Editorial

Who can profit from the auto aftercare market? YOU!

Own a 1-800-Radiator <a href='http://www.bison.com' style='font-weight:normal;'>Franchise</a> - the only radiator <a href='http://www.bison.com/Repair_Franchises' style='font-weight:normal;'>Repair franchise</a> on the planet!

If marketing is all about supply and demand, then it is helpful to discuss a few important numbers. For example, did you know that there are 700 different auto/light truck radiator models? Even the largest auto repair shop is not going to keep that many parts in stock and as for the smaller shops – forget about it. So what do they do when they need to replace a radiator? The shop manager calls around until he finds someone with the right model and has it shipped. Meanwhile, he waits. The car owner waits. The car sits in the repair shop lot taking up space. That waiting is a lose-lose situation for the both the repair shop and the car owner. And that’s why so many automotive centers are now doing business with 1-800-Radiator, a franchised business right in their area with a quick, two-hour delivery.

For Mike Rippey, CEO of 1-800-Radiator, it is all about the numbers: “There are 220 million autos and light trucks in the U.S. today and a radiator will last 80,000 to 100,000 miles. That number decreases if you live in a warm area and use the air conditioner excessively or if you use your car to tow a boat. And, of course, if the car is in a crash.” It all adds up to about six million radiators replaced in the U.S. last year.

“Our business is driven by superior customer service,” says Rippey. “We keep the parts in stock and our buying power allows us to sell them at a good price. Our quick delivery means that no one has to wait and wait for the part to be delivered. Best of all, our owner-operator has a stake in seeing his business succeed and will respond to each request with speed and professionalism.”

The Benicia, California company has 57 locations, 36 of which are owned by franchisees. “We have 21 corporate locations but will be converting these to franchisee-owned locations,” says Rippey. “We’ve found that our franchised locations simply do better.” Back to the numbers, Rippey says they see room for 250 1-800-Radiator locations in the U.S. which gives each location a territory of 1.2 million people, or 800,000 automobiles.

The business model is built on streamlined efficiency. “We want to get as much done by our system as possible so the franchisee can spend more time out in the field,” says Rippey. The franchisee will have a warehouse stocked with a strategic mix of radiators. “The mix is important,” says Rippey, “because people drive different cars in different areas. For example, on the coasts you will find a majority of Japanese and import cars while in places like Texas, they drive primarily Chevy pick-ups and SUVs.”

Because radiators are not large, the warehouse size is relative small – about 2,000 sq. ft. A location will need two delivery drivers and a person who takes the phone calls and is also the warehouse manager. The owner’s main responsibility is to network by making quick visits to all potential customers.

“This is not a hard-sell type of job,” says Rippey. The point we make on the calls is that we have what they need in stock, at a great price, and that we deliver in two hours. We leave a sticker with our phone number and, the next time their current supplier is out of a part, they call us. Once we show them how easy it is to work with us, they become a steady customer.”

In addition to B2B sales, a franchisee will have retail sales with do-it-yourselfers who find them through yellow page ads and will also generate sales through a strong corporate internet presence.

A computer system with custom software does a lot of the work for the franchisee. He can input the year, make and engine size of the car and the computer will tell him the model number and price of the radiator. “You don’t need to have an automobile background,” says Rippey. “You won’t be installing the parts and the brand new and boxed radiators only weight about 15 pounds each. Franchisees – male or female – can run this business without any automotive experience. It’s a great way to get in on the massive auto aftercare market and to find your own very successful niche in this industry.”

The benefits to the franchisee are many. You only need a small warehouse in an industrial area and you work normal business hours with a small staff. The corporate office keeps track of product sold and helps you maintain your product mix.

Because of the purchasing power of the 1-800-Radiator system, you will have parts at a significant savings. “We provide OEM parts as well as imported product,” says Rippey, “but only when the quality is equal to the original. We have a lot of clout with manufacturers because of the volume we purchase and we reap the benefits of both price and customer service. We also provide a lifetime guarantee on all our radiators.”

1-800-Radiator has been around for years and is dominating the radiator market. Rippey plans to add about 30 new franchisees in 2006 and another 50-60 in 2007. Since corporate growth is limited due to the generous, protected territories, future growth for the company will come by adding new products to the radiator line. “I believe we could easily add parts such as compressors, dryers, starters and alternators,” says Rippey, “which will help us grow and also increase the franchisees’ profits.”

A week of training is provided at the corporate location and continues when two trainers spend a week at the franchisee’s location. Beyond that, a district manager will make monthly visits for the first year and quarterly visits thereafter. “We’ve only been Franchising for several years,” says Ripper, “but we haven’t had a franchisee fail. We are seeing great success with our franchisees and we plan to keep them as happy as they are now.”

As for the “ideal” franchisee for 1-800-Radiator, Rippey says that “motivation is everything. They need no automotive or sales experience but must have a strong desire to grow their own business. We sold over 500,000 radiators in 2005 – the potential in this business is huge.”