Bumper-to-bumper auto care - franchising

Nation's Business, Oct, 1991 by Meg Whittemore

Rather than take on new-car payments, many budget-conscious Americans are spending their automobile dollars on service and repairs to keep their old cars running. And many franchised companies are helping those motorists maintain their aging vehicles--without emptying their wallets.

Franchises now offer almost all aspects of car repair and service, including quick oil changes, tuneups, body repairs, tire replacement, repainting, rustproofing, washing and detailing, and repair or replacement of windshields, other glass, exhaust systems, and even complete engines.

All told, the franchised auto-aftermarket industry--in franchising, that means parts, repairs, and maintenance for cars, pickups, and vans not serviced by dealers--rang up $13.8 billion in sales in 1990. Sales this year are expected to exceed $15.4 billion, according to the Franchise Opportunities Guide, published by the International Franchise Association, in Washington, D.C.

Mike and Karen Klaubert, a husband-and-wife-team operating SpeeDee Oil Change & Tune-Up franchises, are representative of the growing number of entrepreneurs who saw a niche and filled it.

In their native New Hampshire in the mid-1980s, "there were few places out there for people to get quick, convenient maintenance work done on their cars," says Mike Klaubert. "We saw the opportunity, and we jumped on it."

The Klauberts opened their first SpeeDee franchise in 1987 in Concord and their second a year later in Laconia, about 30 miles away. They brok even during their first year of operation. Combined gross sales for both locations increased 32 percent from 1988 to 1990.

SpeeDee, headquartered in Metairie, La., carries a start-up cost of $68,000 to $327,000, depending on whether the equipment is leased or purchased. The amount does not reflect real-estate costs.

Mike's 11 years of experience as an automotive technician and service manager for a car dealership helped the two franchises succeed. "There are a lot of things [in car servicing] that go on that aren't related to an oil change or a tuneup," says Klaubert. "With my background, I can at least tell the customer what the problem is and where to go for help. It adds to our stores' credibility tremendously."

Mike Klaubert handles business operations, and Karen oversees the office and financial record keeping. Says Mike: "I think it is the perfect setup for this business. There is no way either one of us could run the shops alone. It really does take two people."

A typical oil change costs $23.95. Tuneups range from $49.95 for a 4-cylinder vehicle to $69.95 for an 8-cylinder car or truck.

The characteristics that make SpeeDee attractive to customers--the convenience of drive-in scheduling, reasonable prices, and customer service--are common throughout the auto-aftermarket segment of franchising.

"Service is becoming the business operating buzzword of the 1990s," says Nevil Hermer, president of Speedy Auto Glass, a franchise that specializes in automobile windshield and glass repairs and replacement.

Established in 1946 and based in Mercer Island, Wash., Speedy Auto Glass has 20 U.S. franchises, and last year their total sales reached $18 million. The company's expansion plans include the conversion of independent glass-replacement businesses into Speedy Auto Glass franchises. "We provide independent glass shops with national buying power, market economies of scale, and training," says Hermer.

A new-site franchise costs $134,000 to $293,000, depending on location. Conversion franchises cost $16,000 to $35,000, depending on the extent of site alterations.

For drivers whose cars have collision damage or are worn from age, MAACO Auto Painting and Bodyworks stands ready to repair and repaint. Founded in 1972 and headquartered in King of Prusia, Pa., MAACO has 420 franchises throughout the United States. Gross sales in 1990 were $270 million. MAACO repairs or repaints more than 500,000 cars annually. An average repair bill is $500; paint jobs range from $120 to $700.

If you need a new car engine, you could turn to Motorworks Remanufactured Engine Installation Centers, a Philadelphia-based franchise. Motorworks is the brainchild of Joseph Robinson, who has worked on einges as a hobby and a career as well as during his service in the U.S. Navy. "I saw the demand for both remanufactured engines and their attendant installation services growing incredibly," he says, "and I knew that it was not being met in an organized or systematic way by anyone else."

Motorworks installs nationally warranted remanufactured engines in cars, light trucks, recreational vehicles, fleet vehicles, and boats--usually at a cost about one-tenth the price of a new vehicle or boat.

An engine replacement and installation job costs an average of $2,000.

A remanufactured engine is different from a rebuilt engine. In a rebuilt engine, typically only the worn-out parts are replaced. Remanufacturing involves several machining and testing operations that restore the engine to factory specifications.