Small Business
Reinvention is all about rebranding for a Fort Worth-based mechanical parts distribution company that now is aiming to go nationwide in a new franchise initiative.
K & N Electric Inc., founded in 1972, sells more than 5,000 parts through its mobile distribution units – a team of trucks that crisscross several states to bring the parts store to the buyer, according to the company’s slogan.
Now under the complete guidance of President and CEO Curtis Nelson, 43, the second generation to oversee the company, K & N Electric – through its trade name K & N Mobile Franchises – is aiming to expand by implementing an updated franchise system, more than 20 years after a botched attempt in the 1980s.
“We’d like to grow the company and it’s very expensive for us to put trucks out, fully stock them, pay the salesmen for a year or so until they’re actually selling enough to pay their way,” Nelson said. “So the best way for us to grow rapidly is through franchising, which is why we started the franchise company.”
The company recently hired a broker to sell the idea to potential franchisees and potential customers, after more than 10 years of research and a complete overhaul of its original concept; the new model is all about efficiency, using bar codes, state-of-the-art computers and instant information transmission to provide faster communication with more clients in a day.
“Our whole purpose is trying to see as many customers as we can in a day,” Nelson said. “Anything we can do to help our salesman or franchises see more customers in a day greatly benefits us. … Our biggest thing is we want to make sure every franchisee succeeds.”
Changes include reducing the franchise royalty rate from 13 percent to 9 percent, lowering the franchise fee from $23,500 to $10,000 and updating computer systems to expedite sales and service. The company already operates throughout Texas, as well as in Arkansas, Georgia and Buffalo, N.Y., and future franchise opportunities are everywhere, Nelson said.
The companyÂ’s biggest asset is outgoing people, he said. Usually about one person for every five interviews earns the opportunity to try out for a franchise.
“You have to be a real people person and enjoy going out and meeting new people and not having any cold-call apprehensions,” Nelson said. “You have to be a go-getter, basically, to do well.”
Meanwhile the company’s greatest hindrance is trucks – securing enough trucks to serve the franchise demand requires patience, as K & N Electric waits for the outfitting of its special, General Motors Corp. vehicles specially designed for their operations.
Finally, the state of the economy is negligible, Nelson said.
“If the economy is going well, everyone is manufacturing, buying new stuff, which uses our parts,” he said. “If the economy slows down, then they’re wanting to repair their old stuff and not buy new stuff, which uses equal amount of our parts.”
The company is gearing up for its first new franchisee to begin operations in Amarillo, and Nelson is hoping the first will lead to many more.
“My dad, since he started the company in ’72, he wanted to be like a Snap-On Tools or Matco Tools company and have our vans across the United States,” he said. “We feel like we’re in a position now to start moving that direction.”
Contact Tronche at jtronche@bizpress.net
