A Rundown of Meineke, Midas and AAMCO's Expansion Efforts
For the three biggest franchised automotive repair brands in the country, expansion is always a major talking point as the companies continuously work to expand their reach and penetrate new markets. Meineke, Midas and AAMCO, all legacy brands with more than 40 years of experience, have extensive expansion plans going into 2018.
The last four years haven’t necessarily seen major growth from these franchises, however, as all three have experienced an overall decline in units, according to Entrepreneur and the brand’s individual franchise disclosure documents. In fact, from 2008 to 2014, U.S. franchises for AAMCO and Midas dropped 21 percent and 5 percent respectively, while Meineke saw a modest 4 percent increase.
As the brands grow older, so do the buildings and franchisees, and executives for the brands say the retirements of owners and infrastructure have contributed to the overall decrease in units.
Ratchet+Wrench spoke to executives at each of these companies to see how their expansion efforts went in 2017, and how they look going forward.
Total U.S. Locations: 1,080
Growth Trajectory: Lenny Valentino, vice president of franchise development for Midas’ parent company, TBC, says that area development agreements are a major focus point for Midas’ expansion efforts.
“When an existing franchisee or new franchisee comes into a system, they get certain territory rights where they have to build those locations over a threshold of time that we agree to,” he says.
Valentino says they have over 10 of these development agreements in place across the U.S., which can run from three locations to hundreds of stores on a global perspective.
Hot Spots: Valentino says Midas’ expansion efforts have extended all over the U.S., but the Carolinas, the Southwest and the Southeast have all been great areas for them.
Store Closings: Since 2014, Midas has seen its total U.S. locations dip from 1,239 to 1,080. As a 62-year-old brand, Valentino says that aging buildings and real estate are a big reason for many of these closings.
Also, he says, the brand has had to close some older locations that no longer fit with the vision of the brand going forward.
Total U.S. Locations: 621
Growth Trajectory: Brian O’Donnell, AAMCO’s senior vice president of franchise development, says his company opened 21 locations last year, and now has 51 deposits in the pipeline for new AAMCO centers in 2018.
“Our target for this year is to almost double what we opened up last year,” O’Donnell says. “We feel like we have a nice, robust pipeline.”
Currently, AAMCO operates under a 100 percent franchise model, but O’Donnell says they’ll start to open corporate stores in Hartford and Chicago.
Hot Spots: O’Donnell says that Texas has been a great market for the AAMCO brand, and will continue to see growth in 2018 and beyond. Florida, California and Arizona are also states AAMCO will focus on going forward.
Store Closings: Since 2013, AAMCO’s total locations have decreased from 674 to 621. AAMCO is a 55-year-old brand, and O’Donnell says part of the reason for these closings is due to changing demographics and a different customer base.
O’Donnell also cites an extended effort to spend time on a new training platform, IT platform and point-of-sale system as a reason why AAMCO hasn’t fully focused on franchise development over the past few years.
“We really did cut back on our franchise development efforts,” O’Donnell says. “But this will be the year we turn the corner and see a net center increase, and it’s a payoff of the investments we’ve made over the past 4–5 years.”
Total U.S. Locations: 829
Growth Trajectory: In 2017, Meineke opened 50 new locations, and completed resales of 65 existing Meineke locations. Danny Rivera, Meineke president, says the company plans to open 55 new locations in 2018.
Rivera says that these expansions come from a strong combination of new franchisees and current shop owners that want to take on additional locations.
Hot Spots: Rivera says that Meineke’s expansion efforts are spread out throughout the country, but the most aggressive areas were Pennsylvania, Texas, New Jersey and North Carolina.
Store Closings: From 2015 to 2017, Meineke’s total U.S. locations decreased from 880 to 829. Rivera says this was a conscious effort for the brand to exit locations that made sense for the brand 10–20 years ago, but don’t work anymore.
“I don’t see that as a long-term thing,” Rivera says. “In 2018, we’ll do a little more of that, but at the end of 2018, we should be coming out of that right-sized, so to speak.”