Aftermarket auto service landscape evolving

In the past six months, two prominent auto service franchise programs — Precision Tune Auto Care and SpeeDee Oil Change & Auto Service — have gotten new owners that have pledged to build these programs alongside their existing auto service businesses but have not discussed in detail how they plan to do so.

SpeeDee now belongs to Greenwood, Colo.-based Grease Monkey International L.L.C., considered one of the nation's largest independent franchisors of automotive fast-lube centers, with more than 220 locations in the U.S.

Grease Monkey President and CEO John B. Adams, a former TBC Corp. executive, said in February that his company's team is "eager to begin working with franchisees to leverage current relationships, further establish the brand in existing markets and expand horizons in areas yet to be explored."

Since then, however, Grease Monkey hasn't commented publicly about its plans for the SpeeDee program and didn't reply to Tire Business' inquiries for comment.

The SpeeDee network comprises 100-plus franchised SpeeDee-branded shops across the U.S., predominantly in California, Texas, the Gulf Coast, the Mid-Atlantic and New England. Grease Monkey acquired the business from TBC, which had acquired it in 2012 as part of its $310 million purchase of Midas Inc.

The Precison Tune Auto Care franchise program — comprising more than 250 Precision Tune-branded retail locations throughout the U.S. — is now administered by Icahn Enterprises L.P., the company that oversees the 1,000-outlet-strong Pep Boys and AutoParts Plus network.

In June, Icahn Automotive Group CEO Daniel Ninivaggi said the acquisition of Precision Auto Care Inc. is the "next step in building out our national automotive service network," but has declined to discuss in more detail his firm's plans for the Precision Tune network.

In general, Icahn Enterprises said it plans to continue using the Precision Tune name for the acquired stores and is looking forward to working with the franchise owners to grow the brand.

The $37 million deal closed July 31.

Of the 250-plus U.S. Precision Tune locations, 43 are owned by the franchisor. There also are approximately 65 more locations outside the U.S., including five in Mexico.

Investment opportunity

In addition, ownership of Express Oil Change & Tire Engineers went from one private equity to another, with Golden Gate Capital of San Francisco buying majority ownership from Carousel Capital of Charlotte, N.C.

Express Oil remains headquartered in Birmingham, Ala., and led by its current management team, including CEO Ricky Brooks.

Commenting on its reasons for investing in Express Oil, Golden Gate Capital Managing Director Josh Cohen said: "Express Oil is differentiated by its relentless focus on the customer, including the utmost integrity in every interaction."

Josh Olshansky, a managing director at Golden Gate Capital, said his company had been evaluating investment opportunities in the automotive aftermarket space for several years before committing to Express Oil, which he said has a "leading automotive service platform with an excellent management team, strong service culture and proven operating model."

One of the fastest-growing auto service franchises of late has been the AAMCO Total Car Care business, which has been adding a range of automotive services to the business the past few years, lessening the chain's dependency on transmission repair as the primary revenue driver.

That transition, reflected in the addition of "Total Car Care" to the brand's identity, broadened the service portfolio to include brakes, oil changes, heat and air conditioning.

That evolution could include a move to start stocking tires, according to a recent blog posting on the franchisor's website.

Recently AAMCO launched an initiative to "win the Internet" through a series of marketing efforts, introduced a revamped financing program for consumers and added a new POS system for franchisees.

Combined, these have delivered to the AAMCO franchisee multiple revenue streams and the ability to out-compete auto repair chains in their markets, the company said.

The AAMCO Car Care Center network grew by 21 locations in 2016, and earlier this year franchisor AAMCO International Inc. said it had as many as 68 more in the queue for 2017.

The growth last year pushed the AAMCO network to nearly 650 centers across North America. The expansion of the franchise network was coupled with sales growth. Horsham, Pa.-based AAMCO noted earlier this year that the average sales volume per outlet grew 4.1 percent last year over 2015 to $669,607, based in part on the initiation of a consumer financing program that gives customers access to multiple lenders through one credit application.