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Utilizing Used Buildings

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When looking to expand, there are two options. Build from the ground up, or use an already existing structure. While in many scenarios, constructing a building from scratch is the most desirable option, not every business will have the resources to do so and not every community will have space for one. So what should owners hoping to expand evaluate when looking at an existing building?

“A lot,” says Edward Hymes, president of Jiffy Lube. 

The Challenge

For any business, whether it’s a national brand like Jiffy Lube or a young and developing MSO, careful consideration and hours of site visits are spent to find the exact facility, both from where it sits geographically and what's inside the four walls. The challenge is finding the best building that fits your business’s needs. 

The Solutions

Location, location, location. 

This is the first step regardless of whether it’s a new build or repurposing an existing structure, Hymes says. Where the business sits has a great influence on whether it will be successful. Hymes, and his Jiffy Lube colleagues, look at a litany of factors when considering where a shop should go. 

Does this population need a quick lube? Is this area of people going to spend money servicing their car? What is the traffic count? Will it be aided by other retail in the space? Is there an opportunity for synergy with other car care services?

“The last piece of it is probably the competition as well,” Hymes says. “You really need to take that into account of where they’re placed and where you’re placed in relation to not only the population growth but the traffic flow as well.”

All of these are questions that need to be answered, and it’s not a one-size fits all discussion. Jiffy Lube has locations in all 50 states, both in rural and urban areas. There are no specific benchmarks that must be cleared, but all the factors need to be understood. 

Make sure it fits the desired business model.

Jiffy Lube diverts a bulk of expansion resources into new builds. The main reason behind that, Hymes says, is it allows them to make sure their desired business model is carried out exactly how they want it. When going into an already existing location, unless you have the resources for a total remodel, it will likely require some concessions to the “perfect layout” you have in your head. 

So when Jiffy Lube does use an existing building, there are several things the location needs to have to fit their business model. 

First is bays. At minimum, Jiffy Lube needs three drive-in service bays, but Hymes much prefers it if it has at least four or five. Especially as Jiffy Lube prioritizes secondary services, those secondary bays have become very important, he says. For other businesses, three bays might be the right amount, or even too many, but for Jiffy Lube, that’s the ideal number. 

It also must have an attractive and comfortable lounge for our guests. That is a linchpin of any successful Jiffy Lube, Hymes says. The company is not afraid to remodel buildings to fit these goals, but some locations just don’t have the capacity for it. 

“I think it’s no different than what any other retail business would be looking at,” he says. “The site has to flow. It has to fit with the service center. There has to be the right access and a consumer base.”

Understand the previous business. 

For Jiffy Lube, its brand has become synonymous with the quick lube industry. So its risk in opening a new location is less because the brand follows with it. For that reason, Hymes is confident that any new location will do well, regardless of how the business it is taking over was doing. 

However for smaller operators, understanding the successes and failures of the previous ownership is important when deciding to buy the building and/or business.

If the business was struggling, chances are there is a good deal to be had when acquiring the location, Hymes says. However, make sure those struggles are something you’re aware of and you feel comfortable potentially dealing with once you take over. If the potential acquisition is a successful business, understand the price will come with a premium. It will also be important to win over the existing customer base once a new brand is introduced.

If the building was vacant, and a new quick lube is moving in, then ask yourself, “why is it vacant?”

The Aftermath

After looking over all the factors, making a decision is the next step. Understand whether the building is available to own or just rent.  Roughly 80 percent of quick lubes buildings are rented, says Mike Baynes, president of Auto Sales Inc. So especially if a shop is acquiring another shop along with the building, understanding the building’s lease terms are pivotal. Don’t assume the shop owns the building. 

The Takeaway

The physical building and the location of the building is just one step in the process of having a successful quick lube. A shop can have a space that fits all its needs and sits in the best spot in town, but if the customer service isn’t strong, or the product isn’t dependable, it won’t matter. At the same time, the right building and location is a pivotal component to developing a strong business. Make sure that whatever building is chosen, it meets the company’s standards for location, adds

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