Precision Auto Care's Fix for Stalling Franchises

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

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

The point-of-sale system with which Precision has begun linkingits 380 U.S. centers to headquarters records sales as they occur,letting corporate officials monitor each outlet's operationwithin an hour of the close of business. The system has beeninstalled at 45 centers so far, and all U.S. outlets will beequipped 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 afteragreeing to buy 1.7 million shares of company stock for $750,000and to work for a dollar for the first year.

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

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

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

Without the point-of-sale program, "we'd have noability to improve the bottom line," Brown says. "I'mconfident this is a good business if we get the right people, theculture, the technology, the management, the operational methodsand the marketing." -Washington Post

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