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Old 07-09-2009, 06:07 PM   #1
XDCX
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Default Midas solicits OLDCO Dealers for Service Franchise

Midas has taken the initiative to solicit OLDCO Dealers to see if they have an interest in re-branding their service departments as Midas stores.

A story in Automotive News reported that Midas has a $30K Franchise Fee for a 20 year license and they collect 10% of revenues. (5% to the corporation and 5% for local/national advertising.)

It's an interesting idea. I don't know much about franchise fees, but 10% of gross revenues seemed like a lot to me.

That said, I'd rather have 90% of something than 100% of nothing - especially since many dealers have reported that it's difficult to keep the Service Department operational once you've lost your OEM.

Here's a link to the Midas Franchise Website - click here
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Old 07-10-2009, 07:28 AM   #2
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What's next? A NAPA parts department in a dealership? Oh wait, that was the idea behind Lithia's L2. We all know how that turned out.
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Old 07-10-2009, 07:31 AM   #3
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Thats exactly right! NAPA has already been here begging us to be a "NAPA Dealer"!
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Old 07-10-2009, 08:12 AM   #4
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Thats exactly right! NAPA has already been here begging us to be a "NAPA Dealer"!
That's interesting - does the deal make any sense?

For an OLDCO dealer who still wanted to keep his Service Department active having an in-house NAPA store might make sense.
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Old 07-10-2009, 09:32 AM   #5
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What's next? A NAPA parts department in a dealership? Oh wait, that was the idea behind Lithia's L2. We all know how that turned out.
Was that really part of the L2 vision?

Any idea how the L2 store in Colorado is doing? Didn't they try to transition to an inexpensive car format with most of their inventory selling for $10K or less?
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Old 07-10-2009, 10:38 AM   #6
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Yes, sir. The parts departments were managed by NAPA (it may have switched to Pep Boys at some point). No Lithia employees.

The Colorado store is dead in the water. So are many of the others (with the exception of Boise which was a well establish used car outlet before the transition). The last time I was by it, the store was "open" with five cars on the lot. It was NOT executed well, starting with the name and ending with the training of the personnel. It was like going to a Taco Bell to buy a car. Inexperienced teenagers with no guidance trying to sell me a bean burrito. Not a good combination.

The transition to the 10K or less format was a way to keep the store going while the store was on the market due to some misc. financial obligations that had to be met. I care not to share anymore.
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Old 07-10-2009, 03:37 PM   #7
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Yes, sir. The parts departments were managed by NAPA (it may have switched to Pep Boys at some point). No Lithia employees.
Wow, I had read a lot about L2 and never knew that.

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Originally Posted by SHACOS View Post
The transition to the 10K or less format was a way to keep the store going while the store was on the market due to some misc. financial obligations that had to be met. I care not to share anymore.
Interesting, I noticed that the two L2 stores in Texas are still on the Lithia website and show inventory for sale even though the local media's reported they were closed.

Some of the vehicle photos show a lone car sitting in an otherwise empty lot - not an inspiring picture if you're trying to convey stability to your customers.

In fairness to Lithia, L2 may have worked if it were launched at a different time.
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Old 07-10-2009, 06:59 PM   #8
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You're such a politician.
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Old 07-10-2009, 09:39 PM   #9
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You're such a politician.
Tell that to Landry, LaSorda and Press.... It's not like I'm always a nice guy.

And besides, there's a member here with a Lithia IP Address that surfs the site almost every day but never posts anything. Maybe he'll read this thread and make his very first post?
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Old 07-20-2009, 10:50 AM   #10
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Default Napa

I have switched to NAPA and thus far it has been a great move for my Dodge store
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Old 07-20-2009, 11:44 AM   #11
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I have switched to NAPA and thus far it has been a great move for my Dodge store
First post - Welcome to the forum.

If you don't mind sharing the information, there's a post in the Parts portion of the Independent Section that asks about NAPA's program.

I'm just curious what their franchise fees are and how easy it is to transition from being a Mopar parts dealer to a NAPA parts dealer?
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Old 07-20-2009, 07:30 PM   #12
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Default Midas or Meineke

Visited by Meineke today. Their deal is basically $15k and they give you EconoLube at no charge if you want it. They are doing a special deal for OldCo dealers when it comes to % back royalty. I am rural, and there is nothing out here so my thought is that with the traffic passing by each day I get a small percentage because of having been a NEW car dealer and perceived as overpriced for 'normal' repair work. Meineke would give me a shot at the percentage I dont get and anything would be an improvement and suplant my loss of warranty and service contract work. Closest Midas or Pep Boy, etc is 15 miles in any direction. I think it to be a win win in my case.
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Old 07-21-2009, 07:26 AM   #13
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Visited by Meineke today. Their deal is basically $15k and they give you EconoLube at no charge if you want it. They are doing a special deal for OldCo dealers when it comes to % back royalty. I am rural, and there is nothing out here so my thought is that with the traffic passing by each day I get a small percentage because of having been a NEW car dealer and perceived as overpriced for 'normal' repair work. Meineke would give me a shot at the percentage I dont get and anything would be an improvement and suplant my loss of warranty and service contract work. Closest Midas or Pep Boy, etc is 15 miles in any direction. I think it to be a win win in my case.
That's interesting, I like your thought process.

Will Meineke allow you to keep a Used Car sales operation at the same location or would you have to move the used cars to a different location?
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Old 07-21-2009, 07:44 AM   #14
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Default Meineke

Not only can I keep my used cars on same location but I can keep my Valvoline Instant Oil Change facility. Hopefull all goes well and I can be up and running in 30 to 45 days.

I believe dealers from OldCo should take a look at this because it all starts with service. Especially with the lack of profit New vehicle generate in this type of market. My absorption is generally over 75% and hopefully this can drive it up another 10% at minimum.
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Old 07-21-2009, 08:20 AM   #15
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Not only can I keep my used cars on same location but I can keep my Valvoline Instant Oil Change facility. Hopefull all goes well and I can be up and running in 30 to 45 days.

I believe dealers from OldCo should take a look at this because it all starts with service. Especially with the lack of profit New vehicle generate in this type of market. My absorption is generally over 75% and hopefully this can drive it up another 10% at minimum.
Thanks for the update - that does seem like a good option for OLDCO dealers who want to keep an existing service operation.
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