Switch to Big O Franchise Has Huge Impact on Existing Auto Repair Store
How do you increase tire sales? Eric Edgerton found his answer by joining the Big O Tires franchise
Eric Edgerton wanted to make his auto service businesses more successful. He started a quick lube business in his wife’s hometown of Aztec, NM in 1994 and then opened a service center in 2000. His businesses were doing well — but, he wanted them to do even better. One of his biggest frustrations was that he struggled to increase tire sales. His supply costs were too high and his competitors were selling tires for less than he could buy them for from warehouses.
Then he made the discovery that Big O Tires — which he had seen throughout New Mexico and Colorado — was a franchise. He reached out to learn about the company and liked what he heard. After spending two weeks working with Big O Tires owner Kevin Brooks, he made the decision to become a Big O Tires franchisee.
How does he feel now that he’s been a Big O Tires franchise owner for more than a year?
This is Eric Edgerton’s story.
Tell us about yourself. I grew up in Durango, Colorado, which is about 30 miles north of Aztec, New Mexico. I studied aeronautical engineering in college and went to work as an aircraft engineer, but I always was interested in owning my own business. My wife is from Aztec, so we started looking for business opportunities there and realized that Aztec – a little oil field town – didn’t have a quick lube in town. So in 1994 I started Aztec Quick Lube. There wasn’t a tire store in town either, so in 2000 we opened Aztec Car Care and Tire. I ran it as an independent company for 13 years, and it was strong in terms of maintenance, but I didn’t do many tire sales because my prices weren’t competitive. That was one of the biggest reasons I wanted to join Big O — to get better tire prices and a great nationwide warranty for my customers.
How did you find out about Big O? I’d seen the Big O’s in this area and was always impressed with the stores and their products. I got in touch with them about the possibility of joining the company. I was excited to see that they were a franchise, and that I could be an owner.
How has becoming a Big O Tires franchise owner changed your business? Right off the bat, the prices I paid for tires came down dramatically. Big O was able to provide me a broader range of tires, and the cost savings allowed me to increase tire sales, increase my profits and offer lower prices. One of the problems of being independent is that with big brand name tires like Michelin, you can’t even buy them from a distributor for a price as low as what some discounters are selling them for. Thanks to Big O, I can now buy tires at such a lower cost that I can put a price on a tire that makes me competitive with anyone — and I still make money.
Has your original quick lube benefited from the partnership? The quick lube and the car care center are all part of it — they are combined now under the name Big O Tires of Aztec. Big O has a national account with Valvoline, and I was shocked by how much I was able to save thanks to Big O’s relationship with Valvoline. It was dramatic! I have significantly lower costs for every single car that I serve, which translates into much better profits. Yeah, I pay Big O a franchise fee every month. But, if I look at all the benefits they offer, and if I am saving a lot of money on every tire I buy and every gallon of oil I use, I may be paying an extra $1 in fees for every customer I serve, but I’m making back an extra $5 in profits.
Are there any other benefits? Big O has great training. They really want you to succeed, and they have monthly meetings to help you and educate you. We have our monthly meetings in Albuquerque with 10-11 stores. We do short training sessions and also talk about the computer system and upgrades, as well as services we should be providing and how to present those services to the customer.
Big O also has national accounts with ARI, PHH and other large companies that manage truck fleets. ARI or PHH refer the thousands of trucks they manage to certain service facilities, and I’m getting some of that business.
There is also a special division of Big O that handles equipment. If I need a new balancer or tire alignment machine, I can get it cheaper, and I am also able to finance some equipment.
What has the impact been on your business? I’ve seen an increase in traffic and a better gross profit margin on my financial statement. The benefit goes beyond tires. We’re not only a tire shop — we’re a service facility, too. If people want to get an oil change while having their tires rotated, they can. We also educate customers about preventative maintenance. Maybe it’s time for a coolant flush or brakes. Tire sales are only part of the business.
How do your customers benefit from your decision to join Big O? When you buy a set of Big O Tires, you get a warranty, and thanks to Big O and other TBC Corporation tire brands, we can offer nationwide warranty coverage. If you drive to Denver and have a tire problem, you can call Big O’s 1-800 number and they’ll get you into the nearest shop.
What are your plans for the future? I am open to opportunities. I am interested in owning multiple Big O stores, but I want to get this store all the way up to 80%-90% of its capacity. I want to get this whole business plan nailed down before I open my second store.
What would you say to someone who is thinking about converting their auto business? I think what people first have to do is look at the costs of their supplies. If you are in tires and service, what are you paying? Call a competitor with a tire size and find out their price to sell it to you. Then look at what you are paying to buy that same tire from a tire warehouse. Can you make money if you have to match the competitor price? As a Big O dealer, you can still make money while selling at the same price as a Discount Tire or other outlet. We also get lower costs on parts. Yeah, you have to pay a royalty to Big O, but you get much lower costs. You also get to be part of a company that is very well known vs. being “Jim and Bob’s Tire Shop.”
Big O also really helps you with remodeling your store. They provides rebates to help cover a lot of the cost, as well as financing to help buy the beginning tire inventory you need in order to help customers as soon as they roll in. They want you to succeed, and they have a lot of great programs in place to help franchisees.
Looking for a way to increase tire sales?
Big O Tires has helped many people achieve greater success by converting to the Big O model. Download our free franchise report and start a conversation to learn more about us and the logistics and support that has helped Big O owners succeed for more than 50 years. You can also give us a call at 1-800-622-2446.