AAMCO Transmissions – Top-Rated Automotive Repair Franchise
From transmissions to Total Car Care, an iconic brand that keeps growing
AAMCO has spent the past half century as the worldwide leader in transmission repairs. Since our founding in 1962, we have serviced more than 45 million vehicles, and we have more than 700 franchised locations in North America. Our legacy brand continues to thrive. Entrepreneur magazine has consistently ranked us as a top choice in its annual Franchise 500 rankings of franchise opportunities. We are also an iconic brand that customers know. We recently hired a marketing firm to measure how well the public knows our brand, and 92% of people surveyed recognized us as the leading brand for transmission repair. This is no accident: we’ve spent five decades building customer trust through our “Double-A-BEEP-BEEP-M-C-O” marketing campaigns.
In the early 2000s, we diversified our business model. We realized that customers also trusted us to provide other repair services for their vehicles, so we launched our Total Car Care program. This successful program greatly expanded the revenue potential of a single AAMCO franchise and has allowed our franchise owners to earn a bigger slice of the general automotive repair market, which generates $62 billion a year in sales according to IBISWorld research. In 2014, 60% of our customers visited us for Total Car Care.
A growing automotive repair franchise
“Now is a great time to invest in an AAMCO franchise as we are making significant investments in supporting our franchisees in both the short term and for the future. Our long-term plan allows us to leverage and build upon our 50-year heritage,” says Brett Ponton, President and CEO of AAMCO. “We have a core brand positioning of expertise within the the transmission business, and customers know that if you are highly skilled in repairing transmissions, you can fix and maintain anything that a vehicle needs. Our core category of transmission repair continues to grow, and we’ve seen huge, double-digit increases in our Total Car Care category.”
Being the predominant leader in the $5 billion transmission repair industry has its advantages. AAMCO franchise owners have the unique opportunity to grab the majority of transmission repair work in their markets, providing trustworthy repair of the most expensive — and often more profitable — component on a car. Many repair shops won’t work on transmissions, and instead refer customers to us.
At the same time, there’s a big opportunity to capture more of the general automotive repair market. According to Automotive Digest, no brand owns more than a 10% share of the overall automobile repair market. We plan to use that fragmented market to our benefit by leveraging our expertise in transmission repair to expand our Total Car Care platform. By 2018, we will be considered an industry specialist not just in transmissions, but just about any general vehicle repair. To do this, we have rolled out our “Trust” campaign in national and local markets to build customer awareness of everything we offer.
“At AAMCO, we believe we are very well positioned to win the automotive aftermarket,” Brett says. “Our brand is very well known for transmission expertise that typically has a large transaction, or ticket value associated with it. Our goal going forward is to maintain our leadership position for transmissions, while focusing on building lifetime relationships with our customers, through providing expert level of service for all automotive services as well. Providing an expert level of service on all automotive services allows us to build relationships with our customers for life. As a result, we will build long-term business value for our franchisees.
A single transmission rebuild typically costs about $2,500, but most vehicles will only have that work done once. Tune-ups, oil changes, A/C repairs and other services are less expensive, but a lot more common, which is why the average customer ticket for service with AAMCO is $826. Overall, the average consumer spends $790 a year per vehicle on repairs, according to Consumer Reports. With the average vehicle on the road more than 11 years and the average driver having six cars over their lifetime, that adds up to more than $54,000 in lifetime spending on vehicle repair. If you factor in the fact that most households have two vehicles, and they generally take them to the same place for maintenance, the lifetime value of a customer balloons to about $105,000.
“The lifetime value of a consumer or a household for that matter becomes extremely important when you’re talking about Total Car Care,” Brett says. “A customer might come to us to fix their transmissions every eight to ten years, and while transmissions are significant cost and a big-ticket item there are numerous other services vehicles need on a much more frequent basis. The good news for the brand is that when you show your customers that you’re capable of doing exceptional work on the most complicated part of their car, you can win their trust and have them bring their vehicle back for all of their vehicle’s needs. They’re by becoming much more valuable over the course of their lifetime.”
According to the Center for Economic Vitality at Western Washington University, transmission repair only makes up 6% of the total repair aftermarket. Within that 6% of the market, we are dominant. We now have the opportunity to leverage that dominance to win over customers for long term care, expanding our share of the other 94% of the auto repair industry.
Costs and fees
The total investment necessary to purchase an AAMCO ranges from $227,400 to $333,000. This figure includes the $35,000 franchise fee, as well as the costs for equipment, training, leasing a property, and other items. In order to qualify to open an AAMCO, we are seeking candidates who have a minimum of $65,000 in liquid capital and a net worth of at least $250,000. The decision to open an AAMCO franchise is life-changing and expensive, which is why we offer a number of financing options that make it possible for us to partner with the most passionate owners in the industry.
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