June 26, 2018—As the second-largest quick lube oil chain in the United States, Valvoline Instant Oil Change constantly has its eyes on expansion.
For the full year 2018, Valvoline plans to add 25-35 stores to its franchise system in 2018, with 20 stores under construction that will open in the next three months.
Valvoline offers full service oil changes along with instant, drive thru oil changes. It also does antifreeze changes, along with basic part changes. Additionally, Valvoline owns and licenses the Valvoline Express Care Brand, which licenses independent quick lube and preventative maintenance owner-operators to use the Valvoline brand.
Ratchet+Wrench spoke with Greg Armbruster, Valvoline Instant Oil Change’s vice president of real estate, and Jeff Malicote, director and general manager of Valvoline Express Care, to learn more about the brand’s expansion efforts, and how they’re acquiring real estate for these properties.
What does Valvoline's 3-5 year expansion plan look like? Are there any specific areas in the U.S. that you're targeting for growth?
For 2019 and the next several years, we see growing company stores at 25 per year and franchise stores at 25-35 per year, similar to the 2018 projections.
We are growing across all of our current markets as new trade areas develop or opportunities become available in existing store networks. Additionally, Valvoline Instant Oil Change is targeting several markets where our brand is currently not positioned or under-developed as a network. Specifically, we are very active in Virginia, Texas, Arizona, Georgia, California, Arkansas,the Mid-Atlantic and Florida.
Valvoline Express Care is seeking to convert approximately 30 stores annually where qualified conversion opportunities exist.
How have you been finding real estate for these new properties? Do your plans involve acquiring other quick lube businesses, or independent repair shops?
Regarding real estate, we have active broker representation in all our targeted growth areas. We are working with developers, individual owners, and landlords for store development. Our projects are typically ground leases or site purchases. We seek half-acre-plus pads in grocery anchored centers or sites near other destination retail centers. Obtaining good sites is a continuous challenge since there are a lot of small box retail activity in all the markets we’re targeting.
Regarding acquisitions, Valvoline loves to talk to operators that may be interested in selling their business.