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Sixty years ago, the automotive industry was mayhem. The technology was primitive, and issues abounded. These days, thanks to improved manufacturing technologies, those issues are mostly gone. As such, the demand for the products needed for automotive repair and maintenance has dropped as well.
It has been the exact case with many of Ziebart’s products. With improved car manufacturing technology, many of Ziebart’s services like polishing, mirror polishing, rustproofing, auto detailing have become unnecessary and obsolete.
Ziebart has to add new products and services to its product profile to stay in business, which is not an easy endeavor. At the same time, the company’s relationship with its franchisees continues to get strained. The unhappy franchisees have accused Ziebart of indulging in unfair business practices and overcharging its franchisees for obsolete products. For example, Ziebart sells sealant to its franchisees for $34 when, in reality, it only costs them $8.
Owning a franchise is taking one step towards being an entrepreneur. One should be wary of all options to ensure that their investment in franchise opportunities will yield the maximum profits.
Fransmart keenly researches franchises through various forums and takes feedback from industry insiders to analyze and let you know the issues plaguing the brand in present times. All aspiring businessmen who want to buy or extend their franchise agreement with Ziebart should consider these five pitfalls that can be the reason for your failure.
Ziebart Business: Enhancing, Preserving and Protecting the Cars
Ziebart is an automotive appearance and protective services company. The Ziebart brand franchise runs under the name of Ziebart Corporation. The company was the first to develop an anti-corrosion process for cars that is still in use today.
Ziebart opened its first store in Detroit, Michigan. Since then, it has expanded to 400 licensed locations with 1200 units in 34 different countries.
Ziebart stores provide the following services to their customers:
- Structural protective coatings
- Detailing and appearance protective coating
- Scratch and scuff
- Films
- Wraps & graphics
- Scratch repair
- Accessories
- Polyurethane protective coatings
- Glass replacement and repair.
Ziebart offers a turn-key operational store to its franchisees, which takes four months to set up from start to finish.
How much does the Ziebart Franchise cost:
Ziebart has a following financial requirement from its franchisees:
- Initial Franchise Fee: $30,000
- Initial investments: $228,200 – $450,500
- Net-worth Requirement: $250,000
- Liquid Cash Requirement: $100,000
- Ongoing Royalty Fee: 5% / 8%
- Ad Royalty Fee 5%
A Ziebart franchise is a huge investment, so there are many factors you need to consider before you sign on the dotted line.
Why Ziebart Franchisees Are Struggling:
Ziebart has been a popular name in automotive services that enhances, preserves, and protects the appearance of cars and trucks. But, with the new innovative technology in the automobile industry, the demand for after-sale services has declined. The business has not been as good as it was before for Ziebart franchisees.
#1 Ziebart Rustproofing Has Met Its End:
Ziebart came into the business with an invention that prevents corrosion by rustproofing your precious cars. What is the current market demand for the product? The car manufacturers are making better vehicles and are providing good warranties, including rust-through warranties. Without these warranties, any car would not need rust protection for at least ten years from its manufacturing. That has led to a decline in the product demand to almost 25% of its original requirement. Ziebart’s most popular product is nearing its end, which has considerably affected the business generated by the company.
#2 Franchises Not Happy With New Product Line Offered By The Company:
With the change in demand, Ziebart had to change its business strategy from merely protecting and enhancing to maintaining vehicles. Ziebart had, for that reason, added Rhino Linings and Speedy AutoGlass to make the brand a one-stop shop for car care. But not all Ziebart’s franchises are happy with that decision. Since many franchises are in areas with Rhino distributors, they could not carry that product in their stores. The dealers were also required to add additional terms on their contract as the change in company strategy, which most have not agreed with.
#3 Overpricing Products and Questionable quality:
Ziebart franchise faces various lawsuits by the franchisees for overcharging its products like a sunroof, chemicals, and others, that a dealer is required to buy from them. Furthermore, there have been concerns about the safety of these chemicals provided by the company.
The high prices by the company are reducing the already strained profits of many of Ziebart’s dealers and are making the business unpalatable for franchise investment.
#4 Ziebart Is Not The First Choice Of Brand For Glass Repair Or Detailing:
The problem with Ziebart is that it is still acknowledged as a rustproofing brand in the market. Unless extensive educational campaigns are run to change the perception, other products like glass repair and car detailing work cannot make space for themselves. It would be hard for franchisees to create a substantial market for different product lines of Ziebart products.
#5 Poor Rating In Customer Satisfaction:
Nowadays, businesses are constantly being reviewed on social media platforms. Unfortunately for Ziebart, many franchise stores are accused of not handling their client’s car problems professionally. Their products are also overpriced, making them less desirable to customers. If a brand does not live up to its name, customers will quickly switch. Also, if one store does not perform well in the franchise business, all the other stores suffer its consequences.
Conclusion
While the automotive industry has been jolted hard by the shortage of microchips and halted production, one particular business is booming: the car care industry. With consumers turning to detailing and protective coating on their existing cars as more affordable alternatives new franchise setup in auto care can be a good investment.
Sources:
https://www.franchisedirect.com/automotivefranchises/ziebart-franchise-09677/ufoc/
https://topfranchise.com/products/ziebart-automotive-aftermarket-franchise/
https://www.franchise.com/franchise/ziebart
https://www.thefranchiseking.com/the-death-of-automobile-rustproofing-can-ziebart-stay-relevant
https://theyatoomalawfirm.com/ziebart-pushes-to-shed-rustproof-only-image/