Why we left a large Automotive SMART repair franchise.
Before Phantom, we existed for many years under a well recognised name of a SMART repair franchise. You’d think with all that brand exposure and supposed marketing prowess of that firm we’d be mad to leave it.
Things weren’t going badly for us with them but sadly the relationship is skewed to massively favour the franchisor and with our costs set to go up and us coming to the end of our contract, we decided to move on. We felt that our repeat custom was down to what we do rather than what the brand offered and were sick and tired of paying through the nose the fee’s associated with it.
Franchising works by taking a cut on every penny we turnover, typically 10% along with various other fees on top.
Whilst that’s fine if the franchisor is doing their best efforts to develop your business in line with the money you give them, but as a Bodyshop rather than a mobile unit our turnover was much higher meaning we pay a disproportionate amount of fee’s compared to a van for what we get back from the franchisor. In particular their marketing efforts focused solely round the vans and very little in the way of fixed base workshops.
To us this seemed unfair given that we still had to do a lot of local marketing efforts as well.
We ended up having to go thought a lengthy legal process after leaving despite reassurances this wouldn’t be the case, now we’re on the other side of that we can see that our decision to move was a good one.
We can have complete control over our marketing activities and spend, position our business to take on larger work that a SMART repair franchise is not known for and not have to give 10% royalties. We’ve been able to offer new services like Non fault accident repair which has helped a lot of customers out where they have been hit which otherwise might have ended up ‘knock for knock’ and ADAS calibrations which has futureproofed our business.
We don’t regret being part of a franchise but given the number of businesses that have left over the years, we’re not alone in our thought process and in particular for fixed based units.
Its onwards and upwards from here!