06 Franchise Shop

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Table of Contents

Industry Overview & Trends

When entering the automotive service industry, there are many different shop types to choose from. This course covers six shop types to help inform a person entering into the industry the strengths and weaknesses of each type. Those that plan to enter the industry should do the research and choose a career path that best matches their personal strengths, weaknesses, and expectations.

The US automotive repair and maintenance industry is huge with combined annual revenue of about $115 billion and about 160,000 service locations. Approximately 8,500 (5.3% market share) of the locations are franchises.

Organizational Chart

Overview

While this lesson will focus on the franchise model, it also includes the company-owned model. These two models are virtually identical except for the upper management as shown in the two charts below.

Franchise Model

1. The local franchise owner may, or may not, have any significant experience in the industry.
2. The local franchise owner may have multiple locations (typically in the same geographical area).
3. Most franchises have a manager that runs each location on a daily basis.
4. The front end staff will be determined by the type of franchise and the size of the operation.
5. The back end staff will be determined by the type of franchise and the size of the operation.

Company-Owned Model

1. In the company-owned model, almost all business decisions and policies are made at the corporate level. Based on the size of the franchise (mainly the number of locations) the corporate group can become rather large and somewhat bureaucratic.
2. In the company-owned model, the local franchise owner is replaced by a local manager.
3. The front end staff will be determined by the type of franchise and the size of the operation.
4. The back end staff will be determined by the type of franchise and the size of the operation.

Major Automotive Franchise Locations

Company	Type of Services	Franchises	Company Owned
Valvoline Instant Oil Change	Quick Service	817	756
Jiffy Lube International	Quick Service	1842	165
Big O Tires	Tire / Service	434	32
Grease Monkey	Quick Service	194	246
Midas International	Auto Repair	973	0
Tuffy Tire & Auto Service	Tire / Service	117	46
AAMCO Transmission	Transmissions	549	10
Christian Brothers	Auto Repair	253	0
Precision Tune	Auto Repair	189	48
SpeeDee Oil Change	Quick Service	89	11
Take 5 Oil Change	Quick Service	173	558
Meineke Car Care Centers	Quick Service	700	0

Training Program

With the franchise and company-owned model, the work and services performed are very specific which makes technician training much easier. Most franchises deliver in-house training for the front-end staff and back-end staff.

Some of the points that should be addressed when evaluating a shop as a potential employer.

Training Plan

• Does the potential employer have a plan (preferably written) on how to keep the shop’s technicians trained on emerging technologies?
• It is ultimately the shop owner’s responsibility to set the policy on training and a serious commitment to ongoing training should be in a written training plan.

Training Budget / Funding

• Does the shop have a plan to fund upgrade training?
• What costs is the shop willing to pay for?
  • The cost to enroll in the training
  • The cost to travel to attend the training
  • The lost wages while a tech attends training

Fringe Benefits

Fringe benefits in the automotive service industry shouldn’t be much different than other responsible employers in the technical services industry. In reality, the automotive repair industry is in competition with more than just the other shop down the street. They are ultimately competing with other transportation and service-related careers such as:

• Heavy Equipment / Diesel Technician
• Aircraft Mechanic
• Wind Turbine Technician
• Industrial Machinery Mechanic