Auto Service World
Feature   October 1, 2000   by CARS Magazine

Franchising Up Hill

SSGM: Murray, tell us a little about your business.HILL: It's definitely grown. I've got four bays. I've been here a year and a half. When I took over, the numbers for the first few months were pretty...

SSGM: Murray, tell us a little about your business.

HILL: It’s definitely grown. I’ve got four bays. I’ve been here a year and a half. When I took over, the numbers for the first few months were pretty poor, and in a year and a half, those numbers have gone up three, four times, and are steadily going up every month.

SSGM: What makes your operation so successful?

HILL: I do the job the first time, and the customers keep coming back. They’re not worried so much about a cheap price. They want a fair price, they want quality work and quality parts. You’ve got to take each customer and treat each of them ‘one-on-one’. You can’t just group them altogether.

SSGM: Do you draw locally from the residential subdivisions in the area?

HILL: Yes, quite a bit. I’ve still got some customers that have followed me. I’ve got customers from Oshawa and downtown Toronto. They’re used to somebody being honest with them, fixing their car right the first time, and as a result they don’t want to change – they’ll go out of their way. Being that I’m in a residential area, I’m debating on evening hours at this point. It means a lot more stress for me, but sometimes you have to change with your clientele.

SSGM: Tell me about your shop. I see you are an accredited Drive Clean Test and Repair facility, and you have one bay with an above-ground dyno.

HILL: Yes. There are times when I’d like to have that in-ground when I’d like to have that bay. Sometimes losing that bay for other work does hurt, but there are pros and cons to both the above and below ground, so I opted for the above ground. I’m running two licensed techs and a third year [apprentice] and I keep them busy most of the tine.

SSGM: How’s Drive Clean been? Are you able to make money with it?

HILL: As far as I’m concerned, the Drive Clean itself is not a big money-maker, but you have to use that business opportunity to build and expand on it. I opened as a new franchisee, [and] I felt that I had to get into [Drive Clean] as a drawing card for the new business. It’s turned out that most of the people that have come in for Drive Clean have also become regular customers, so it’s worked out well for me. I don’t use it as a quick money-maker. There are issues about Drive Clean that I’m sure you’re aware of. When my customers bring in their car for a Drive Clean inspection, it’s not just a Drive Clean inspection. We do a general inspection on the vehicle as well, so it’s not an in-and-out deal. I do make money that way. It is not a forced repair. It must be safe to go on the dyno. I will not jeopardize cars or employees.

SSGM: Tell me about the equipment that you have in your shop.

HILL: The oldest piece of equipment is about eight years. I find that’s the biggest thing that affects us right now: keeping up with the equipment. My scopes are eight years old. It’s basically out of date. I’ve got a lot of the handheld stuff to replace it with now, and I’m in the process looking at a new scope. They are down [in price] from when I first purchased them. The one I’ve got was a 60,000 dollar scope, and I can buy one now for 25, 30,000 dollars. But how many years before it’s obsolete? That’s the biggest problem now. You have to be very careful what you buy, or else it’s obsolete.

SSGM: Do you prefer to buy or lease?

HILL: I’ve always been a person that buys. There are advantages both ways. Usually I can find a shop that will purchase it from me at a reasonable price, so it’s worked out well for me. This way, every few years I’m upgrading my equipment. I know you can do that with a lease, but lease payments are as bad as buying it outright. At least I don’t have the monthly payments. I buy it up front and it’s mine.

SSGM: Is there any mechanical repair that you don’t do?

HILL: I sublet my transmission work as well as my bodywork. But everything else is in-house.

SSGM: What’s the most profitable repair? Is it suspension, brake?

HILL: Suspension, brake, and especially your basic maintenance. Even though people say there’s not a lot of money in oil changes, it’s the spin-off work from the oil changes: the belts, the tune-ups, the transmission and routine brake services. There are so many disk brakes out now and they seize up. If you service them, you’ll extend the life of the pads. So it’s not hard work, but it’s profitable, easy work, and not a lot of brainstorming. I’m also big on cooling system flushes. Even though we have the five year, 100,000 km cooling systems, you still get a certain amount of corrosion in there. You’ve got to be checking pH levels for acidity. Just because it says five years, it doesn’t mean that it is the case. Every vehicle is different.

SSGM: What do you think of the ‘160,000 km before your first tune-up’ phenomenon?

HILL: Spark-plugs will last 160,000 km if you’re using platinum. Can you get them out when they get to 160,000? You’ve just taken a tune-up and turned it into a set of cylinder heads. This is the other thing worth maintenance. For the majority of my clientele, we will pull all the plugs at 50 to 60,000 km and re-antiseize them. If they’re good, and we don’t see any carbon tracking on them, we’ll put them back. When you’re looking at 18 dollars per plug, it makes sense. You cannot leave them in for 160,000 because you’ll end up costing the customer in the long run.

SSGM: Is that a tough sell?

HILL: No. You tell people that plugs used to be replaced every 25,000 km, and they never seized because they were out so often. Almost everyone has had a repair where something was seized. You can get to 160,000 km and then all of a sudden you’re looking at a 2,000 dollar tune-up. So most people will prefer to pay 100, 200 dollars to prevent that.

SSGM: I notice you have the UAP/NAPA sign on the front. Does brand recognition help?

HILL: It does. UAP/NAPA is our (designated) supplier; having a name brand product is a lot easier so customers know you are putting on a quality part. There are so many second line parts out there. For the cheap shop, fine. I’m not a big fan of the second line part. I do a quality job with quality parts. A lot of times the second quality parts are just as good, but you’ve got to find that out.

SSGM: I see that you’ve got a modern computer. What business management software do you use?

HILL: It’s the Bizware software that the franchise supplies. It has a complete maintenance program on it with the ‘thank you’ letters and the ‘deferred repair’ letters. You use the software that works for you. It’s like any software, there are some glitches in it.

SSGM: Do you use any programs outside the supplied software?

HILL: I use ALLDATA for my repair manuals. I’m taking a look at the Snap-On undercar one. It’s a duplicate of my ALLDATA. Is one better? At certain times, one is, other times, the other. It depends on what your mechanics are accustomed to working on. Right now with Certigard, we have a lot of on-demand training. This is one thing about being with a franchise. You’re not out there by yourself, there’s a lot of backup. We’re considering several different programs for (just-in-time) training. One is the IDL system. And Snap-On (Training Solutions-ed.) has another one that’s on CD-ROM. That’s the way the industry is going. And it’s going to be great. It used to be that you had to take technicians out of the shop, send them on a course, figure out whether that course at the right time of year, etc. Now if you’re coming into A/C season, you can take six weeks before that and give your technicians videotapes. Not so much to teach them, but to refresh their memory.

SSGM: What is one of the biggest problem you are having in the industry right now?

HILL: Training. Especially with the cut-backs with the apprenticeship system. I taught Centennial College when they brought it out in the evenings. It was a trades update course. It was good, because it involved licensed mechanics that already had their ticket and were going back for an upgrade. I don’t see enough of this. Technology is moving so
fast, that if you don’t keep up, you’re going to be left behind.

SSGM: How’s your turn-over rate? Can you keep people?

HILL: Yes. The biggest problem is finding good quality technicians. Usually if they are with a place, that shop owner will do what he has to do to keep them.

SSGM: Do you find that you have to turn vehicles out the bays faster now?

HILL: The problem is that if you start turning the vehicles out the bay too fast, you’re going to start missing. And that can be detrimental. Let’s be honest. We’ve all heard the scenario “I just had my car in for an oil change, and the brakes went”. That’s the worst publicity you can have. The attitude that I take is that every vehicle that is in here for an oil change must be inspected. I give inspection sheets to the technicians which must be done on every vehicle. The clientele comes to expect that from me: that when they drop their vehicle off for an oil change, they’re not just getting an oil change. If they wanted an oil change, they’d go to a Fast Lube. They want to know the condition of their car. Sometimes it’s hard to turn around and tell someone that they have to spend 1000 dollars on their car.

That’s where a lot of misconception of the rip-off mechanic is coming from. Because the mechanics are trying to do the quick work, not inspecting the vehicles, then the customer has a break-down, gets into a shop that does inspect the vehicle, and says “well, if I needed 1000, 2000 dollars worth of work, why didn’t my own mechanic tell me?” Not putting down other technicians, but it’s time to sit down and say, “look, we’re an elite crew here, it’s time to sit down and do our best work”. The days of the grease monkey is gone.

SSGM: Howe important is the look of the facility – the office, the bays?

HILL: Extremely important. You spend your second largest investment, the average is 30,000 dollars now. If there’s no place to sit in the waiting room, and you see grease in the bays, and, you don’t want your 30,000 dollar investment sitting in that. It’s got to be clean. It’s a dirty trade, but it doesn’t have to be a pigpen. The little high touch issues are like vacuuming a vehicle. A lot of clientele just don’t have time to vacuum it. When they come in for an oil change, they get a vacuum. You can’t put a price on that kind of service. They know that they can drop it off, have magazines in the waiting room, it will be clean. They’re not going to be disturbed, because they’ve got their section off to the side. They don’t have to see what’s going on with the business. They can keep up with their paperwork while their car is being serviced, and then they are on their way. A shuttle service now is also absolutely imperative. We pick the vehicle up from work and take it back to them. It’s a fast paced world now. We’ve got to change.

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