LOSING YOUR SHIRT WITH AAMCO: NEW FRANCHISES WILL KILL YOUR CENTER

Thursday, August 6, 2009

NEW FRANCHISES WILL KILL YOUR CENTER

They're at it again. If a candidate has money - even an existing franchisee who's behind on their accounts, has terrible customer complaint levels, sends customers to other repair centers in order to avoid paying royalties - and that candidate plops down a deposit, then Corporate will drop a center right in top of you. I know. They just put one on the street parellel to me but only 2 miles away. Their excuse: "different traffic patterns." What horseshit. They never talked to any of the owners in the market, would not provide me any qualitative or quantitative information to back up their claims, and I had to escalate to get them to even return my calls. WOW - what a terrible investment I made in AAMCO. I almost feel sorry for all those Cottman guys who converted to AAMCO - now they're member of the largest network of the worst run franchise company in the automotive industry. And corporate - well, they are just out for their own money. Every time the run an existing shop out of business, they have an opportunity to try and dupe another idiot into paying for a money-losing AAMCO franchise.

2 comments:

JIm DunlapFebruary 1, 2010 at 9:23 AM
The franchise agreement of any Franchise system is written to benefit the franchisor. One of the few rights in our franchise agreement is the right to be advised of a new location and to have aamco receive and consider input from the existing dealers.
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JIm DunlapFebruary 20, 2010 at 1:49 PM
I would like to talk to the author of this blog. I am a dealer in Chesapeake Virginia. Center 4660. Please contact me. Jim Dunlap
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AAMCO Franchise Owners and Future Owners

Welcome to AAMCOFranchiseOwners Blog! This is a site owned and supported by franchisees who operate AAMCO Transmission Centers. It is also available to people considering investing in owning and AAMCO Transmission Center franchise.

Owning an AAMCO Franchise has traditionally been a rewarding experience. Under the leadership of the founders - the Morgan family - the franchise group thrived throughout the 1960's and 1970's. There were some tough periods - such as the 1980's claims from state attorney generals who asserted that AAMCO centers - along with stores owned by Sears and other automotive repair shops - were selling unnecessary repairs. These image and operational issues were eventually overcome and the company continued to thrive under the leadershop of the founders.

In 2006 the Morgan family sold the company to American Driveline, a company owned by the investment banking firm American General. American Driveline already owned Cottman Transmissions, the number two nationa franchise network. Under American Driveline management, the franchisor began to convert all shops to the AAMCO brand. Unfortunately, this often meant converting center using the weaker Cottman brand into an AAMCO, even though and existing and successful AAMCO was in very close proximity.

So the new ownership has a big debt. And big loan payments. And lots of problems.

American Driveline has already fired their first "wonder kid" president - Todd Leff. But they have retained their cadre of agressive beligerant attorneys. One example is Jim Gonorea. His role is to find an opportunity to cite a franchisee for making a mistake - real or perceived - and then squeezing hte franchisee for every penny they have. And because you have provided your fiancial statement as required, he knows just how much to squeeze.

Then of course there is market development and franchsie development. The former identifies new territory opportunities; the latter recruits new franchise owners. Both are comissioned for delivering new franchisees. At present, both functions are in the same department and, in fact, are run by a father-son team. The only problem is they are not incented to protect the success, or even the survivability, of existing franchises. In fact, it is to their benefit to force current franchises into weak financial positions so that they can help save the franchise owner by "reselling" the franchise. Who manages re-sales? You guessed right - the franchise sales department. Remember, they are driven to sell or re-sell franchises (and pop $30K franchise fees plus equipment sales plus software sales plus plus plus) into the corporate coffers).

Speaking of add-one sales. Take the corporate software "Focus." It is not a coded application. Rather it is a database management application developed around FileMaker. Talk about idiocy. It was developed by a franchisee (because the then-available operating software from AAMCO was so terrible) as an in-house customized application. Being persuasive, the franchisee sold the software application to AAMCO, along with the man who developed the application, Jon Kincher. Since then, the application has rattled along with release after release after release; two to four per year. And each release typically comes with a new set of horrific bugs that will be fixed in the next release. And each release contains increasing levels of "controls and safeguards" that make it harder and harder to run an AAMCO shop, but more importantly and ever increasing level of sub-applications that monitor what the center is doing and reports back to "big brother." For example, if you make a mistake on a ticket - let's say you charged tax to a tax exempt account - you'll have to call corporate and go through a special process to fix the ticket. Franchisees don't even know what all is being reported or why...but you can bet it will be explained to you when the Legal Department calls.

LOSING YOUR SHIRT WITH AAMCO

Thursday, August 6, 2009

NEW FRANCHISES WILL KILL YOUR CENTER

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AAMCO Franchise Owners and Future Owners

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