"Uh oh...better get Maaco!" Now there's a tag line
we all remember, and therein lies part of the value of this
car-painting franchise, which was established in 1972 by Anthony
Martino.
To this day, Martino remains the sole shareholder of King of
Prussia, Pennsylvania-based Maaco Enterprises Inc., which had gross
revenues of more than $60 million last year. Make no mistake about
it, this is a family affair-- a fact emphasized when Mark Martino,
Anthony's son, took the reins as president in January 1996.
Maaco is looking for front-line operators. In fact, Martino
believes the best franchisee is one who's an "aggressive
follower." Accordingly, the best franchisees in the system
routinely provide tours of their facilities and press the flesh
with everyone who comes through the door.
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Maaco has determined that its customers use discretionary income
to buy its products and services, which establishes Maaco's
competition as pretty much all retail vendors. The franchise
competes on this large a scale through a specifically designed
program of low-price advertising, scripted sales pitches and
point-of-sale materials that up-sell the service. As Mark Martino
says, "If a customer wants a $199 paint job, we'll give
them a $199 paint job." But, truth be told, after hearing
about all that Maaco has to offer, very few of them opt for just
the advertised special.
Also adding to the customers' ticket price is the fact that
many Maaco locations provide collision repairs (the full name of
the franchise you purchase is Maaco Auto Painting and Bodyworks
Center). Still, auto painting remains the core of the business for
at least one good reason--at the franchisee level, the margins for
replacement parts are rather dismal. As one franchisee puts it,
"The profit is in the paint." Painting seems to make
money at all levels, as Maaco offers for sale most of the goodies
franchisees need to operate their businesses. One related caution:
When deriving your own pro forma income statement for this
opportunity, don't base your cost of goods sold purely on paint
costs.
Maaco franchisees are required to pour money into consumer
advertising programs--approximately $850 per week depending on the
costs in your market. Maaco's in-house advertising agency takes
responsibility for creating, placing and coordinating your
advertising in all media formats. Thanks to this solidarity,
franchisees receive extensive access to TV advertising, which has
been a proven benefit for this chain.
A suitable location for a Maaco Auto Painting and Bodyworks
Center requires a 7,000- to 10,000-square-foot building with a
secure parking lot. The site should be in proximity to a
well-established neighborhood and should have 100,000 garaged cars
in a 15-mile radius. The initial investment is $324,500 (which
includes the $30,000 franchise fee). Because the franchise now has
550 locations and has been successfully franchising for 27 years,
you should have little difficulty financing this expense through
outside sources, assuming you yourself qualify. The four-week
training at Maaco headquarters seems very comprehensive--the
opening support includes three weeks of on-site assistance, and the
system offers franchisees easy access to further help.
Todd D. Maddocks is a franchise attorney and small-business
consultant. You can reach him at TMaddocks@aol.com.
Contact Source
Maaco Enterprises Inc., (800) 296-2226, http://www.maaco.com