quite aggressive. Got to believe they'll support growth.”
Monro and Tuffy Associates had dealt with one another before. In 2012 Monro bought 17 corporate-owned Tuffy Auto Service Centers stores in Wisconsin and South Carolina, which it converted to Monro Muffler and TreadQuarters outlets, respectively.
Monro said recently its growth strategy could accommodate up to 1,300 tire stores and 1,300 service stores in its 25-state operating area.
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