Studying the history of franchise companies is interesting is watching all the ways they grew and all the partnerships, vendors and mergers along the way. It is a myriad of deals and team building, which makes it all possible. Continuing Part III of the saga: Mr. Winslow offered to buy an Oil Change Company out of Tampa Florida, a franchise system, with only three franchisees, one of which was in a market we also serviced with our Car Wash Guys Franchise in Jacksonville, FL. The Jacksonville franchisee of the Mister Mobile On-site Oil Change Company was not doing so hot and we knew we could fix that, since we had tons of contacts there and were already kicking the crap out of our competition FleetWash in Gainesville, Tallahassee and Jacksonville. We figured we could buy the company, hire back the founder in Tampa for training and fix the customer base issue in Jacksonville. Unfortunately the founder of that company Mister Mobile On-site Oil Company, Dave Hendelson, did not want to work anymore and wanted to retire and coming to terms on the price of the franchise system was another issue. Meanwhile we learned that the Owner of the Tampa Franchise On-Site Oil Change was a former franchisee who never paid royalties and the former Franchisor who went out of business was suing him for stealing the proprietary rights of the system. So defending that lawsuit would have to be figured into the price as well as taking over many leased vehicles which were financed by sleazy leasing companies and had left the owner upside down in payment to value ratios. A prefect scenario ruined by litigation and bad fiscal policy. Mr. Winslow was getting a little upset at this point as many of the current franchisees of Car Wash Guys, www.carwashguys.com were asking to add on these services. Lance was determined not to give up knowing the market potential and also studying the needs of future Hydrogen Cell and Electric Hybrid Cars, which would be needing other services such as special filters, capacitors and carbon tipped injector nozzles, which are wearable parts too. Knowing this Lance contacted Oil Butler for a possible acquisition only to find out that they knew what their company was worth and would only be interested in the case of a large sum proposal. They were right not to want to sell as they were doing quite well in that market indeed. In fact as he learned more, Mr. Winslow became more excited at the potential and lack of organized competition. Many of the original Oil Butler Franchisees had gone out of business. Which was typical of low cost franchises were the buyers did not take the businesses as seriously due to the small investment. Such issues were prevalent during the high-flying 90's with other companies such as Decorating Den. But Oil Butler had an extremely good program. Oil Butler had a good deal for a franchisee who wanted to save a little money and get into their own business, with dedication it works. Oil Butler is such a low cost franchise it is a very low risk opportunity for many people and we actually recommend it for those who cannot afford our franchise. Lance then contacted Location Lube who offered to customize their units to Oil Change Guys Corporate Yellow and put on our insignia. Also with this deal they would guarantee financing and training all for about 30% mark-up. However Mr. Winslow was concerned because Location Lube had their own brand and any innovations such as patented oil additives, customization or marketing techniques would be given to all the Location Lube "Biz Op" customers and thus fall into competitors hands. Lance was also worried that the Location Lube website had earnings claims on it that could not be substantiated and therefore for a franchise company it might be considered a violation of FTC laws, and by that time Mr. Winslow had, had just about enough BS from that agency. Location Lube did not have to follow franchise law as they were a Business Opportunity and under a different set of laws entirely. Still looking for the perfect partner and determined to either find them or build his own franchise system to co-brand with Mr. Winslow's current one, he scheduled a meeting near the Dallas Airport in Irving Texas with George of Mobile Pitstop. Mobile Pitstop seemed to have everything Lance needed to fulfill his vision and help the synergies of the market by bundling all the mobile auto and fleet services into one giant and un beatable team. Unfortunately when George came to meet Lance, George's first comment offended Lance's wife. Mr. Winslow was willing to over look the comment provided George could deliver. During the meeting Lance got the feeling that the oil additive "Oil Extreme" was not only over priced but was typically sold the same way Rockefeller's dad sold his snake oil and during the entire meeting Lance could not get out of his head the comment George made as it was demeaning to all women. Lance kept thinking back to the Rockefeller Biography and Rockefeller's dad who kept two wives. To top it all off George refused to discuss the possibilities of The Oil Change Guys using anything but Oil Extreme, which costs nearly triple the price of any oil on the market and in many case five times the amount. Understanding the consumer, Mr. Winslow realized that his franchisees would have little or no profit margin left if they only used Oil Extreme only, as some customers buy on price because oil changes are a necessity and not an impulse buy like his auto detailing franchise; The Detail Guys www.detailguys.com . George, at the all you can eat rib place, during lunch, flipped through a picture book as if he was trying to sign Lance up as an Amway Distributor. Lance was getting quite upset with the situation having driven 1600 miles from the East Coast to meet George half way in Texas with only three hours of sleep before the meeting. Mr. Winslow had driven the trip non-stop and got a ticket in one of those notorious Texas Speed Traps. Two-thirds the way through lunch George said that the service vans had to have the checker board design with large logos of Oil Extreme and could not be yellow. Lance was so upset he swore at George pounded on the table and announced the negotiations over, took back all of his information, including a gift of an out of print 1945 book "The Golden Age" By J. Paul Getty and told George, I will see you in the market place. Mr. Winslow wants to crush his competition. Most franchisors have competitiveness amongst their biggest traits. To be continued. . . |
