Sears to Franchise Auto Centers

Discussion
Feb 19, 2010
George Anderson

By George Anderson

Sears Holdings announced yesterday that it has embarked
on a plan to franchise Sears Auto Centers. The company believes the time is
right for this move with over 3,000 car dealers having lost their franchises
of various auto makers over the past year.

The first company to sign on as
a franchisee, Coleman Auto Group of East Windsor, New Jersey, is opening a
Sears Auto Center in a space that formerly housed a Chrysler dealership.

The
new franchises will offer the same products and services for cars and light
trucks as the 850 company-operated Sears Auto Centers in operation today.

“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,” said Bill Jackson, senior vice
president of Sears Holdings Corp. and president of Sears Authorized Independent
Auto Centers, in a press release.

“We’re thrilled to join the Sears Auto Center network. No other opportunity
combined so many features that we needed as we sought to stabilize our business
and position it for future growth,” said Bill Kendall, of Coleman Auto Group. “Already,
we’ve witnessed the level of support and care that Sears has invested in our
success. And we are ready to work hard to leverage the strengths that Sears
brings to our existing relationships with customers.”

Discussion Questions: Do Sears Auto Center franchises
represent a win for Sears Holdings, franchisees and consumers?

Please practice The RetailWire Golden Rule when submitting your comments.

Join the Discussion!

21 Comments on "Sears to Franchise Auto Centers"


Sort by:   newest | oldest | most voted
Marc Gordon
Guest
Marc Gordon
11 years 2 months ago

I love Sears! They’re smart, aggressive and have a solid business plan. Next on the agenda should be franchising those little diners you find in some Kmarts. Nobody makes a vanilla milkshake like Kmart. Nobody!

David Livingston
Guest
11 years 2 months ago

Great idea but being done by the wrong company. Sears has proven time and time again they have no follow through ability. Perhaps if a company with a more reputable name tried this, it might work. I can’t imagine any business paying a franchise fee to have the name “Sears” on their sign and thinking it will help draw business.

Bob Phibbs
Guest
11 years 2 months ago

Yeah because in so many consumers’ minds, Sears means quality. Not. Their going to try to license off what once was a quality name–during the ’50s–and make money off people quick to write a check and believe the emperor has clothes.

W. Frank Dell II
Guest
11 years 2 months ago

Sears had a great brand image of trusted value for Middle America. The problem is, it is simply old.

Automobiles are far better built today and they last much longer. Additionally, their operation cost continues to go down. This means there is a smaller market for auto repair and service. As cars and trucks include more and more electronics, the ability to identify problems is more complex. This has increased dealer service, further limiting the market for Sears. Unless Sears uses the franchise fee to advertise and provide continual education and training, the results will be only marginally profitable.

Carol Spieckerman
Guest
11 years 2 months ago

Four words: Look at Sears monetize!

Max Goldberg
Guest
11 years 2 months ago

The auto centers are a win for Sears and the dealers. They provide consumers with a recognized, mostly trusted, brand name location to take their cars, regardless of make, for repairs and quality parts. For dealers, they get to borrow the equity of the Sears name, rather than having to build a brand from scratch.

Dick Seesel
Guest
11 years 2 months ago

Perhaps a smarter idea would be “DieHard Auto Centers.” Panelists noted this week that Sears is making a smart move selling one of its core product lines to other retailers, because DieHard still has brand equity–along with Kenmore and Craftsman. (Come to think of it, selling Craftsman tools to a group like Ace or TrueValue would be another win.) To David’s point, the Sears name itself is not as credible as it used to be. Bottom line: Sears Holdings continues to show that it’s more interested in leveraging its brand properties than in actually turning around its retail stores.

Susan Rider
Guest
Susan Rider
11 years 2 months ago

Sears definitely needs to think out of the box to revive this American icon. Yes, the franchise possibilities will enhance service and therefore enhance traffic at the stores. Ideas like these, if executed well, will help revive Sears. The franchise arrangement must be tight and must hold the franchisee to certain standards though, or this could be a bomb for Sears.

Gene Hoffman
Guest
Gene Hoffman
11 years 2 months ago

It’s my guess that there will be only tears
when folks sign up as franchisees with Sears.
But since on the question I am only a bard
I’ll let franchisees experience a DieHard.

Paula Rosenblum
Guest
11 years 2 months ago

There’s no question that smaller garages stand to reap the fruits of dealerships’ closing.

I don’t see any harm in Sears joining Firestone and Goodyear in extending its brand into one-to-two-bay maintenance and repair shops. In fact, it’s good to see Sears playing to its strengths for a change.

Bill Bittner
Guest
Bill Bittner
11 years 2 months ago

This makes sense from a lot of perspectives. Next thing Sears will do is make the Auto Centers “order online and pickup in-store” locations.

As more retail moves to the Internet, retail businesses need to do more to emphasize their customer service. You can’t (yet) have your car serviced remotely. But by having a conveniently located Sears franchisee who builds brand consciousness with the consumer, Sears makes it clear they are in the business of providing service.

By adding the pickup and return services they make the local location a full scale retail outlet without the inventory costs and the real estate costs are subsidized by the service revenue.

Sounds like a winner.

Sandy Miller
Guest
Sandy Miller
11 years 2 months ago

This is an excellent idea. Most (not all) successful retailers are broadening their offering. Auto Dealerships have one important advantage–when shoppers visit their stores for auto products, they generally drop in to see the cars/trucks. There is an issue–Sears buys direct; when they resell to retailers, retailers will find it difficult to be competitive.

Mark Burr
Guest
11 years 2 months ago

I haven’t been to one for years (decades). It’s not even a choice that comes to mind. It won’t matter who owns them. Simply putting them under franchise ownership doesn’t even put lipstick on a pig.

There are far too many choices for tires alone. There are far too many choices for batteries. There are even more choices for repairs that they are totally incompetent at performing.

The only move that makes sense is to close them and sell DieHard’s off the shelf which they have already stated they will do. They don’t have a leading brand of tires and even Costco would crush them on tires, not to mention Discount Tire.

I can’t imagine a smart entrepreneur looking for a franchise opportunity would want to enter into something that no one wanted in the first place. It’s sort of like now offering a franchise for Montgomery Ward. But then again, there is always some market for nostalgia, isn’t there?

Cathy Hotka
Guest
11 years 2 months ago

There’s a shortage of good auto centers (at least in cities) so this may be an idea whose time has come. Do they have to be named Sears, though?

Doron Levy
Guest
Doron Levy
11 years 2 months ago

Does Sears have any equity left on the auto side? Wasn’t there a recent ‘eyewitness news’ expose of pumped bills and unscrupulous auto center managers? Sears is not a brand synonymous with quality and value anymore so why anyone would pay for that license is beyond me but if you just recently lost your Saturn or Pontiac franchise, what else can you do?

Arthur Rosenberg
Guest
Arthur Rosenberg
11 years 2 months ago

I have friends across the country that prefer Sears Tire Centers even though they are Sam’s Club or Costco members. When I have asked why the preference, they simply note the convenient hours of operation and fair pricing. They uniformly note that if they are on the road and have a follow-up problem, there is likely to be a Sears nearby.

A couple of years ago I was traveling and a car parked next to mine wouldn’t start. There was a Sears Auto Center at the other end of a strip mall. A technician from Sears actually came out to the car and began diagnosis. Great and comforting service. Sears Centers are already well equipped with computer diagnostics.

This could be a win-win for franchisees and the franchiser.

Ben Ball
Guest
11 years 2 months ago

Sounds like a logical follow on to the brand asset monetization strategy announced for DieHard. One of the few places I think Sears does maintain some consumer credibility is in the Auto Center. And most local car dealerships–particularly the franchises the major car manufacturers wanted to shed–do not. But to build on Richard Seesel’s idea, wouldn’t it have better to brand them DieHard–and to hire Bruce Willis as the celebrity spokesperson?

Craig Sundstrom
Guest
11 years 2 months ago

Once I waded through some of the sarcasm here, it seems a pattern emerged: good idea but … “But” as in having little faith in Sears management’s ability to execute a strategy, no matter how good the premise. I can’t say that I find much to invalidate this belief, but I wish them well.

Ted Hurlbut
Guest
Ted Hurlbut
11 years 2 months ago

Sears continues to think outside of the box, but like their decision to license the DieHard brand that we discussed last week, while this may be good for Sears Holdings, it might not be so good for the retail stores.

Ed Dennis
Guest
Ed Dennis
11 years 2 months ago

Not sure what Sears thinks their image actually is. The only reason to franchise is to gain expertise and buy reputation. I don’t know if Sears can actually sell their reputation and every car dealership I have ever been in has as much or more expertise than Sears. The internet is full of “I hate Sears” sites. I think an auto dealer would be much better off aligning with a top-of-the-line tire network (Michelin, BF Goodrich, Uniroyal) and advertising the [heck] out of standard service items (Quality Oil Change with all the trimmings for $29.99). Every possible thing Sears can offer is readily available without a franchise fee and royalty payments.

tad kopij
Guest
tad kopij
11 years 2 months ago

Sears Holdings is not about Sears the store, but about the assets that the store has created. In time, I believe there will be no more Sears, but there will be a Sears Holdings.

wpDiscuz

Take Our Instant Poll

How much will franchising Sears Auto Centers help or hurt the company’s reputation in this area?

View Results

Loading ... Loading ...