Automotive Franchises - Who's in the Driver's Seat? - Part 1
Americans love their cars - all 200+ million of them. Car owners willingly spend billions to keep those wheels turning, but who has the time to leave their cars in the shop for a few days? Opportunities are plentiful for mobile services that can get drivers back on the road in a hurry. In this issue we speak with Jeff Richards from Altracolor and Tom Marks from Pop-A-Lock to get their views on what's driving the mobile service trend.

Altracolor makes cars look good for resale
Altracolor occupies a niche between the detail shop and the body shop, taking advantage of a huge market by offering mobile automotive paint touchup and spot repair services. There are over 120 million used vehicles on the road and about 80% of them need cosmetic improvements. Altracolor franchisees deal primarily with new car dealers, getting their used car inventories ready for resale, and making presale repairs on new cars. Altracolor President, Jeff Richards, says "We specialize in fixing the scuffs, gouges, scrapes, and scratches that make new cars look used."

The Altracolor system has been designed for maximum efficiency. "We supply our franchisees with approximately 800 factory packed colors packaged in small, 2 oz bottles," explains Richards. "Having premixed colors means the end product is always consistent. Our competitors don't have that luxury. They have to mix their own paints out in the field. That's not only time consuming, but there are all kinds of problems with quality control. Our mobile technicians simply look up the color code for the car they're working on and pull the matching bottle of paint."

It is an efficient system that pays off for franchisees. "An average job involves going around the vehicle and touching up all the small damage like little scratches, chips, and nicks in the paint. On a national basis, the price for that service is around $50-$60 per car. Our average franchisee can accomplish two cars in an hour, so you can do the math. There is some money to be made," Richards points out. "The other services are on a case-by-case basis. The price for fixing a bumper gouge, for example, starts around $125 and goes up from there depending on the severity of the problem. The charge for a scratch repair is based on the number of panels involved."

Wholesale customers profit from onsite service
Altracolor is strictly a B2B business. Richards says, "It is much simpler to deal on a wholesale level. We benefit from working in volume. You can go to a new car store and write up 8 or 10 or 14 cars, then stay right there in one spot to work on them. It is more efficient and profitable to do it that way than to move around, dealing with one retail customer at a time."

It is more efficient and profitable for the customers, too. "Most of the dealers we approach for new business are doing this work for themselves. A dealership usually has an onsite body shop. That might sound like they've got it all locked up, that the body shop can easily spiff up the used cars without any outside help. But it's not that simple," says Richards. "There is a body shop manager and a used car manager and the two have different goals. Each wants to amplify his dollar-per-unit. The used car guy has a finite space and a finite amount of money to populate those spaces. So when he loses a vehicle to the body shop for 3 or 4 days to get a little bumper corner fixed, that affects his cash flow and his turnover ratio. We can come in and fix that bumper corner for half the price and do it in 2 hours rather than a few days. This is a tremendous benefit for the used car manager who has his car back on the front line and possibly sold that afternoon. He can go to the auction tomorrow and replace it. It accelerates his cash flow and adds to the bottom line at the end of the month. Most of these managers get paid a percentage of the net profit so that obviously makes them happy."

Hands-on operators wanted
Right now, Altracolor has 150 operating units in 27 states. Richards says there is plenty of room for more. "Ideally, we would like to give to every one of our franchisees a territory with a minimum of 20 new car dealers. Obviously, there is a difference between a car dealer in Dallas with a used car lot that sells 200 used cars a month and a car dealer in Boise, Idaho that sells 10 used cars a month. So we take into account population density and the size of the used car lots run by new car dealers before we assign our territories. We want our franchisees to be successful and we are going to do whatever it takes to make sure that happens when we assign territories."

"We are somewhat unique in that we deal strictly with owner operators," Richards says. "We are not interested in area developers or absentee ownership or investor ownership. We want somebody who is looking to devote 100% of his time, energy, and effort to the operation of our system. Naturally, we encourage expansion and multisystem operators. But at the same time, we want somebody who knows what they're doing based on our training and personal experience making the repairs." Richards adds, "This is virtually a turnkey business. Just add a vehicle, and you're good to go as a mobile technician."

Contact Information: Jeff Richards, President, Altracolor, (800) 678-5220, info@altracolor.com, http://www.altracolor.com/

Pop-a-Lock gets stranded motorists back on the road
Sooner or later, every driver locks the keys in the car or gets stuck at the side of the road with a flat tire. When it happens to you, who you gonna call? 1-888-POP-OPEN is the national dispatch number for Pop-a-Lock, the world's largest door unlocking and roadside emergency service. "We have over 2,000 mobile technicians in the field," reports Pop-a-Lock CEO, Don Marks. "We cover 2,500 cities in 36 states and service about 100 million customers."

Pop-A-Lock was founded by two former law enforcement officers in Lafayette, Louisiana in 1991. They had been opening locked car doors as a public service the old fashioned way for years. But when vehicle locking and latching systems started to get sophisticated, they found the common methods like "Slim Jims" didn't work anymore. Worse, they were likely to damage the car. Still, the officers thought they had a good idea for a business and proceeded to do exhaustive vehicle research and invested in specialized tools that would work with the new locking technologies. The result was the Pop-A-Lock service. It caught on quickly and the company started franchising in 1995.

The service is operated 24 hours a day, 7 days a week. Marks says. "Day or night, when a customer calls the toll free number, the call is routed automatically to the local franchise operator. In almost all cases, we reach customers within half an hour. We can unlock a car in a matter of seconds or maybe a few minutes depending on the car. Or we'll fix a flat tire, give a jump-start if the battery is dead, or bring you gas. We are fast and we never close. And there's really no competition. The only alternative is to call a towing company or wait until the next day to call a locksmith."

Customer service is key
Marks says Pop-a-Lock is dedicated to customer service. "We'll never leave you stranded on the road. That is our company policy. If we discover that the car problem is a major one that we can't fix, we'll stand by until additional assistance can be rendered. In bad weather or late at night, customers appreciate that kind of reassurance," proclaims Marks.

Pop-A-Lock is also known for its Emergency Car Door Unlocking (EDU) Program. "We open cars for free if a life is threatened or a child is locked in the car," says Marks. "Those calls get first priority every time. So far, we have rescued over 50,000 children from locked vehicles. It's an important community service, which is why you will often find our number in the 911 section of the phone book along with the fire and police departments."

This is a retail business with the majority of Pop-A-Lock calls coming directly from the general public. But Marks says a significant percentage of business comes from referral services, "from mall security to bars." He adds, "We are also the largest service provider for road clubs like Allstate, Geiko, AAA, and Allstate. When your car is in trouble and you call GM, for example, you think it's GM. It's really not. The call has been routed through to us."

The biggest is getting bigger
Marks says the franchise is in the middle of expansion. "We really want to get to 90% of all the metro markets because we have a lot of big referral customers who need us in all states. About 70-80% of our franchisees own more than one unit. Those are mostly people in major metropolitan areas running them like the big businesses that they are. But, this could fit into the smallest market because the road clubs and national accounts need our services even in small communities. We have franchisees from very sophisticated business people to small town car door unlockers. We are just as interested in the small guys as we are in the big guys."

"What we want and what the big national accounts want is universality," continues Marks. "We want customers nationwide to recognize and rely on the technician driving up in the Pop-A-Lock car wearing his Pop-A-Lock uniform and badge. We want them to know that he's going to be there to help in half an hour and he's going to do a great job and they are going to be back on the road in 2 minutes."

Marks says the goal is for Pop-A-Lock to dominate the market. "We offer sustainable, strategic, competitive advantages. We consistently do what others can't and won't such as investing a great deal of money on consumer research. Based on that research, we have expansive training abilities and we know how our technicians should look from the uniforms to the security badges. And all of our marketing is guided by that research, too. That's why we are the largest provider to road clubs and the largest service of this kind anywhere in the world," asserts Mark.

Contact Information: Don Marks, CEO, Pop-A-Lock, (337)233-6211, donmarks@SystemForward.com, http://www.pop-a-lock.com/