In 1956, Hugh Landrum signed an agreement in Macon, Ga. to open the first shop of a newly formed muffler installation franchise. In 1976, Bill Childs started a garage dedicated to tune-up work in Beaumont, Texas. In 1979, Jim Lunsford opened a quick oil change center in Alabama with the goal of taking the business statewide.

Three completely unrelated events? Hardly. From these humble beginnings, franchise giants Midas, Express Oil and Precision Tune shops, respectively, grew. Along with them, numerous other franchises like AAMCO, Cottman Transmission, Grease Monkey and Meineke Car Care Centers sprouted to help form a multi-billion dollar service industry that now dots virtually every part of suburbia. What's more, these franchises continue to form and expand.

That fact should catch the attention of auto part distributors and jobbers. Unfortunately, many either ignore these shops or see them as off limits, mistakenly believing franchises contract only with the largest national distributors for a limited amount of vendor business. The fact is, though, significant business opportunities do exist for automotive parts and product distributors. The first step to cultivating them is understanding how these shops operate.

Franchise facts and futures

Why franchise? Franchising allows a business owner (the franchisor) to expand a business without setting up an expensive and expansive management system. A franchisor essentially sells a marketing idea to other entrepreneurs. In turn, the purchaser (the franchisee) has the opportunity to open a business with a proven track record and a name and reputation already familiar to the public.

Guiding a franchise are the rules set by the franchisor. For example, the franchisor determines where a franchise is located and sets other business policies--such as the products and services that may be offered--which the franchisee must adhere to. The franchisor then collects a franchising fee and royalties off the franchisee's revenues. Within a franchise, the franchisor typically offers a variety of programs to help the franchisee. These programs can involve training, financing and advertising.