Profile in Success - June 2009

Service Powers Growth
By Jim and Elaine Norland

Distinctive signage with reader board.

Imagine an oil change and service business where employee incentives de-pend on customers who come back, not on what additional services they can pressure customers to buy; or one where oil change customers stay in their cars because service is so quick (mostly under eleven minutes), yet thorough, that they’d hardly have time to walk to the waiting room. Then imagine service departments where ASE certified techs are able to handle almost any maintenance need short of an engine rebuild.

That’s the business model at Express Oil Change & Service Centers, a fast growing chain in the Southeast, Texas, and Oklahoma. Already counting nearly 170 company and franchise locations in nine states, the organization plans to open 10 to 12 new centers this year and grow to a total of 230 to 250 locations in five years.

New vehicle sales have plunged in the last couple of years, but that seems to be good news for Express Oil Change, which targets owners of older vehicles. The economy may have slowed dramatically, but this year’s outlook for Express Oil Change is bright. Same store sales in 2009 are projected to increase 5 percent to 6 percent over the previous year.

“The shock of fourth quarter ‘08 is generally over, and we’re beginning to see car count improvement as a result of that,” says CEO Ricky Brooks, from his Birmingham, AL headquarters. “People are driving less so there are slightly fewer oil changes required or the amount of time between service is elongated a couple of weeks. That’s going to reduce car count a little bit, but customers are taking better care of their cars.” That may more than offset the impact of fewer miles driven.

If company projections hold true, 2009 would see the seventh straight year of total sales growth for the organization. System wide, 2008 sales per location averaged over $810,000, well above the oil change industry’s average of $500,000 to $600,000.

“We’re focusing on building market share. We have an excellent and consistent existing and new customer return rate,” Brooks said.

Both signs say "fast."

Many fast lube businesses are competing for market share with, say, a $19.99 price, hoping they can pressure customers to buy additional or premium services. At Express Oil Change & Service Centers, a basic oil change and 15-point safety check and windshield wash costs twice that much.

Additional services may be recommended but never pressure-sold. Employees aren’t compensated on how much they sell but on customer satisfaction and return visits. The focus is on building the customer’s trust, Brooks says, and that will bring about return visits and more services.

“Every hood tech is being evaluated by his customers.” That’s being reported back to the Express Oil Change & Service Centers headquarters on a daily basis, and employees are scored. Additional employee evaluation comes through multiple service metrics including thoroughness of the service and total time of service or visit.

While many fast oil change and related service centers have grown or been established in conjunction with car wash and detail operations, Express Oil Change & Service Centers are not. Brooks believes the two enterprises are totally different in the nature of their employees and services as well as pricing. For example, his company’s owned and franchised locations have no part-time employees, and there’s no such thing as a complimentary car wash with your oil change.

“We are working to build a full-time professional and elite team in every facility,” Brooks says. “A fast lube and car wash combination can be very complementary. A customer would love to get their car washed and cleaned very nicely at the same time they’re getting it serviced. But to execute our model they’ve got to be run as separate businesses.”

All new Express Oil Change & Service Center locations are ground-up construction. An exception: A few years ago, the company acquired some 25 Tune-Up Clinic and Texaco Express Lube sites in the Atlanta area. “We got some locations we never would have gotten otherwise,” Brooks says. “But when you buy somebody out like that you pick up some locations you know you’ll close the day you buy them; that’s calculated into the price.” Nineteen or 20 of those Tune-Up Clinic sites are doing extremely well, he says, but five or six have been closed.

Full house — every operator’s goal.
Tech at work.

His company’s stores, either corporate owned or franchised, are easily recognized. Generally located on a site of approximately 25,000 square feet, the 3,800-square-foot structures (35 by 105 ft.) all sport a blue metal standing seam roof, “sort of our company trademark,” and red, white, and blue signage. At the bottom, “& Service Center” is printed against a yellow background. The long side of the building, showing multiple drive-through bays, faces the street.

Bay interiors are clean, painted in a light color, and well lit. A small waiting room provides customer seating for services that take longer than the standard oil change. All stores are open the same hours (8 to 6 weekdays, 8 to 5 Saturdays) with no evening or Sunday hours.

Employees at either company or franchise stores all meet the organization’s grooming and appearance standards, and all wear company uniforms. No facial hair other than mustaches is allowed. Brooks and a partner, successful franchisees, bought the company from founder Jim Lunceford and became owners and franchisors in 1996.

Most stores are owned and operated by franchisees. Express Oil’s average daily car count for franchise locations open at least 12 months is 43, almost a third above the oil change industry average for “lube plus” stores. Average annual franchise store revenue, at $780,000 last year, is 38 percent above the industry average.

The waiting room offers access to and a view of the service bays.

Express Oil Change & Service Centers operate on three key elements: speed, reliability, and convenience. They offer that combination to both retail and fleet customers, and will even pick up and deliver fleet vehicles to nearby businesses. They also offer Saturday service, which means fleet vehicles can be serviced when they would normally not be in use.

Commercial and municipal fleet business is developed by managers and supervisors calling on neighborhood businesses and agencies, Brooks says. Owners or managers get the benefit of fast service, professional maintenance, competitive pricing, and consolidated billing, he adds. Fleet customers also enjoy permanent discounts and recordkeeping on their vehicles by VIN number.

Both fleet and retail customers appreciate having a full-time professional staff servicing their vehicles, numerous customer testimonials confirm. Employees are encouraged to grow in both their professional qualifications and responsibilities.

“We tell every single employee we hire that they have an opportunity to grow to any level they want, from hood tech or pit tech all the way to franchisee. We tell them they can go as far in our company as their ability and their ambition will take them,” Brooks says. “We have over 100 training classes provided chain wide per year on everything from basic and advanced oil bay procedure to comprehensive brake service training.”

Top and bottom - and clean as a whistle.

Service center employees who aren’t already ASE certified are encouraged to train for that. Work schedules are changed to enable them to take classes. Upon completion and certification, each employee is reimbursed for classes taken. The certification builds credibility with customers as well, Brooks notes.

The range of services is more extensive than those of many lube and light maintenance shops. Tire, battery, and radiator replacement or service; brake repair; belts; alignment; suspension; ignition; and fuel injection service are all included. Needed parts are quickly ordered and installed, usually the same day.

Some franchisees are former managers of Express Oil Change & Service Centers, but most were successful professionals in another field before becoming franchisees. A team of franchise support officers helps train and supervise their startups. Initial training, site selection, and help in permitting and building operations are part of the franchisor-provided services.

“We operate a substantial number of stores as corporate, and our corporate stores lead the chain in every measure of success,” Brooks says. “We have not only the authority of a franchisor but credibility as a very successful operator with 30 years of experience.

“We believe we have two customers: the consumer coming through the retail outlets and the franchisee. Success at the store level is paramount with us. We believe that we exist to assist the franchisee in operating their business.”

To help them, each store’s operations are monitored by the company’s proprietary system, ExpressTrack, which enables franchise support officers and others to see how each store is performing and to render help when needed.

The franchisee’s responsibility is “to execute the Express Oil Change model in the Express Oil Change way,” Brooks explains. “Since we lead the industry in every important measurement, and since we’ve had such tremendous success not only corporately but chain wide, we don’t have many issues with franchisees really trying to change the model.”

The Express Oil Change & Service Center model obviously works. The company has a 99 percent success record with franchise operations, highest not only in the oil change/service category but in any kind of franchising.

Owners of those stores, and their customers, seem to like this model of car care.

Jim and Elaine Norland are regular contributors to Auto Laundry News.

AUTO LAUNDRY NEWS is published by EW Williams Publications Company
2125 Center Avenue, Suite 305, Fort Lee, NJ 07024-5898, USA Phone: 1-201- 592-7007 Fax: 1-201-592-7171