“When life hands you lemons, make lemonade” could be the motto for today’s blog post. Driven Brands Inc., franchisor of automotive service brands including
This article from the Charlotte Business Journal highlights how Driven Brands’ new “Jump Start” program is making lemons into lemonade for former automotive dealerships that have been dropped by their parent companies.
Les Boyd, whose family has run auto dealerships for three generations, is converting his Chevy dealership into a Meineke Car Care Center—one of the first to make the switch under the Jump Start program. Boyd says, “Without Driven Brands, we’d have closed the doors.”
The Jump Start program allows dealers to purchase a Driven Brands franchise for half the normal fee. Driven Brands will also refund 75 percent of the franchise royalties the first year, 50 percent in the second year and 25 percent in the third year of the agreement. Another big plus is that dealerships typically have all the equipment a Driven Brands franchisee needs to get started. That means startup costs are far less (typically $17,500, compared to $275,000 for non-conversion franchisees) and the franchises can be up and running in as little as 60 days.
So far, 10 dealers nationwide are converting to Driven Brands franchises. Driven Brands senior vice-president of franchise development Dave Schaefer’s goal is to convert a minimum of 10 more this year. He says the Jump Start program will be a success if, two years out, the program has 50 new franchisees who have successfully transitioned into franchise ownership.
Driven Brands started working on Jump Start last spring when GM and Chrysler both announced plans to close hundreds of dealerships. Schaefer says the program won’t be profitable for the company in the short term because of the discounts, but the company is looking at the bigger picture. Converting dealerships will allow Driven Brands to add franchisees with years of industry experience.
Two factors stand out to me about this story: First, Driven Brands is thinking long-term—not short-term. They’re willing to give up some profitability to build an overall stronger company. And, where others saw only the negative—businesses closing down—Driven Brands saw opportunity. With franchise financing still hard to come by, it’s easy for franchisors and franchisees to get discouraged about new franchise growth. An attitude that looks for growth opportunities in all situations is essential for franchisors going forward.
On an unrelated (but still relevant) note, Driven’s chairman & CFE, Kenneth D. Walker, has been named the 2010 Chairman of the International Franchise Association.
Rieva Lesonsky is founder and president of GrowBiz Media, a content and consulting company that helps entrepreneurs start and grow their businesses. Follow Rieva at Twitter.com/Rieva. Visit SmallBizDaily.com to read more of Rieva’s insights. Visit StartupNation to buy her newest e-book, 23 Hot Businesses to Start Right Now!