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Precision Auto Care's Fix for Stalling Franchises


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Leesburg, Virginia-At Precision Auto Care, it was the company--not its customers' cars-- that needed a tune-up. The firm lost more than $45 million over the past three years, not least because it often took the car-maintenance franchisor weeks to collect sales reports from the firm's 583 outlets in 13 countries.

No company gets turned around overnight, but Precision thinks that in addition to such measures as a new advertising logo and the sale of noncore operations, the targeted use of technology-including a new point-of-sale data-collection system and a company intranet-will point the way to revenue increases and profitability.

The point-of-sale system with which Precision has begun linking its 380 U.S. centers to headquarters records sales as they occur, letting corporate officials monitor each outlet's operation within an hour of the close of business. The system has been installed at 45 centers so far, and all U.S. outlets will be equipped with it by some time next year.

The driving force behind the changes is Lou Brown, Precision's president, who joined the company last August after agreeing to buy 1.7 million shares of company stock for $750,000 and to work for a dollar for the first year.

Precision's point-of-sale system totals sales data at Precision's garages and breaks it down by type of work done on which day of the week. Corporate officials hope to use the information to tell them which services are most profitable, to pinpoint days when service on fleets might be scheduled because individual customer business is slow, and to show lower-performing outlets how more successful ones got that way.

For example, in a recent week, one of Precision's Atlanta outlets had sales ranging from $1,695 to $4,417 on different days of the week, and the mix of services performed varied a bit from day to day, although the basic oil change was and still is a staple of Precision's business.

Will the point-of-sale system help get Precision into the black and boost its anemic stock price, now at about 60 cents a share? It may already be contributing to a company turnaround. Last year, Precision lost $18.4 million. Through the first nine months of the current fiscal year, it has lost just $5.6 million

Without the point-of-sale program, "we'd have no ability to improve the bottom line," Brown says. "I'm confident this is a good business if we get the right people, the culture, the technology, the management, the operational methods and the marketing." -Washington Post