One day in the early ‘80s, RJ came back from a car race in Atlanta, where he had visited one of the very first Jiffy Lube locations. He told us we were going into the business. Quite frankly, we thought he was nuts. Remember, this was at a time when you changed your oil yourself or took your car to your dealer. Who needed quick lube? RJ said, we are going make fortune doing this. He was right.
Richard Brown, Partner MBA and Lube 495, Inc.JIFFY LUBE
Introducing quick-lube to New England
The Concept
Introduce Jiffy Lube in New England and change the way people change their oil, with ten-minute, on-demand oil changes in small, dedicated locations throughout the region.
The Plan
At the time, in 1984, Jiffy Lube was offering only single location franchises. RJ Valentine was not going to settle for one location. He convinced the parent company to sell him the rights to develop the entire Boston ADI – the first agreement of its type in the United States. This gave his development company, Lube 495, the rights to build Jiffy Lube service centers throughout greater Eastern Massachusetts and beyond.
The plan was to build multiple locations throughout the region, to take a commanding market share before any other quick lube operation could enter the industry.
The MBA Group Differences
If any story best demonstrates the way MBA breaks rules to achieve success, it is the Lube 495 Jiffy Lube story.
The parent company recommended located in cost-effective locations on secondary roads in smaller communities. We chose high-profile locations on major thoroughfares in densely populated suburbs, which came with a higher cost – and, we believed, greater potential.
The parent company also recommended minimal advertising, based on local newspaper insertions. We spent approximately three times the recommended amount on advertising. We included local newspapers, of course, but did not stop there. For Grand Openings, we also sent direct mail to every resident in the community, with discount coupons for opening day. We ran radio commercials – and included live remote broadcasts from the store on opening day. The result? For our first Grand Opening, in our hometown of Braintree, MA, we served more than six times the national average of opening day customers.
In stores opened later in our chain, we blew away national averages, with 400-500 customers arriving on the first day of operations.
The MBA Group differences continued with a level of training and service unequalled in the industry. Our customer service brought people back to us again and again, with virtually no service errors or complains, shown by 94% customer satisfaction rates.
The results
Although the parent company was concerned about approach, we proved the validity of our choices by achieving profitability in ¼ of the time of Jiffy Lube locations in other regions: 9 months vs. 3 years.
We rapidly became the largest, fastest growing area franchise in the international chain.
The exit
When we sold the franchise to Pennzoil in 1993, we were a formidable competitor: a $25 million chain of 30 stores, including the #1 grossing Jiffy Lube in the world and six of the top-10 grossing Jiffy Lube services centers in America. Pennzoil was so anxious to own our territory, they made an offer we could not refuse – allowing us an exit based on 18x multiple earnings and 3x income.
For more on the success of that exit, please contact us.