He came in with donuts and came out with tires and mufflers. Not literally, but let’s not quibble over the details. The figurative donuts-for-tires trade happened when Dunkin’ Donuts franchisee Eric Eskander struck up a conversation with a Meineke owner at the DDIFO National Conference two years ago. Eskander wasn’t looking to diversify his portfolio, which included 53 Dunkin’ Donut franchises on the South Shore of Massachusetts and three Anytime Fitness centers, but Meineke caught his eye. It was a reputable brand with a business model focused on growth; and cars, of course, were not just a modern convenience but a necessity, with regular maintenance and emergency repairs a requirement to keep them on the road.
Eskander liked the fact that there were multi-unit incentives in case he wanted to expand, plus great earnings potential, and significant territory available. He just recently opened his first Meineke shop, in South Dartmouth, Mass., but stresses that it’s not really a case of donuts or tires.
“The business models are similar, and both are customer service orientated,” says Eskander. “So we took what we knew from Dunkin’s and applied it to another brand.” But, along the way, Eskander learned there are certain best practices franchisees need to follow if they are to be successful expanding into new business models.
Doing due diligence
Is this franchise for me? What exactly do the franchise disclosure documents (FDD) say? What will the initial investment really be? And most importantly, what do other franchisees say? Eskander, the director of operations for Cadete Enterprises, the umbrella organization for his multiple franchises, says after he returned from the DDIFO National Conference, he started the process of systematically researching Meineke and verifying the brand’s claims. This included speaking with 15 Meineke franchisees across the country.
“I heard the good, the bad, and the ugly,” says Eskander. “Someone always has something negative to say – it doesn’t matter what brand they’re operating with.” But, he says, the feedback was mostly positive, and he felt confident that the brand – and the industry – was heading in the right direction. Much of his conversation with the Meineke owners centered on what kind of support services they were receiving: What sort of operational support does the brand provide? What about technology and software? What kind of training is offered?
He also asked them about what struggles they were facing in the automotive industry and how it was changing. Not many franchisees were willing to talk about the bottom line as far as profits were concerned, says Eskander, but he was more interested in fact-finding and confirming that the information that the brand was providing was accurate. “I felt comfortable enough with my findings to keep moving forward,” says Eskander.
Location, location, location
Ask not what a location can do for you, but what you can do for a location. With apologies to JFK, this truism is accurate when it comes to franchise site selection. There are no stock definitions of a great site, because business requirements vary. Eskander took an existing private auto repair shop and converted it to a Meineke that is 45 minutes from his office. He says that distance was as far as he was willing to go, because of a conscious decision he had made to keep all of his business interests in the same geographic area—the south shore of Boston.
“This is more efficient and allows us to use the foundation we’ve built over the years for Dunkin’s to continue to other brands. We’ve had opportunities in the past to expand out of state but that’s further than I’m comfortable,” says Eskander.
His first Anytime Fitness club was literally in the same parking lot as one of his Dunkin’ Donuts restaurants; and his other Dunkin’ shops are in the same vicinity, in the Cape Cod towns of Falmouth and Mashpee, plus nearby Pembroke and neighboring locations. The close proximity allows for more efficient logistics and store management.
Once he made the decision to expand beyond his current brands, Eskander says he wanted true diversification—a completely different industry than his current portfolio of fitness and food service.
“I love the Dunkin’ brand and we are very happy with it and want to continue to grow, but most of our business interests were in that company. It was a calculated decision to diversify and not to have all our eggs in one basket,” he says.
While there are plenty of brand sectors such as print and copying, pet, drain clearance, cleaning chemicals, and numerous others, Eskander says his search for expansion was centered more on the franchise model, not the specific product or service he would be offering. His family’s way of doing business is to provide a great customer experience, whether donuts or tires. He has no automotive background – “I’m not in there doing oil changes and if I were, we’d all be in trouble.” Eskander focuses on running the business while his technicians focus on changing oil, checking fluids and serving the customers. And, because the Meineke franchise model is generally similar to what he already knows from his other businesses, he’s able to take what he had already learned from Dunkin’ and apply it to automotive repair.
How does a busy franchise owner – with multiple Dunkin’ Donuts shops and fitness centers – ensure his core businesses don’t suffer when embarking on a new endeavor? Eskander says it comes down to people.
“It’s all about delegating and team building.” Eskander says he “built a team then built a Meineke.” He brought in a vice president of operations and an opening specialist – one had no experience in the auto repair industry and the other, the opening specialist, had 30 years of experience. The opening specialist had numerous connections and was charged with hiring mechanics, finding the right staff to put in each center.
With his people, policies and procedures in place, we asked the ambitious Eskander what’s ahead for his family business. He says his plan is fluid but another Meineke is definitely on his radar. There’s a low learning curve because he’s using his Dunkin’s knowhow and expanding it to another brand, making sure his team understands the importance of keeping a shop clean and serving customers with a smile and a commitment to making them happy. And it works. His first Meineke opened in less than three months.