Editorial

Name Recognition and Stability

Featured Franchise

The year is 1963. Sandy Koufax pitches for the Dodgers. Roger Staubach quarterbacks Navy. Filet Mignon? $1.98 per pound.

AAMCO 1963 On the business front, Robert Morgan Franchises the first AAMCO Transmission center - a move that creates what will become the $148 billion automotive aftermarket industry. Morgan and his partner evaluated and executed every element of AAMCO’s growth with great care. They personally prepared the initial Franchise package and contract, the production of the first AAMCO marketing analyses, brochures and advertising materials. They even developed the universally recognized tagline, "Double A-beep,beep-MCO."

AAMCO Today Driven by his vision, Robert Morgan turned his concept into a company that has become a household name, today recognized by more than 90% o the motoring public. By finding the right niche and creating the right formula, Morgan enabled thousands of others to also fulfill the American dream, namely one of personal independence and financial freedom.

Gary Haslip of Eugene, Oregon began his career with AAMCO only a few years after that first franchise center opened. "In March of 1967, my wife and I moved with our Dalmatian and a small camper from Minnesota. I loved working on transmissions and started out in the shop of an AAMCO center I later came to own. A second shop was purchased in less than a year," recalls Haslip. Haslip now owns five centers in three states, and has extended his passion for automobiles into restoring classic sports cars.

Today, AAMCO remains one a great franchise opportunity. "Our typical franchise candidate is now coming out of middle or upper level management and in their early to mid-forties," says Bob Castellani, AAMCO Director of Franchise Development. AAMCO was recently ranked the fourth best franchise in the United States. The ranking, which was compiled by Makovsky & Co., a leading communications and market research firm using data secured from franchise researcher Frandata, is based on a combination of factors including: total years in existence (35 or more); number of franchise units (250 or more); and an initial investment equal to or less than $200,000.

Under the watchful eye of and capable leadership of Keith Morgan, Robert’s son and CEO since 1992, AAMCO continues to be one of the nation’s most recognized brands, known for its automotive technical expertise, superior customer service, dedication to its franchisees, and innovative use of celebrity advertising.

A Proven Success... and Still Growing

AAMCO Tech Since 1963, AAMCO has attracted hundreds of business-minded professionals and entrepreneurs from all walks of life as it carefully built the infrastructure to support franchisee success. That infrastructure includes everything from assistance with site selection and lease negotiation to training to ongoing assistance in operations, technical services, and advertising.

Add to this AAMCO’s Operator’s School, Customer Service Manager School and the unique Second Generation School, which is another testament to the longevity of AAMCO’s success. The AAMCO Second Generation School was created for adult sons and daughters (and husbands and wives) of current AAMCO dealers. The special school is designed to award "life experience credits" to its attendees for the time they have already spent in on-the-job training in their parents’ or spouses’ stores.

Today, over fifty AAMCO centers are owned and operated by second generation AAMCO dealers. One Second Generation School attendee after the other speaks of the desire to see the legacy of both their family’s business ownership and of AAMCO continuing. Many see this as only the beginning of passing AAMCO center ownership from generation to generation. Paul Quirk, whose father had been an AAMCO franchise owner for ten years when Paul attended the school in 1994, calls the AAMCO Second Generation School "truly the smartest move that AAMCO’s ever made, and the greatest thing I’ve ever been involved in." Prior to the school Quirk worked both as a Customer Service Manager and as a Master Technician in his father’s center. He has since gone on to run a model AAMCO center and is now a member of the AAMCO Pinnacle Club, the club honoring AAMCO’s most outstanding dealers.

AAMCO has proven to be more than just stable. System-wide revenues have grown 48% dring the last five years. During the first nine months of 1999, system-wide revenues increased 7.1% t $344 million, compared with $321 million for the same period in 1998.

New President, New Initiatives

Driving this year’s performance is a number of initiatives headed up by Mark Wurth, who joined the company in February as President and Chief Operating Officer. Wurth was previously with AAMCO from 1977 to 1988, first in sales management and culminating as Vice President of Operations. CEO Morgan brought in Wurth to help drive AAMCO’s focus on meeting the needs of its customers, employees and its franchisees. Together, Morgan and Wurth launched the a number of programs designed to increase market share and add value to AAMCO customers. Among those initiatives are:

New National Warranty Program - AAMCO now offers the most comprehensive coverage in the transmission repair industry, from a basic warranty on a minor service to lifetime coverage for an automatic transmission. The new warranty program has proven to be extremely popular with consumers.

National Advertising Campaign - AAMCO continues its long history of celebrity advertising, using popular spokesman James Brolin. For the first time in its 36-year history, AAMCO has begun advertising a national toll-free number - 1-800-GO-AAMCO - which connects callers directly to any of the 700-plus AAMCO centers. Both 1-800-GO-AAMCO and www.aamco.com are prominently featured in the new campaign.

NASCAR Sponsorship - AAMCO and Exxon Superflo teamed up to sponsor a NASCAR racecar for the 1999 season. The car carries the new 1-800-GO-AAMCO national phone number emblazoned across its tail section.

Job Corps Technical Training Program - AAMCO entered into an agreement with the U.S. Department of Labor to create the AAMCO Job Corps Program, an advanced transmission training program for youths ages 16 to 24. The program finds young people who want to learn a trade and will be hard-working employees once given an opportunity and matches them with a job in an AAMCO center. A special new AAMCO training facility in Edison, New Jersey was recently completed, and students from across the country have begun the program at the new facility.

Preventive Maintenance Program - AAMCO has begun offering a new preventive maintenance service for automatic transmissions. The new AAMCO Power Purge Service, currently in test in select New England cities, includes a comprehensive road test to gauge transmission performance and replacement of 100% o the old transmission fluid with clean fresh fluid. Market research indicated a large number of consumers overlook regular transmission maintenance, which can lead to premature transmission failure. By offering this service, AAMCO is establishing relationships with customers so they consider AAMCO for their future transmission needs.

AAMCO is the world’s largest chain of transmission specialists, with more than 700 franchise locations in the United States and Canada. AAMCO centers have served more than 20 million customers.