Some Closed Dealerships Will Become Sears Auto Center Franchises
By Brendan Moore
You’ve probably seen at least a few closed auto dealerships around where you live; sprawling, empty lots with a big building on it, looking forlorn and abandoned.
You think to yourself, “What are they going to do with that retail space? It doesn’t really fit any other kind of business. Guess they’ll have to scrape the building off and start with an unimproved lot.”
At least that’s what I think.
I mean, occasionally, some ambitious used car dealer will take on the space, but other than that, it usually requires a tear-down for the next new tenant.
So, a lot of these former auto dealerships just sit empty. It’s a lot of square footage to take on, and the rent is usually high, since dealerships are generally located in high traffic and/or easy access locations. It is also, as mentioned, a very specific type of retail layout. It’s a shame in one other regard, that is, many of these former dealership buildings are of very recent construction as a result of most manufacturers’ push to get dealers to upgrade their facilities in recent years, and therefore represent a considerable capital investment. It’s a tough scenario to consider a complete tear-down of what is many times a new building.
According to various articles published today, Sears has launched a franchise unit of its well-know Sears Auto Center business, and that new franchise distributor is offering some former GM and Chrysler dealers a Sears Auto Center franchise, which is to be located on the former dealership site.
According to retail giant Sears, “Sears designed the new franchise program to help those dealers leverage their facilities by building a set of businesses around parts and services, over-the-counter merchandise, and previously-owned vehicle sales.”
And for those new-car franchise dealers that did not walk away from their retail locations, but instead simply shut down the new-car franchise part of the business and then converted to a used car retail and service model, the opportunity with Sears represents an excellent pairing.
These dealers are now able to offer their retail customers the security of a huge, trusted, nationally-known brand attached to the service work they do on customers’ vehicles. They had that before with the vehicle manufacturer’s brand; that is now gone of course, but the Sears Auto Center brand is a great replacement.
Bill Jackson, president of Sears Authorized Independent Auto Centers, LLC, says it all when he states, “The Sears auto franchise is a win for customers and a win for dealers. For customers, Sears Auto Centers will be more convenient than ever, with more locations providing our full product and service offerings. This is also a great opportunity for dealers who are currently selling used cars to gain a brand that’s nationally recognized for quality and dependability, a resource for buying high-quality auto parts and supplies, and access to a proven business model that has been tailored to their needs.”
According to Sears, the franchise advantage includes the known brand strength of the Sears, DieHard and Craftsman brands, and, the main Sears brand, the franchisee’s ability to piggyback off traditional Sears marketing, as well as Sears’ new social media marketing, the aggregate wholesale purchasing power of the parent company on tires, batteries, parts, equipment and supplies, and, also importantly, the retailer’s access to the Sears credit card and the corporate systems and processes.
All, from the franchisee’s point of view, while keeping the freedom and autonomy of running your own business.
And, a Sears spokesman added, the new auto center franchise locations will provide products and services for automobiles, light trucks and motorcycles that include tire selection; batteries from DieHard; maintenance and repair services for consumer and commercial fleets; and custom wheels, car care products, truck boxes, fluids, floor mats, DieHard battery chargers, DieHard portable power and XCargo carriers. In short, everything that a customer can get currently at the traditional Sears Auto Center located adjacent to a Sears store.
The timing of the launch of the franchise business could not be better from the perspective of the Sears Auto Center corporate parent – thousands of new-vehicle dealerships have ceased business in the last 18 months, creating a pool of potential franchisees from the population of former dealer principals and/or senior managers that would be ideal owners in terms of previous retail experience.
Sears Chairman Edward S. Lampert has a stated strategic business goal of letting outside businesses buy rights to the name of Sears’ once-proprietary brands, in order to expand the power of the Sears brand and the volume of Sears sales. The Sears Auto Center franchise business is one tangible result of that push; the announcement last week that it had signed a licensing agreement to sell DieHard battery chargers, jump starters and power inverters to Schumacher Electric Corp. so that Schumacher could offer those products for resale is another result.
The first Sears Auto Center franchisee is Coleman Auto Group in East Windsor, N.J., which will operate a Sears Auto Center on the site of a former Chrysler dealership. The store is scheduled to open next month.
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