Car Service City has proven itself to be a robust and resilient operation, having not only survived but thrived in a tough economic climate. With the economy once again on shaky ground, Entrepreneur spoke to company founder Grant Brady to find out exactly what makes the brand such a solid investment.
Car Service City was founded in 2004. As you undoubtedly know, the global economic crisis hit in 2008, a mere four years after the business was launched. For a young company this is a worst-case scenario.
Establishing and growing a business is hard even at the best of times. When the economy contracts, it can become nearly impossible. Indeed, many companies failed during this time.
But Car Service City didn’t fail. In fact it flourished. Over the last decade or so, the brand has grown massively, now boasting more than 60 franchises nationwide. How did the company manage to buck the trend? Entrepreneur spoke to Car Service City founder Grant Brady to find out.
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Car Service City has been around for more than ten years now, and it was still relatively young when the 2008 recession hit. What makes the business so robust and resilient?
We believe our business is recession-proof for two reasons. First, road transport is the main method of transport for South Africans. Because we use our cars so much, we need to keep them in top condition. The maintenance of vehicles is therefore key to keeping them on the road and running smoothly.
This is particularly important when you consider the cost of fuel. Well maintained vehicles will always have a better fuel consumption than their poorly maintained counterparts. Our offering therefore services a large need in the consumer market. We have affordable service guaranteed, the best service at the best price is what we do.
According to South African statistics, the live vehicle population for cars and station wagons is nearly seven million, which means seven million drivers need affordable vehicle maintenance and service offerings. Car Service City’s mandate to say what we do, and do what we say, along with top-class mechanics and exceptional and affordable service, makes us a strong brand in a world where ‘one-man-band’ mechanics have earned a poor reputation.
Even early on, we managed to create a recognised brand that consumers knew and trusted. We spent a lot of time crafting a marketing strategy that would make Car Service City a recognisable entity. A good example is our ubiquitous ‘flyer guys’, who hand out flyers at traffic lights.
Just about everyone knows what Car Service City’s flyer guys look like. This is one way in which we created a strong brand. We’re much larger and more established now, but we still believe that marketing is crucial. Building a brand is an ongoing process.
Another reason Car Service City is a robust and resilient brand is the thorough and careful selection process that all potential franchisees go through. We don’t necessarily demand loads of business or automotive knowledge, because our head office ensures that each branch is equipped with the trained operators necessary to carry out what our brand says we will deliver, which is affordable service guaranteed.
Company culture is also incredibly important for us. We spend a lot of time making sure that anyone who enters the organisation shares our passion and commitment. It’s all about culture fit. We’re looking for people who will embrace our systems and processes and really live the brand.
A third factor is head office support to franchisees. Any franchise business is only as good as its franchisees. You can’t succeed if your franchisees don’t succeed, which is why we offer training to franchisees and their staff on an ongoing basis. We also make sure that they keep up with the latest trends and stay at the forefront of technological advancements. You can’t allow yourself to become complacent. You always need to move forward, otherwise you’ll get left behind.
Growth that isn't carefully managed can be impressive in the short-term, but can end in disaster when it comes to the long-term. What is Car Service City’s approach to sustainable growth?
We have shown very good growth over the last ten or 11 years, but we’ve always been careful not to make growth our only goal. It’s easy to just bring a bunch of new franchisees on board and grow your network quickly, but that kind of growth isn’t sustainable. As mentioned, we make sure that we choose franchisees who will fit in well with the organisation and have a good chance of making a success of things. This takes time, but it’s worth it.
At head office, we never let the growth of the network outstrip the other aspects of the business. It’s important that we are able to supply the necessary help and support to our franchisees, and this means having the right structures, systems and processes in place. So we try to let our ability to provide full support to the entirety of our network dictate the speed of our expansion.
We could grow quicker if we were more aggressive, but we are interested in managed growth that is sustainable.
The group has managed to grow its footprint year-on-year since inception, and we are on track with our growth strategy. We currently have 61 outlets nationwide, and this will hopefully increase in the coming year.
Car Service City seems to have a business model that would be more resilient than most. After all, people need to have their cars serviced, even during tough economic times. Is this true? How do you view Car Service City’s position, given the current economic climate?
This is certainly true. We’re in a great position, in that our business model works, regardless of whether the economy is up or down. When times are tough, people hang onto their cars for longer. They’re more careful with their big investments, which means they service and maintain their vehicles better.
When times are good, they sell their cars, which then enter the second-hand market and still need servicing. So we offer something that is always in demand, which puts us in a great position.
I also believe that people tend to gravitate towards brands that they know and trust, especially when times are tough, and Car Service City is thankfully a brand that resonates with consumers. Through our consistent offering and affordable service, marketing and excellent customer service we have created a strong brand presence throughout South Africa. Car Service City is a name that people know and trust.
From head office we ensure everyone has the necessary skills to provide affordable service to customers. It’s up to us to ensure that franchisees and their employees are able to deliver on our brand promise — affordable service guaranteed.
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As a franchisor, how do you view your role when it comes to assisting in the success of franchisees? How do you ensure the success of franchisees, even when times are tough?
As stated earlier, we don’t believe in just offering initial training, and then leaving franchisees to fend for themselves. We offer continuous training, and also help with the day-to-day running of a franchise by providing proven systems and processes that simplify things.
That said, we realise that franchisees are unique. Needs are different. So we try to help in any way we can. We assess each franchised branch individually.
How do you see the business evolving over the next five or ten years? What will the industry look like? What will Car Service City look like?
The automotive industry is always evolving, and we’re determined to keep up with this change. Car Service City will adapt its systems and processes as required by the industry. Because of the culture of our business, we are able to stay ahead of the curve and stay up-to-date with industry and technology changes.
As for Car Service City itself, we will continue our growth and expansion. However, we’re determined to make sure that this is managed growth.
What, in your opinion, makes a Car Service City franchise a solid investment?
We’re fortunate in that we operate within something of a recession-proof industry, but it’s about more than that. In my opinion, one of the biggest reasons that Car Service City is such a solid investment is the level of support offered by head office. The help and support we offer stretches across marketing, IT, human resources, legal, branding, etc.
We ensure that franchisees are able to keep their promises to their customers. Head office ensures that staff are skilled and equipped to handle their roles at Car Service City branches across the country, from managers to secretaries and mechanics.
Solid investments require solid foundations. We focus on getting the basics right. South Africa’s vehicle-dependent environment means that we offer a much-needed product, but the reason we are chosen above our competitors is that consumers feel that we are trustworthy, and that their cars will be serviced and maintained without being taken advantage of or ripped off.
Another reason Car Service City is successful is its strong brand. Having a recognisable name that consumers know is very valuable and providing a service that there is a high demand for in South Africa means that we are a name associated with affordability and trustworthiness. It just makes it so much easier to get up and running. You don’t need to ‘prove’ yourself to the same extent that an independent operation does. You have the strength of the name behind you.
Finally, Car Service City provides a proven business model that offers potential franchisees a truly excellent chance at success. Over the last decade, we’ve greatly refined our systems and processes. The recipe works; new franchisees just need to follow it.
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What does a franchise cost?
|Training and software
||R4 000 excl. VAT
||2,5% of TO p/m
||5% of TO p/m
R950 000 to
|Average time to break-even
For more information,
email [email protected], visit
www.carservicecity.net, or call +27 (0)11 883 3687.
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