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The following is a list of commonly asked questions about the auto repair industry and the Merlin Opportunity. Submit the electronic Preliminary Summary form or contact our Merlin's Franchise Development department at 1-800-MER-LINS.
More information will be immediately sent to you. |
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| # 1 |
What is so special about the automotive service business?
The industry track record of the last fifty years has been excellent in terms of economic opportunity. The reason for the industry's long-term success, in large part, rests in the fact that the American public is dependent on automotive transportation and, as a whole, is very concerned about motoring safety and dependability. In turn, the maintenance and repair of automobiles has been described as a "Basic Need" business and can be compared to other necessity industries such as food, clothing and shelter. |
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| # 2 |
Why will the automotive service industry continue to prosper?
New cars cost a lot of money. The average age of the cars and light duty trucks in use currently exceeds 9 years and continues to increase each year. The average annual number of miles driven per vehicle increases each year. The number of vehicles in use during 2007 exceeded 235 million in the United States alone and continues to grow. The complexity of consumer lifestyles and scarcity of personal time continues. Increasing numbers of people just don't have the interest, the ability, or the time to repair their own vehicles by themselves. |
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| # 3 |
Why is the automotive service industry attractive to small business entrepreneurs?
There are three fundamental reasons:
1) No dependency on minimum wage labor.
2) Limited hours of operation (no 16 hour days).
3) The attractive business economics associated with a service business.
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| # 4 |
What services and products are standard at Merlin 200,000 Mile Shops?
Within the automotive service industry, the Merlin chain was classified as an undercar specialist, but has evolved to become an "automotive longevity specialist." Therefore, Merlin shops offer all the products and services of a typical undercar shop and tire store plus has a proprietary maintenance program known as THE DRIVE FOR 200,000 that not only covers vehicles thru the manufacturer's warranty period, but to 200,000 miles and beyond. Merlin services include (but are not limited to) the replacement of brake systems, muffler and exhaust systems, shock absorbers, steering & suspension components, lubrication services, wheel alignment, air conditioning and cooling system service, starting/charging systems repair, tires, tune ups, fuel system service, and other maintenance services. |
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| # 5 |
In terms of a business opportunity, what additional advantages do the 200,000 Mile Shop services have over other types of automotive services?
The gross profit margins are superior to many other automotive service categories. Furthermore, these services do not require as large a capital equipment investment, nor do they have the complexities or "headaches" associated with more hi-tech services. Most importantly, because of the breadth of services offered, Merlin shops are better able to serve more and more of the customers’ needs and in turn, establish a greater number of long-term ”regular repeater” customer relationships.
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| # 6 |
What will the franchise cost?
The initial franchise fee for a single shop is $30,000. The Merlin equipment package costs approximately $150,000, and opening inventory amounts to $30,000. Start up expenses and working capital will typically bring the total investment to about $250,000. A good portion of the initial investment can usually be financed. |
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| # 7 |
How much up-front cash is required to secure an individual franchise under the Merlin program?
In most cases, a qualified candidate will need a minimum of $50,000 in cash. However, the exact amount will depend on the background of the individual, his or her financial resources and overall business plan. If the candidate qualifies under Merlin's FASTRAK program, Two Language Program, or is a participant in the Entrepreneur Development Program, the initial cash investment could be significantly less. |
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| # 8 |
What special qualities and skills does a Merlin franchisee (or shop manager) need to successfully operate a Merlin shop?
High energy level and good work ethic. Ability to concentrate and follow a system. Good verbal communication skills. Successful management experience. Basic understanding of business economics. Sales and marketing aptitude. Ability to lead and motivate employees. Integrity. Dedication to the customer. |
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| # 9 |
Why is dedication to the customer so important?
Because, quite frankly, Merlin shops are not in business merely to fix cars. Our purpose for being is to satisfy the needs of our customers. Cars do not have dollars. People do. Without a large base of regular repeater customers, sufficient sales levels do not happen. Successful auto service business owners must be focused on and dedicated to serving customers in order to build that base. They must be willing to do whatever it takes to create strong customer relationships. |
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| # 10 |
How much money can I make?
Not a lot at first. The answer depends on several considerations. The amount of energy and time you will put into your business. The degree to which you follow and execute the Merlin operating system. Your ability to recruit, develop and lead employees.
In other words, your profits will be determined on how quickly you grow your business, to what extent its sales volume exceeds a "cash flow break even point" and to what extent you are effective in controlling expenses. It depends on you and how consistently you apply yourself and implement our operating system. Only you can answer this question. At our initial meeting, we will give you sales statistics as well as the tools and introductions with which to research the business economics and determine the profit potential. Discussions with existing Merlin franchisees will be instrumental. However, just the sheer number of Merlin shops suggests that reasonable profits are possible. |
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| # 11 |
Where would my Merlin shop be located?
Merlin shops are generally located in high growth areas that are being "underserved" by the competition. We currently have a number of approved locations from which you may make a selection. If you have a location of your own or one available to you, we will be glad to evaluate it. Selection of a site is always subject to mutual approval. |
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| # 12 |
Who will find and develop the location?
We will. In most cases, we will lease the location from a third party and sublease to you. |
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| # 13 |
Why do most Merlin shops have five or more service bays?
Most individuals we interview relative to the Merlin opportunity are interested in a "business franchise" rather than a "buy yourself a job" franchise. The realities of the 200,000 Miles Shop service business (particularly the longer service times relative to brake repair) are such that a minimum of five-bays is paramount to handling the sales volumes necessary to achieve attractive returns on investment. Customer traffic patterns are generally inconsistent on an hourly basis, and business tends to come in "rushes" at certain peak times. In order to accommodate customers and maximize sales, it is necessary to have an adequate number of service bays. Five or more bay facilities offer a much better work environment for shop employees and are far more efficient than smaller size shops. Furthermore, the rent cost for a unit with five or more bays, in terms of rent per bay, is generally less than a four-bay or smaller unit. |
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| # 14 |
What is the biggest challenge in the business on a day-to-day basis?
It varies from shop to shop, but, like many retail service businesses, a large number of Merlin franchisees, as well as many of our competitors, would say the answer is recruiting, motivating, and retaining shop employees. We agree. |
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| # 15 |
What about ethics, honesty in selling, and the questionable reputation of the automotive repair industry in general?
We acknowledge that the industry as a whole does not have the best image with consumer groups, government agencies, the media, and many individual consumers. Some of our competitors have fallen short of customer respect and basic ethics. On the other hand, Merlin has consistently over the years been one of the honest alternatives for the driving public. Our mission, as well as our training, has always been focused on building long-term customer relationships, giving options in the sales process and, in turn, securing referral business. As a Merlin franchisee, you will never be expected to mislead or otherwise take advantage of a customer. |
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| # 16 |
What's the difference between Merlin and the other undercar service chains?
Why choose Merlin? It may be that there are several answers to this question. One might be that we concentrate much of our efforts on individual shop success as evidenced by the fact that the annual sales per Merlin shop statistic continues to grow each year and that it is much higher than at least three competitor chains twice our size. Perhaps, it is the way we go to market and our overall business philosophy. (We focus on building long-term customer relationships instead of maximizing one-time sales transactions.) Or, because we are not the biggest. Or maybe, the answer is that we do not approve everybody as a franchisee, nor are we a good fit for every applicant's life strategy. However, the best answer is the one you determine on your own as a result of your observations during our initial meeting, as a consequence of your independent research, and as a conclusion from your discussions with Merlin franchisees (and, perhaps, competitors). Your answer to question #16 is far more important than any of ours. |
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| # 17 |
How soon can I be in operation once I have been accepted as a franchisee?
Location is the determining factor. On a new and "contract-controlled" location, construction normally can be completed in 120 to 150 days, subject to building permits and zoning requirements. In the case of an existing operation, this time period could be as little as 75 days. |
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| # 18 |
I would like to know more. What is the next step?
Let's get started! Simply click here to fill out your information!
Or you can contact our Merlin's Franchise Development department at 1-800-MER-LINS. More information will be immediately sent to you. In turn, if we sense a potential fit, you will be contacted to set up a personal meeting at our corporate office. During this meeting, mutual goals will be explored and detailed information will be exchanged. Such a meeting is purely exploratory and does not obligate you or Merlin's Franchising, Inc. in any way. |
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