Welcome to Franchise Talk with Emery Orosz, Industry Specialist in buying and selling franchises presented by Morgan & Westfield, a nationwide leader in business sales and appraisals. Here’s your host, Emery Orosz with today’s special guest.
Emery: Good afternoon. I’m Emery Orosz with Morgan & Westfield.
Ben: Hi, Emery.
Emery: How’s it going?
Ben: Business is going very well today. How are you?
Emery: Good. I’m doing well. Beautiful day out here in Santa Fe, New Mexico. Sun shining, so it’s all good. But I wanted to welcome you to Franchise Talk.
Ben: Well, thank you. Happy to be here.
Emery: Appreciate it. Well, it’s nice to have you. And I just want to let the audience know that we’re talking with Ben Reist. He’s with the Moran Family of Brands. He handles all of their development for all of their franchises for the whole Moran Family. He’s also their Qualification Specialist. But Ben, I’d like to hear from you a little bit about yourself, if you don’t mind.
Ben: Yeah. Thanks, Emery. I am with Moran Family of Brands, so as Emery said, of course I’m a Qualifications Specialist. I handle all of the new developments and the retails through my office for each one of our brands. Moran, we actually offer four different franchise concepts. I’ve been with Moran since 2010, so almost five years. All of my experience in franchising has been with Moran. My background is actually ad sales, advertising sales and particularly working with small and medium-sized businesses. So there were a lot of transferrable skills with this franchising world, when I came on board, and I really enjoyed Moran, and the people I work with.
Emery: So you’re coming up on your fifth year anniversary. Congratulations.
Emery: So for those in the audience that may not be familiar with the Moran Family of Brands, tell us a little bit about the different brands under the Moran Family umbrella, so to speak.
Ben: Sure. We have, as I said, four unique concepts. Three of those are in the automotive aftermarket. Two of those brands out of those three, are on the repair side of the business. They are Mr. Transmission, which is transmission and drivetrain repair, still very much a specialty need within the automotive repair sector. Then we also have Milex Complete Autocare. Milex, we intentionally scope to cast a wide net on that repair side; anything from an oil change and up to medium-to-heavy duty repair work, engine repair; so anything that falls under that Milex brand. The only thing Milex does not service is transmissions.
Those are the two repair brands. And then, we have an accessories brand, Alta Mere Automotive Outfitters. And then a fourth brand that we built and launched, really based on our experience in the window film side of automotive application with Alta Mere…we launched SmartView Window Solutions, which is residential and commercial window tinting. So four unique concepts that we offer. We’re going to talk of course, I believe, Emery, about Alta Mere and SmartView, but then talk about what makes Moran unique in the different type of cobranding options that we provide.
Emery: Well, you’re absolutely right, Ben. We’re on the same page, and just focus on two of the brands as you mentioned today, Alta Mere Automotive Outfitters and SmartView. So if we could, let’s talk about Alta Mere first and what they do.
Ben: Sure. Alta Mere is in the automotive accessory space and before we really dig into Alta Mere as a concept, I think it’s important to touch briefly on the industry as a whole. The accessories business is really fragmented. And it’s chopped up in a couple of different pieces. And you’ll see window tint shops. You’ll see stores that like to focus on only electric, maybe stereo, sound systems, alarm, remote starters. And then you get into more of a custom or a bolt-on accessory or truck accessory, running boards, lighting. And so the accessory business is really fragmented and what we did with Alta Mere, we looked at the market to see which has the greatest margins. What products are really moving, what’s happening in this innovative industry, and build these brands to consolidate a fragmented industry.
So Alta Mere has three main product lines within this one brand. And it’s automotive film, window tinting and clear coat paint protection film, electronic accessories, remote starters, alarm systems, a lot of safety products are becoming very popular now, GPS tracking, blind spot detection, text blocking is really critical and back up cameras, as I mentioned. And then, the third, final one, is what I deem a catch-all category. This is your bolt-on accessories, your custom truck accessories. And the two of the vendor relationships can open up a lot of opportunities for our franchisees to really focus on that third and final one.
The accessory business is really fragmented and what we did with Alta Mere, we looked at the market to see which has the greatest margins.
Emery: You’re absolutely right about the fragmenting in the industry here in Santa Fe. I drive down the main drive and I see places that offer just window film, window tinting and that’s it. And you’d have to go to another place if you wanted a bolt-on product, like a running board. So a great idea is taking all these fragmented segments and bringing them into one place, it’s a one-stop shop for pretty much all of your automotive needs.
Ben: It really is on the accessories side. And it’s interesting because it opened you up to a lot of different customer profiles. And so, it’s a broad market base. It’s not a very specific niche. And a couple of things that we have seen to support that is, of course, you’re going to get your early adopters. So they really like the latest and the greatest, and they like to tune-up their vehicle, put the newest technology in even new vehicles. But if you step back and look at the market as a whole, the average age of cars is—this is passenger and light truck—11.4 years. So that’s an average model year of a 2004, a lot of these vehicles, they’re somewhat dated in the technology that’s in there. And so, we see a big demand of customers wanting to upgrade the look or the feel, the comfort and the technology. That’s creating a lot of opportunities for us on the accessory side of the business.
Emery: Yeah, so I have a question, Ben. So if I had an older model vehicle, and I wanted a backup camera, for example, could I go into an Alta Mere shop and get that installed?
Ben: Absolutely. Yeah, there’s a couple of different products to do that’s integrated, whether it’s a standalone video screen or even in a rear view mirror, where the video feed comes through that.
Emery: Okay. Because when I bought my car, it had that accessory or that option, that backup camera. And I couldn’t live without it. But I just wondered about some of the older cars out there that don’t have it. So you’ve answered my question for me. So it sounds like a fun business, something that people would really enjoy doing. It sounds fun to me.
Ben: It really is and that can be understated, Emery, when you’re looking at franchise opportunities, kind of what the lifestyle brings when you’re owning and operating that business. I always use this line and I stole it from one of our franchisees, because we have the repair business and the accessories business. He says, “This is the sexy business in Moran.”
Emery: Yeah, I would agree.
Ben: You’re going to a shop, getting your hands greasy, but it’s a fun business.
Emery: Yeah. And I’m sure every wants to know, Ben, what would it cost for a start-up, ground up, do you have any ballpark numbers for us?
Ben: Sure do. So this would include franchise fee, training, help you find a location to move into, and lease that space, signage, inventory, even working capital. So all in for an Alta Mere center is about $160,000.
We see a big demand of customers wanting to upgrade the look or the feel, the comfort and the technology. That’s creating a lot of opportunities for us on the accessory side of the business.
Emery: That’s a lot less than I would have guessed; $160k to get in.
Ben: Yeah, with working capital.
Emery: Okay. Well, it sounds like a great opportunity, especially here in my area. And this would fit right in and I’m sure all over the country, where the industry is fragmented, just bring everything under one roof is the way I see it, yeah.
Well, let’s switch gears a little bit, Ben, and talk about, we can come back and talk about the support and things like that a little bit later. But I wanted to talk about SmartView Window Solutions. Tell us about that.
Ben: So SmartView Window Solutions is residential and commercial window tinting. And this is not only a new concept for us, but a relatively emerging industry and product line for consumers. And it’s driven by customers looking to get a couple of benefits from this particular window tint. So I’ll talk a little bit about the benefit and then how it all came together. What the window tint provides is 99% blockage of UV penetration. So it protects against fade of furniture and flooring, and artwork. It also has a lot of the blockage of the solar heat transfer. So it can cut down on your cooling costs as well change the aesthetics, prevent glare or maybe you want to have some more privacy without sacrificing your view or getting out of the window. Those are the value drivers of this window tint. But the reason why it’s relatively new is that technology caught up to the demand, where the product that was out there was very similar to an automotive window film. And to get the same benefits, you really have to make your windows very dark. And while it was good on a commercial application, the residential market really does not want that—
Emery: I’m sorry, Ben, I didn’t mean to interrupt you there. Go ahead.
Ben: No problem. One last point there on that was it’s the development and actually ceramic film that allows us to take this project to the residential market.
Emery: Yeah, and what I was going to say, I know I’ve mentioned this before to you. When my wife and I built our home up in Coeur d'Alene, Idaho, we had—and it wasn’t as nearly as advanced as it is today—but we had it installed on our self-facing windows. And our friends would come over and say, “What’s different? It just feels different. It feels warmer, not warmer temperature wise, but just a warmer feeling.” And I said “It’s film on the windows.” It’s cut down UV rays. Our heating bills have gone down. And I said, “It’s amazing and it wasn’t that expensive.” So can you give us some idea of the cost, what it would take—the average, do you have an average ticket cost or anything like that for a home?
Ben: Yeah, it’s a higher ticket price than automotive film. It’s anywhere between $600 and $900 on average for the residential and commercial applications.
Emery: Okay. Because I think we paid—I think it was right around $900, but it was worth every penny. It was well worth it. So we spoke earlier about Alta Mere and the buy-in, a $160,000. What is it for SmartView Windows Solutions?
Ben: SmartView, all-in, one of the nice things about SmartView is that it can be operated as a home-based business. So it greatly reduces your overhead, it will lower the start-up cost. So all-in, it’s right around $70,000.
Ben: Which includes leasing your vehicle, getting your vehicle wrapped, startup marketing, and inventory, and working capital.
Emery: Okay. So $70,000, not bad in the franchise world. That’s relatively low. So is it possible that you could cobrand Alta Mere with SmartView? Open up a shop that did both?
Ben: Absolutely. And I think that’s what we, as Moran, the way these brands complement one another, to really provide a lot of value for franchise candidates. And that cobranding is really a great way to increase your revenue streams to your business without greatly increasing your fixed overhead or startup cost. So Alta Mere is a brick-and-mortar location. When you bring SmartView into that, it does a couple of things. But primarily, it allows you to just promote the SmartView business through your brick-and-mortar location, your retail location, in addition to doing all the other outside marketing channels that we have, the SmartView program. And it really does increase your start-up costs. And Alta Mere-SmartView cobrand center that gives you both brands, both revenue streams, all-in is about $190,000.
Cobranding is really a great way to increase your revenue streams to your business without greatly increasing your fixed overhead or startup cost.
Emery: Okay. But for the person that just wanted a home-based business. They could just go with the SmartView?
Ben: Yes, it can be operated as an owner-operator, where your role is to go out, promote the business, go to the home or business, and do the installation on site. However, we suggest having a sales person or a technician installer. So there’s some flexibility with how you launch this business from a labor standpoint. But ideally, it would have either the franchisee in the sales role or the franchisee in the installer role with a sales person.
Emery: Okay. So here, I know what everybody is thinking, “I don’t have any experience in any of this.” So what about the experience level and the candidate that you’re looking for? Maybe explain a little bit about that.
Ben: It’s a great question and something that you do not have to have industry experience with to be a franchisee within our system. Whether it’s the automotive repair brand or the accessory, or the SmartView window tinting brand, most of our candidates and our franchisees, if there is some kind of consistent traits, what I would call a hobby-interest in cars. It’s not necessary. You don’t have to have that. It would be consistent that maybe you did some wrenching years ago, you just like cars, you like being around cars. So that’s one of the traits.
But really, what we’re looking for is individuals that come out of mid-level or c-level corporate environments, have a lot of management and business development skills. It’s actually what your role is as a franchisee, not to be the hands-on person, but to be involved in promoting that business, marketing, advertising channels, and getting out and network within the community, to really ramp up the business.
Emery: Okay. So, one thing, Ben, that everybody asks me about when looking at a franchise is will the franchisor support me once I get in business or do they just sit back and collect their royalty fee? So what could the franchisee expect in terms of support?
Ben: Yeah, it’s so important. Moran provides a lot of support to our franchisee and starts right at the beginning with the site selection process of helping to identify our customer base is critical, and then looking at the demographics to establish a territory, whether it’s SmartView that’s going to be home-based or whether we’re looking at the brick-and-mortar needs of an Alta Mere location. It’s a combination of not just canvassing and finding available real estate, it’s understanding the profiles of the demographics in the market. So it really starts with site selections, and then on-going marketing and advertising support, giving you the ad copy, the strategies, whether it’s traditional channels and print media, direct mail pieces, a lot of web-based. Of course now, the marketing strategy that we implement, social media and, of course, on-going operating support.
That support really begins with the higher-end support that we provide. I think this is one of the most critical things that we do for our franchisees is not that we’re making a higher-end decision for our franchisee, but if you look at any one of our brands, there may be some intimidation of interviewing a mechanic or a tint installer. Are you okay with having that technical conversation? And if not, we can screen candidates, ask them technical questions, and provide that element of support to then pass to one of the franchisees, and go ahead and hire the ones that you like. And of course, the on-going operating support that a franchisee receives, to look at the numbers, cutting the cost and make sure that profit margins is maximized, all just part of the support that we provide at Moran.
It’s a combination of not just canvassing and finding available real estate, it’s understanding the profiles of the demographics in the market.
Emery: Well, anything else that you would like to tell us about why someone would give a serious look either Alta Mere, SmartView or cobranding concept?
Ben: Yeah, we talk about the emergence within this concepts, particularly on the film. We talked about the support that the franchisee gets. One of the other things that I think is important is the industry that we are a part of, and then opportunities that Moran can offer within this industry. We talk a little bit, Emery, about the average age of vehicles, the much older, that’s driving a lot of demand on the automotive accessory side. But on the SmartView side, the window film side, residential and commercial, it’s a fairly new product. It goes back about eight to ten years when we really saw this ceramic film enter the market, and become quite popular. So we get to be a part of something that’s emerging. That we’re doing some more education on what this is and what value it provides, and you, yourself, are part of receiving that.
And yeah, guests come over and they weren’t really sure what it was or what’s in it, and saw the benefits. It’s exciting to be a part of something like that, that is emerging or getting to build and grow with that. There’s also a lot of territory available for the Alta Mere brands and also the SmartView brand.
Emery: Yeah, and I want to let everyone know that once you listen to this podcast, if you have any questions whatsoever, call me. I’ll leave my contact info. It would be along with the podcast info. But Ben, I think you’ve given us a very well-rounded look at both of these brands, Alta Mere and SmartView Windows Solutions. So maybe next time, we could talk a little bit about Milex and Mr. Transmission.
Ben: Hey, I’d be happy to. Yeah.
Emery: How does that sound?
Ben: Yeah, that sounds wonderful. If you have me back.
Emery: Oh, absolutely. I’ve never kicked a guest off the show yet. So we’re good. But Ben, thank you again and we’ll talk to you next time.
Ben: Great. Thank you so much, Emery.
Emery: Thanks, Ben.
You’ve been listening to Franchise Talk with Emery Orosz, Morgan & Westfield’s expert in buying and selling franchises. If you’d like more information about selling or buying a business franchise, call Emery at Morgan & Westfield at 928-793-3000, or send him an e-mail: email@example.com.
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If you would like additional information on Moran Family of Brands, please call Emery Orosz at 928-793-3000.