New Quick Lube Operator HELP

[mdbarba]

So I'm building a small commercial plaza near a "new" residential zone in need of services. one of the businesses in this plaza will be a quick lube I want to operate.

Ive talked with a couple of ppl. Castrol and Valvoline seem to offer some interesting franchise like programs that don't charge a royalty but give support and at the same time a franchise look. Since I am just starting the research phase any information would help a lot.

I had a meeting with the Castrol guys in my area (Hollon Oil Company) they seemed helpfull and interested in helping me develop this project.

I am also wondering what the best set up would be? I am thinking o a 2 to 3 bay set up.

What will the cost of equipment from tools, dispensing system, pos computer system, the whole 9 yards?

All coments and info are welcome!

thanks!

 

[robert roman]

“….building a small commercial plaza….one of the businesses in this plaza will be a quick lube I want to operate…what the best set up….What will the cost of…..the whole 9 yards?

In most markets, a 2-bay “express lube” is no longer commercially viable due to cost to build and competition.

Most new lubes today are either free-standing 3-bay “full-service” oil change or one component of a multiple-profit center operation (i.e. c-store, gas, carwash. etc.).

Full-service means express oil change plus fluids exchange (radiator, transmission, differential), tire rotation and balance, tune-up, filter replacements, wipers, light bulbs, battery service, belts, minor repairs, etc.

2-bay “full-service” oil change requires 2,400 SF building and 13,000 SF pad site.

Cost depends on approach; block and mortar with underground pits or modular with above ground zip-pits. Standard equipment package is about $25,000 per bay.

Benchmark has expense ratio of 70 percent of gross sales which does not include debt service. So, break-even is about 20 cars a day.

License operating agreements may not charge franchise fee or monthly royalties but most require an oil contract (i.e. 10-year) and equipment lease (i.e. 6-year).

Also, don’t expect the same level of training and technical support as franchise.

Most banks will want to see net worth of between $150,000 and $400,000 in liquid assets.

Hope this helps.

 

[mdbarba]

"Most new lubes today are either free-standing 3-bay “full-service” oil change or one component of a multiple-profit center operation (i.e. c-store, gas, carwash. etc.)."

Yes, i agree the idea is to offer all "add on" components and quick same day tune ups and light mechanical work. As well as state inspection which i understand does not make money but is a good to sell the add-ons and services offered at the shop, which from what i understand is the real money maker.

What companies do you recommend i contact to get a detail list of equipment needed and budget.

And what other things are important for me to investigate at the pre-construction phase.

thanks for all your help!

 

[robert roman]

“What companies do you recommend i contact to get a detail list of equipment needed and budget.”

You mentioned Valvoline and Castro so why don’t you ask them.

“And what other things are important for me to investigate at the pre-construction phase.”

One important thing is to determine if there is public need for a new lube based on analysis of demand/supply balance.

At a minimum, this would include calculation of the anticipated average number of lubes per day.

Dealers and consultants have models of sales assessment for this purpose.

Model calculates average number of oil changes as a function of estimated number of light-duty vehicles within trade area, average number of oil changes per vehicle, national average DIFM market share, quick lube DIFM market share and number of competing lubes in trade area.

There are also other models like analogue-based, gravity model, etc.

Once you have reasonable estimate of site yield, it will serve as basis for pro forma financial projections.

Hope this helps.

 

[MEP001]

Texaco has a franchise program and along with it your customers can use their Texaco/Shell card.

 

[packerscw]

Servicechamp.com does a lot in quick lube

 

[Scrub Free]

My opinion is to steer clear of valvoline. Guess it could have been just the distributor, but they were super agressive and kept spiking prices. It was constant maintenance to keep prices in control. We use mighty distributing now and price is consistently competitive.