"Gear-heads" Unser and Lippert rev up for growth

Area developers usually come to the with experience in franchising and the industry they're in--or at least one of the two. In the case of new Precision Tune Auto Care area developers Dick Lippert and Al Unser, Jr. (yes, that Al Unser, Jr.), neither has franchise experience. But Lippert brings a strong track record of business success. And Unser? Well, he knows a little something about cars.

Before coming to franchising, Lippert was CEO and chair of an online telephone company, CEO of a telecom firm, a venture capitalist, and founder of an electronic company. But he has something else going for him besides his business smarts. This grandfather took second place in 2004 and third in 2005 in the Skip Barber Masters' National Championship Series.

Lippert is enthusiastic when he talks about his new partnership to develop Precision Tune Auto Care shops with the legendary racing champ. "Al's the man," he says. "To say that I am a race car driver too is like talking to Lance Armstrong and saying, 'Yeah, I have a bike too.'"

The partners met earlier this year through John Caponigro, founder and CEO of Sports Management Network, a and management and marketing firm in Bloomfield Hills, Mich. "Dick was my client on the business side, and Al was my client on the sports management side," says Caponigro.

He knew that Unser, who was not racing full-time, was interested in getting involved in an automotive-related business. "Al's a great guy, and of course Dick is a quality business guy, so I put them together. I think they're going to do great things together," he says.

Good-bye, corporate life

In 2003, during a trip to Italy with his wife, Lippert had an epiphany. They'd flown first-class to Rome using his frequent-flier miles and spent the entire trip on the executive level of a Hilton, also using points he'd earned. "By the end of that year, I had another 525,000 Hilton points," he says. "And I came to the conclusion that I was doing too much traveling."

At this point in his life, says Lippert, he was ready for something else. "I didn't want to do another startup. I wanted to do something in franchising that was automotive-related, that had a formula for good management, and a high success rate."

Unser, a member of one of racing's royal families, retired from racing a couple of years ago, but says he "missed it too much" to stay away from the racetrack entirely, and he still does some racing. He also decided that he wanted to get into the auto industry in some other capacity.

"John [Caponigro] and I talked about it, and he introduced me to Dick. He had been looking into opportunities with Precision, and I thought the company was a perfect match," says Unser.

By telephone from England, where he's testing a new race car, Unser says he's excited about working with Precision Tune and Lippert, jokingly calling him a fellow "gear-head." Says Unser, "I think we have a bright and long future together."

Strong off the line

What Unser brings to the table in terms of marketing and visibility is more than most franchisees could hope for starting out (or in a lifetime). "Obviously, Al's going to mean a whole lot to our efforts to brand our operation," says Lippert.

But the racing champ also knows cars. "I have raced for some of the finest race teams in the country, and I know how they keep their shops. I have the expertise to make sure our Precision shops are clean, our mechanics are clean, and the cars are clean when they leave our shops," says Unser.

Unser, who lives in Henderson, Nev., spent some years in Phoenix, where his son, now 23 and starting a racing career of his own, was born. Lippert, an Ohio native, also lived in Arizona for a time and knew the market and business resources in the area when he began talks with Precision in late 2005.

Lippert was especially impressed with Precision Auto Care CEO Robert Falconi and the staff. "They were responsive without being overly aggressive, and we felt we could trust them, which is obviously important. Also, the people already in the system were complimentary toward management, which says a lot," Lippert says. He did his due diligence in the first part of 2006, and by spring he and the two-time Indy 500 winner and two-time CART winner were partners.

Falconi says there was great excitement in the corporate office about the new additions to the Precision team. "With Dick's business skills and Al's popularity, name recognition, and passion for motor sports and automobiles, we know that our brand will be in excellent hands," he says.

While their initial focus is on Greater Phoenix, the partners don't have a specific plan for the number of locations they will open, Lippert says. "We want to be cautious. We want the shops we open to be good locations with the right economic bases and a high probability of success. We have goals, but we don't want to open stores as quickly as we can, just to open stores."

Having built and managed multi-location services before, Lippert is confident he and Unser can do it successfully with Precision. Both men plan to roll up their sleeves and start out hands-on to learn the ins and outs of the business before major expansion.

And as the partners examine options for opening locations in Arizona, they are receiving ample support from both Falconi and John Weigand, senior vice president of operations. "We initially leave site location in the hands of the area developer," says Falconi. "We're going to look for him to pick out sites and then we will provide demographic information." But, he says, the final decision belongs to the area developer or franchisee.

Weigand usually will visit tentative sites with an area developer or franchisee prospect and provide "insights, positives, and negatives," says Falconi. "John has a lot of background in, for example, sales data, P&L, what types of percentages work, and just the general running of the business." In cases where franchisees are considering an existing or recently closed businesses, the franchisor will offer help by analyzing the financial data and offering insights.

The entire process is made easier by the "ability to use real data to help provide that information to franchisees and developer/owners," Weigand says. A few years ago, the company used a software package that provided a lot of data, but it was too costly and the data it provided was available--often free--through other sources, says Falconi.

To protect its existing operators, Precision's impact policy typically asks franchisees to allow either three miles of distance or 50,000 people between locations, whichever comes first. "Obviously, there's not much to worry about in Arizona, because there's nothing [no Precision Auto Care shop] there yet," Falconi says. "But in more mature markets, such as Minneapolis and Atlanta, we pay close attention to where stores are to be located and have turned sites down--even if it's outside the range if we think it's still too close. We don't want to upset an existing franchisee. If a site is on the edge of his area, we generally say, 'Let's find another spot.'"

Management matters

Clearly, says Weigand, people in the service business want their sites highly visible to capture drive-by customers. But ultimately, location is not the most critical factor. "It's most important to get the right team in place. It's a service business, and whoever takes the best care of its customers captures the market," he says.

"My feeling is that when it comes to success, location is 20 percent, and management is 80 percent," says Falconi. "We've found that one store, doing well under one set of leaders, can drop quickly when someone else comes in. And the reverse happens all the time. Location matters, but it doesn't matter as much as management."

Lippert brings additional strengths to the partnership, including a high level of comfort with technology; an understanding how each location operates as a small business; and a strong emphasis on ethics. "I believe if you bring good, sound management skills and ethics to the table, success is inevitable," he says.

The long-time executive says he's intolerant of anyone who "crosses the line" on integrity or ethics. He also says it's important for him to hear from people at every level of the business. "Everyone has a view, a perspective, and an opinion, and I've always made sure I'm accessible to hear them," he says. "I absolutely believe a business is built around its people, and that the people have to be treated well, respected, and heard. It's got to be fun to go to work every day."

Locations aside, the key to the ultimate success of the Precision shops in Arizona will be making sure they have the best people running the businesses, says Lippert, whose role model was his father, a successful businessman in his own right. And, of course, keeping their radar constantly tuned to the changing needs of their customers.

"We believe the average age of cars on the road is increasing, which makes things increasingly difficult for mechanics. We see dealer services becoming more aggressive--even some trying to become more of a generalist," says Lippert.

Falconi and Weigand agree this is an interesting time in the auto services industry. "We're seeing more of our competitors trying to do everything, rather than the specialization we had 10 years ago," says Falconi. Precision, which began as an auto tune-up company in 1976 and moved into oil changes, fuel injection, air conditioning, brakes and other diagnostic services, is introducing the idea of selling tires and related services. "We started under the car, and they're just now under the hood, where we've been a long time."

"Our culture for 30 years has been to help diagnose and give factual data to improve fuel economy. We know we can provide great value to our customers in that arena," says Weigand.

Current high fuel prices have led Precision, with 323 units in the United States and 98 overseas, to emphasize the value of its fuel injection cleaning. "We're letting consumers know that if they have these services done, they won't need to spend so much money on gas," Falconi says.

As Lippert sees it, "There's still plenty of room for operations that offer quality work, competitive prices--not the cheapest nor the most expensive--and family-friendly atmospheres, where no member of the family fears taking or waiting for their car to be repaired. We want to get back to integrity and being a good community citizen."

As they move forward launching their new venture, it's obvious the two partners have developed a mutual admiration society. "Al is an absolutely terrific guy--no one's nicer than he--and we have a great relationship," Lippert says. "We were together a couple of weeks ago, looking at some opportunities in Phoenix, and we had a great time."

Unser laughs when he hears about Lippert's Lance Armstrong analogy. "Oh, Dick's a whole lot more than that. He's a really smart guy, and we're really enjoying getting to know each other," he says.

Lippert, a regular fixture at racetracks across the country, has seen his partner race many times over the years. Has Unser seen him do his thing on the racetrack? Lippert is silent for a moment. "Not yet," he says.

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