NEW ORLEANS — Big O Tires franchisees have a new arrow in their sale-closing quiver thanks to a secondary financing business arrangement the franchisor has struck with EasyPay Finance.
The deal allows Big O franchisees to offer customers who don’t qualify for the Big O credit card a secondary financing option, according to Brant Wilson, executive vice president, TBC, and president and COO of TBC’s Franchise Group.
Franchisees learned of the new franchising option at the group’s 2019 national dealers meeting in New Orleans earlier this year.
The deal is designed to help franchisees increase their car count and increase the average ticket size, Mr. Wilson said.
For now, about 7.5% of business conducted by Big O franchisees is through the Big O credit card, Mr. Wilson said, versus 15% to 20% at some of the business’ mainstream competitors.
With this deal in place, Big O has set up a “waterfall” system for credit applications, Mr. Wilson said in an interview with Tire Business, where submissions go through the Big O Credit Card approval process first, and “if not approved, it will ‘waterfall’ automatically to the secondary partner credit program.”
Big O said it selected EasyPay over other possible partners because EasyPay is a “loan-only” product that offers the lowest overall cost to consumers versus major automotive-focused lessors.
EasyPay offers six interest tiers starting at 29% depending on the consumer’s credit worthiness and has been working successfully with a number of larger Big O Tires and Midas International franchisees for over a year, Big O said.
Carlsbad, Calif.-based EasyPay — a business of Duvera Billing Services L.L.C. — is dedicated “to offering simple, transparent consumer finance options that grow small to medium businesses and enrich the lives of customers with good to no credit,” according to its mission statement.
This initiative is a follow-up to the franchisor’s 2018 conference theme of “Say Yes,” Mr. Wilson added, in that it allows franchisees to say yes to more potential customers.
Prior to this, roughly a third of Big O dealers had in place some form of secondary financing, Mr. Wilson said, so this deal will align the group under one vendor and streamline the process for all involved.
Another newer initiative Big O presented at the New Orleans meeting was promoting an increased emphasis on fleet business, which the TBC/Big O executives see as offering exponential growth over the coming three to eight years, Mr. Wilson noted.
To foster growth in this segment, Big O is working with Auto Integrate L.L.C., a Delaware-based fleet maintenance authorization tool that lets businesses and suppliers manage their maintenance authorization transactions securely.
“Half of our dealers already have a good footprint in fleet business,” Mr. Wilson said, noting that allying with Auto Integrate will allow dealers to integrate their fleet accounts into the Big O point-of-sale software, thus streamlining the business communication with those accounts.
“This (fleet business) is not necessarily a new thing,” Mr. Wilson said, “but the deal with Auto Integrate is a good leverage point to relaunch an emphasis on fleet business.”
Big O sees this deal as “great deal” for the franchisees in that TBC is working with Auto Integrate on a corporate-wide basis, bringing in all of the TBC retail stores and the Midas franchisees as well, making TBC and all of its individual components more interesting for fleets looking to streamline the number of vendors they work with.
Big O also is working with Maven Drive, a car-sharing mobility service offered by General Motors Co. In California, Big O has secured a deal to be Maven’s preferred service provider.
Regarding Big O as a whole, Mr. Wilson said 2018 was a “gangbuster” of a year, with the average per-store sales topping $2 million for the first time, with same sales store growth of 5% over 2017.
That growth continued in the first several months of 2019, he added, with same-store sales up 8% over 2018 based on increasing car counts. This amount of growth means Big O is taking share away from competitors in an overall up market.
During 2018, the Big O Tires network grew by a net of nine stores — 20 stores opened versus 11 that closed, primarily due to leases expiring or franchisees retiring — to bring the network to about 450 stores in 25 states.
Among the new stores opened in 2018 were locations for the first time in Texas and North Dakota. In Texas, Chris Monteverde, a California-based Big O Tires franchisee since 2004, acquired eight former NTB Tire & Service Center stores from TBC and converted them to Big O signage.
In North Dakota, first-time franchisees Randy Rhone and Ben Zachmeier opened a Big O store in Mandan, a city of about 22,000 just west of Bismarck on the Missouri River.
Also among new franchisees last year were car dealerships in the Indianapolis (Wood Group) and Des Moines, Iowa (Willis Auto Group), areas, a first-time occurrence, Mr. Wilson noted.
For the foreseeable future, TBC plans to keep growing the Big O Tires network by five to 10 locations a year, Mr. Wilson said.
One initiative worth noting: Big O is offering existing tire dealerships the opportunity to become a Big O franchisee without having to pay royalties on their existing business. The offer excludes a dealership’s “on-book” business but applies to new business generated over and above that, based on the principle that converting to a new business identity will attract new customers.
Mr. Wilson noted that in one such case, the dealership that converted more than doubled its sales from the year before. This policy launched in 2018 but Big O expects to be more aggressive with it going forward.
Another new program being rolled out is profitability workshops, where Big O invites a group of 15 or so dealers to meet and share ideas. Participants agree to have Big O review their profit/loss statements ahead of time to help benchmark those attending and offer advice on how to improve the bottom line.
The company is planning to have four or five more this year.
During the New Orleans meeting — themed “Together Toward Tomorrow – Big O in the Big Easy — Big O honored five franchisees with the group’s top business awards:
Mr. Monteverde was presented the group’s Point of Light award — which recognizes extraordinary franchisees who have contributed to the Big O organization with their knowledge, expertise and dedication — and was recognized as the group’s 2018 IFA Award recipient.
Derek and Jared Edwards, franchisees in Utah, received the Standing “O” Award, which recognizes franchisees and Big O employees for going above and beyond to support Big O.
Franchisees of the Year were:
Mike Trammel, a franchisee for over 21 years with a single store in Brownsburg, Ind.; Greg Kimberlin, franchisee for 25 years and owner of three stores in Kentucky; and Rob Curry, a franchisee for six years and co-owner of 26 stores in California and Colorado through his ownership stake in Big O franchisee Golden West Tire Centers/Southland Tire.
Bill Walker, a multi-store owner in Indiana and Kentucky, was inducted into Big O’s Hall of Fame.
Meeting attendeees also paid tribute to the importance of educating future generations through the Big O Tires Scholarship Fund and Blessings in a Backpack initiative, packing more than 800 backpacks with school supplies that were provided to the New Orleans Public School system.
