AAMCO Franchise’s “Good, Better, Best” Initiative Drives Profitability for Franchise Owners

Posted Aug 2nd, 2016

AAMCO Roundtable: CEO Brett Ponton and COO Rob Rajkowski discuss how new investments are helping AAMCO franchise owners increase profitability.

With nearly 700 centers across North America, AAMCO is actively seeking single- and multi-unit operators who are passionate about the brand and committed to providing the highest-quality service.

Winning new strategy helps AAMCO franchise owners increase sales with consumer payment options for transmission repair

As the nation’s undisputed leader in transmission repair for more than 50 years, AAMCO is cruising into an era of unprecedented growth with a new leadership team intent on making the next five decades better than the first. Under the leadership of President and CEO Brett Ponton, AAMCO has unveiled a series of new initiatives to increase the level of profitability for franchise owners by directly targeting the needs of the 21st century consumer.

In 2015, AAMCO launched its “Good, Better, Best” program to provide the customer with a range of pricing for transmission repair. By giving options to today’s consumer, AAMCO franchise owners have the ability to win a larger percentage of transmission repair business — a segment that AAMCO has dominated for decades. The quality of the repaired or remanufactured transmission, as well as the length of warranty, goes up from Good, to Better, to Best. This allows the franchise owner to remain competitive in the market, while also offering an opportunity to increase profits from one transmission repair sale to the next.

Here is a quick glance at the “Good, Better, Best,” options from which AAMCO customers can choose:

Good – Consumer gets a used, remanufactured transmission purchased by a reseller with a 90-day, 1,800-mile warranty, only redeemable at the AAMCO center where the purchase was made.

Better – Consumer gets a brand new, remanufactured transmission with a three-year, 50,000-mile warranty that is redeemable at all AAMCO centers across the country.

Best – Consumer gets a brand new, remanufactured transmission with a three-year, 100,000-mile warranty that is redeemable at all AAMCO centers across the country.

“The ‘Good, Better, Best’ program is a uniform system for AAMCO franchise owners to be able to present multiple offerings of transmission repair to their customers,” says Jason Herman, Director of Operations – Northern Division with AAMCO. “The new program allows AAMCO to win a bigger share of the transmission repair market by being more inclusive to consumers. For many years, the only option that the consumer had was to have their transmission repaired and reinstalled. They didn’t have any wiggle room as far as pricing was concerned. Now, the consumer is empowered with more information than ever before. Rather than rest on our legacy, AAMCO has chosen to be empowered by that fact as well. The ‘Good, Better, Best’ program is a tremendous asset for franchise owners to remain competitive in the new economy over the long term.”

How AAMCO’s new consumer financing program strengthens the “Good, Better, Best” initiative

While the “Good, Better, Best” initiative offers three separate options to help the 21st century consumer find a transmission repair solution that suits their budget, AAMCO is intent on increasing franchise owners’ sales by offering a comprehensive financing platform to meet the needs of every buyer – no matter their credit score.

At around $2,500 for a single transmission rebuild, transmission repair remains one of the most expensive maintenance repair jobs a vehicle owner can expect to pay for in the lifetime of a vehicle. By offering both a strategy to combat the sticker shock and a way to ease the burden of payment, AAMCO’s new consumer financing platform has enjoyed success right out of the gate.

“We set out to find better consumer financing options to help our franchise owners convert more jobs into profit and sales, while at the same serve their customers in a much better way,” says Jim Gregory, CFO with AAMCO. “The first thing we did was to build a consumer financing program with Synchrony Bank, increasing our credit line from around $1,500 per approval to more than $3,000 per approval, which added about $20 million in sales for the AAMCO chain in 2015. But we wanted to go further — we wanted to build a credit platform for all consumers, whether a customer has great credit or a customer has poor or no credit.”

AAMCO is currently in the process of rolling out a national consumer financing platform. By simply filling out information on a kiosk found in an AAMCO center lobby, customers will have immediate access to credit approval for transmission repair from two separate financial institutions.

“The platforms we have launched nationally are getting more than 75% approval of credit to customers, which is a number that will increase as we continue to roll this initiative out,” Jim says. “The average approval amount for those customers is over $2,000 on average, which is a number we’re very happy with, as it helps our franchise owners increase their level of profitability.”

AAMCO franchise offers a simplified business model

AAMCO Auto Repair Franchise

While AAMCO remains the global leader in transmission repair, the auto repair franchise is charting a path to becoming the dominant brand for Total Car Care. To help AAMCO franchise owners get a bigger slice of the general automotive repair market, which generates $57 billion a year in sales according to IBISWorld research, the brand launched its “Trust” campaign to expand the public’s perception of what AAMCO can offer its growing base of customers. After all, if AAMCO is trusted to fix the most complicated part of a car, its technicians can surely change customers’ oil, fix their brakes and rotate their tires.

The leadership team simplified the business model by partnering with Global Powertrain Systems to build a remanufacturing facility on the site of AAMCO headquarters in Newnan, Georgia. AAMCO franchise owners can now purchase high-quality remanufactured transmissions from the remanufacturing facility; the company can deliver a remanufactured transmission to more than 70% of its franchisees the day after the order is received. This gives AAMCO franchisees immediate access to a vertically integrated supply chain with preferred pricing, and it helps keep overhead costs low while AAMCO franchise owners are focusing on increasing their profitability in the Total Car Care segment.

“All of the investments that we have to make our stores more profitable and easier to run is ushering in a new era of record growth for AAMCO,” says Brian O’Donnell, Senior VP of Franchise Support with AAMCO. “At the end of May 2016, we already have more deposits for new AAMCO centers than we did for the whole of 2015. The real positive of that, is that more than 50% of the deposits for new AAMCO centers comes from existing franchise owners. They have experienced the simplified business model, as well as the benefits of our partnership with GPS. AAMCO centers have never been easier to run, and existing franchise owners are opening up their second, third or even fourth store. We’re thrilled that our investments into simplifying our business model continue to make a positive impact for our franchise owners and helps them scale their businesses.”

Bring the iconic auto repair franchise to your community

With nearly 700 auto repair locations across the country, AAMCO has remained a dynamic part of American car culture — as well as a vibrant part of hundreds of local economies — since we began franchising in 1962. AAMCO continually invests in the franchisee experience and network infrastructure to ensure that our auto repair franchise owners know every aspect of their business and have the tools to maximize their profitability.

AAMCO is actively seeking single- and multi-unit operators who are passionate about the brand and committed to providing the highest-quality service. Interested candidates should have a minimum net worth of $250,000 and liquid assets of at least $65,000 per unit. Depending on the real estate selected, franchisees can expect the total investment to be approximately $227,400-$333,000, with a $39,500 initial franchise fee. Reduced franchise fees are available for honorably discharged veterans.

“For the AAMCO brand to remain successful going forward, we need engaged owner-operators who are excited and passionate about this business,” Brett says. “It is extremely important in the Total Car Care marketplace, which is our space, to have very customer-focused owner operators who love to build teams and are passionate about our great national brand. Our auto repair franchise owners find success in making our national brand feel very local as they serve the communities around their stores.”

Learn more about AAMCO

For in-depth details about the AAMCO franchise opportunity, download our free franchise report. You can also learn more by visiting our research pages.

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