Update: HiQ to Franchise Off 109 Equity Outlets

HiQ has unveiled plans to “accelerate” the company’s franchise offer by transferring 109 existing company-owned stores into 15 regional zones for regional as well as national investment. The news came in parallel with the launch of HiQ’s sponsorship of this year’s British Touring Car Championship. Company representatives told Tyres & Accessories that this seven figure motorsport investment represents the single largest marketing investment Goodyear Dunlop has committed to the HiQ brand.

In a further twist, HiQ managing director Neil Burrows announced that he and “three members of the management group” are interested in investing into a “significant part” of the network themselves, demonstrating they really are willing to put their money where their mouths are regarding the franchise’s development. Therefore, in the interests of transparency, Neil Burrows and the other three as yet unnamed managers will be assigned to special projects (such as managing the BTCC sponsorship deal) within the Goodyear Dunlop group.

The news that Goodyear Dunlop is effectively franchising-off 109 of its retail outlets also goes some way to further explaining the recent decision to transfer former Goodyear Dunlop Commercial Director, Robin Sharpe, to “special projects.” With Burrows team’s decision to bid for HiQ in mind, it now appears that Sharpe will manage the HiQ team until the final announcement regarding the franchising of the HiQ equity branches has been announced.

Goodyear Dunlop representatives told T&A that the jobs of all those involved are secure and, in the event that their bid is not successful, they will be free to return to their former positions. The company will be unveiling details of its nationwide franchising programme on 31 March, with the definitive structure following in the summer.

At the time of the announcement Goodyear Dunlop Managing Director Mark Brickhill stated: “The fact that Neil and his team wish to invest in HiQ is a signal of the confidence that management have in the future success of HiQ. However, it is vital that we have complete independence and transparency during the franchise application period, which is why we have appointed Robin to lead the HiQ team during the next few weeks.”

“There are huge opportunities in the vehicle servicing market due to the lifting of restrictions on who can carry out servicing work on vehicles without affecting warranties. This, coupled with aggressive new product development plans from Goodyear and Dunlop, means that HiQ is in a strong position to grow significantly over the coming years.”

The total number of HiQ outlets nationwide as of February 2008 stands at approximately 120. The three-year plan unveiled last year is to more than double this number by 2010. The target now is for 60 more retail franchisees to have joined the network by the end of 2008.

Neil Burrows has previously stated that the company is initially interested in attracting franchisees in the North West and within the M25. While this is still true, the strategy for 2008 is also to fill gaps in the market. For example, at the time of going to press, there wasn’t a single HiQ outlet in Norfolk. “Longer term we are not limiting ourselves to 250 outlets,” Burrows commented, explaining that in the future retail outlets would be run by a combination of single centre owners and multi-store franchisees. The example of one franchisee in Cumbria exemplifies the way a multi-store franchise might operate. This franchisee is exclusively responsible for HiQ sales in the Lake District and as such he has the opportunity to enter into dialogue with the company regarding development of further HiQs in the area.

Over a year since HiQ relaunched itself as a car and van only tyre specialist, plans to upgrade the look and feel of the network continue to progress. 30 outlets are already refurbished in what are still the early stages of three to five year upgrade plan. HiQ’s novel use of the Internet as a sales tool is also said to be expanding following the system’s soft launch last August. While sales generated through the online system still represents “less than 5 per cent” of overall sales, this is expected to increase significantly as the company adds additional tyre brands and servicing options to the system.

Seven-figure sponsorship investment

While the launch of HiQ’s maiden year as title sponsor of the British Touring Car Championship (BTCC) may have been upstaged to some extent by the news of the radical changes within HiQ’s ownership structure, it would be a mistake to underestimate the significance of this deal.

“The HiQ business is a core part of Goodyear Dunlop’s plan for profitable growth and [the] HiQ MSA British Touring Car Championship launch is evidence that we are continuing to invest to build HiQ as a vital channel to market for us. The HiQ network growth will be through franchising. Our existing franchises have been tremendously successful and there is significant interest from existing and potential new franchisees in joining us to invest in HiQ,”

During the BTCC/HiQ launch press conference Neil Burrows explained that he first entered talks with the BTCC series director and administrator on the subject of a sponsorship deal roughly a year ago. According to Burrows, the arrangement works at every level and the partnership “really has legs” for future development.

One example of this is the running of race evenings in outlets near race meetings, featuring racing stars and experts. The first of these will take place at the HiQ in Grays, Essex, and is expected to present a strong PR and promotion opportunity for the brand. Apparently the only problem with this kind of event is there isn’t enough races in the season to cover all 120 HiQs.

Another example is the discount promotion HiQ is currently running, with HiQ offering discounts of up to 20 per cent on “race track inspired” Dunlop tyres at stores across the country as a way of celebrating the tyre retail chain’s first year as sponsor of the British Touring Car Championship.

“We are delighted to be sponsoring the MSA British Touring Car Championships. It is a huge development for HiQ and we want to share our delight with customers. We have agreed to knock 20 per cent off a range of brands,” HiQ managing director Neil Burrows commented, adding: “The BTCC has proved that it can deliver high value of advertising worth, with live ITV coverage, the biggest UK motor sport attendance figures and broad media exposure. It gives HiQ a perfect opportunity to promote our unique offering as we re-launch and grow our network across the UK.”