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MAY 2008, Volume
23 Issue 5
Franchise News
No cap on truck
accessory market
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Cap-it's Langley headquarters: franchise
specializes in light truck accessories.
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Automobile sales may be sluggish, but demand for customized vehicle accessories continues to accelerate.
"For work trucks, outdoor adventure trucks or just great looking trucks and SUV's, accessorizing is a huge trend," said Robert Skinner, VP franchise development for Langley-based Cap-it International.
Founded in 1977 by Hank Funk, Cap-it is a unique franchise concept that specializes in the supply and installation of light truck accessories.
Franchising since 1990, the company has carved a unique niche within the automotive industry by consolidating products within a traditionally fractured market segment under one roof. As a result, one of Cap-it's primary strengths is buying power - which enables the franchisor to supply independent dealers with product at wholesale. Products sold in stores include truck canopies and covers, racks, off-road suspension, tires and wheels and specialty lighting, as well as performance products such as exhaust systems, power chip and air intake systems.
"Store operators get to deal with people that want to decorate and/or increase the functionality of their truck to fit their lifestyle," Skinner said. "Everyone likes their toys."
While previous automotive industry experience is considered beneficial, the company will train prospective franchisees from scratch.
A case in point is Richmond Cap-it franchisee Arnold Okano.
Prior to buying into the Cap-it concept, Okano had no retail experience and possessed little technical automotive skill. He was, however, committed to building a successful business. Okano explored various fast-food and other small-business franchise opportunities before deciding on the Cap-it concept.
"What attracted me was a franchise system where they had the expertise to pass on to an inexperienced franchisee," said Okano. And, "back then they didn't have the training program they have today, they have come along way."
Cap-it has developed a comprehensive training program that includes a sale and product knowledge training centre, online access to Cap-it University, plus a customized installation-training garage.
Okano serves as a testament of Cap-it's proven business model. Six years ago, he doubled the size of his store, and sales have continued to rise. Consumer demand has also shifted, with business currently driven more by contractor and trade industry professionals than individuals customizing vehicles - something that Okano attributes to the booming construction industry.
The startup investment required for a Cap-it franchise can vary substantially - ranging from $325,000 to $395,000, or even higher. Factors such as store size, lease and site conditions, geographic location and municipal requirements all impact startup costs. "The size of stores in major markets will vary from 8,000 to 12,000 square feet, and small markets will be about 6,000 square feet," said Skinner.
Regardless of store factors, prospective franchisees should plan to have approximately 75 per cent available in cash, Skinner said. They can also expect to pay royalty fees of 2.5 per cent of sales, along with marketing fees.
Franchise taps into
online printing
As e-based media technology becomes more ubiquitous, marketing professionals are increasingly faced with difficult decisions on how to best allocate marketing dollars between traditional print and electronic options.
"Marketers are starved for a solution that integrates print and electronic media while fostering brand consistency with personalized messaging," said Jeff Prettyman, executive vice-president and director of marketing of Wise Business Forms Inc. (WSI). "Printing has become a component of a much broader marketing initiative, often involving database management, variable data printing, Web design, direct mail, e-mail and campaign analytics. Corporations continue to reduce the number of vendors they engage, in favour of those that can supply more one-stop options."
Ontario-based WSI, which this year was named the number 1 Internet business in Entrepreneur Magazine's 2008 Franchise 500 listing for the eighth consecutive year, is hoping to capitalize on their Internet marketing experience and on the convergence trend.
The company has introduced a new "Bolt-On" Internet marketing franchise module to help print business owners merge electronic media with their current operations.
"Traditionally, printers have been the go-to guys for their client's branding, marketing, designing and printing requirements," said Terry Kozachenko, development director, graphic communications for WSI. "With the increasing demand for personalized campaigns ... printers are realizing that they should be marketers if they want to remain relevant."
Many printers, and others within the graphic communications supply chain, agree and are starting to explore options.
Mario Gonzaga, president of Richmond, B.C.-based UNO Digital Printing, is one example. Three years ago, he recognized the importance of tapping into the convergence trend and has been testing various options ever since. He is not convinced, however, that franchising is the best solution at all.
"Why would I tie myself into a franchise where I have to pay a franchise fee and royalities?" Gonzaga said.
Kozachenko notes, though, that many printers simply do not have the depth and breath of knowledge to properly provide clients with the right solution.
WSI's $49,700 franchise fee allows franchisees to tap into a network of 1,500 offices and 12 production centres in 87 countries. The company also provides training and ongoing technical and market support.
- Compiled by Laura Nastasa |
