Ptac presentation colombia_2015_press

The Right Brand. The Total Package.

748 Miller Drive, SE • Leesburg, VA 20175 • (703) [email protected] • www.PrecisionTune.com

M A S T E RF R A N C H I S E L I C E N S E

A P R E S E N T A T I O N F O R C O L O M B I A

2 | www.PrecisionTune.com | The Right Brand. The Total Package

Dear Future Master Franchisee:

I want to thank you for your interest in exploring the master franchisee opportunity available through Precision Tune Auto Care. I hope you will take the time to review our prospectus and visit our website.

With the global automotive aftermarket growing and changing every day, now more than ever, it is critical to be involved with a company like Precision Tune Auto Care that has international experience with a proven operating system. PrecisionTune.com has information on many of the tools that a Master Franchisee will need — from operational business plans, equipment and tools, education, market analysis, forecasts and in country training. Whether you are new to the market or have prior experience in the Automotive Industry, we can develop a solution adapted to your objectives, skills and means.

We are committed to conducting business in accordance with the highest standards of professional and ethical conduct and have been doing so for more than 30 years. In order to move forward, you will want to learn more about us and as you review the information that follows, you will see that we are very committed to our Master Franchisees. Conversely, we will want to learn more about you, your team and understand your commitment to developing the PTAC brand in your country.

If you have any questions, please contact our development department at (703) 777-9095 x211.

Sincerely,

Robert FalconiPresident and CEO


AU TO M OT I V E I N D U S T R Y U P DAT E

Precision Tune Auto Care is bullish on the development of the brand in Colombia. As today there are more than 5 million registered passenger vehicles on Colombia’s roads. If you include motorcycles this number nearly doubles. Based on Colombian governments estimation of 5 million registered passenger vehicles the estimated market for service and repair of routine scheduled maintenance is in excess of 2 Billion USD per year and is expected to continue growing by 7 - 10% per year.

According to the Colombian Automotive Outlook, the automotive sector comprises about 4% of the country’s GDP and accounts for nearly 25,000 jobs. While new car sales have contracted since reaching a peak in 2011. The Colombian government forecasts that sales in 2014 and 2015 will reach estimates of 302,000 and 314,000 vehicles sold in respective years. The growth in car sales is expected to increase as a result of improved household spending and a growing middle class. Many people fully expect the number of passenger vehicle to double in size over the next ten years.

The Colombian automotive market holds significant potential for growth due to a rising population and also a need to replace the ageing vehicle fleet. Today the average age of a passenger car is 14.2 years, 3 years older than US vehicles. In recent years the government has signed several free trade agreements to support the automotive industry including with the USA. Despite these trade agreements the Colombian automotive manufacturing sector is losing ground to imported vehicles.

Generally speaking Colombia has a large vehicle market. According to KPMG in 2013 the top four brands accounted for more than 70 percent of total vehicle sales; GM / Chevrolet with the highest market share of 24%, followed by Renault 22% and Hyundai with 18%. The sale of passenger vehicles has been driven by rising incomes, greater competition and lowered tariffs. With a well-established banking system backed by low intervention rate set by the central bank there are favorable conditions to support the continued growth of the Colombian automotive market by roughly 7 – 10% per year.

With a growing demand for personal car ownership and a market nowhere near saturation, Precision Tune Auto Care is pleased to be seeking a master franchise partner to develop the Colombian market for automotive maintenance and repair.

Medellin Highway on a sunny day


F R A N C H I S E U P DAT E F O R CO LO M B I A

The Colombian franchise sector has more than doubled over the past 10 years. This boom has been driven by better public awareness and acceptance of the concept of franchising by many local firms and to the new lower cost of business associated with the implementation of the many newly-signed free trade agreements.

During 2011, the Colombian franchise sector grew 4%. This increase was reflected by 425 brands which registered in 2010 compared to 427 in 2011. Franchising in Colombia was growing at a rate of 18% per year until 2008 (433 Franchises), however due to the world economic crisis of 2009 the sector experienced a temporary slowdown.

Franchising as a business strategy is alive and well in Colombia with more than 420 brands. The big industry owes thanks in part to the Inter-American Bank (IDB) which in 2005 streamlined the financing process and was able to increase access to capital for a Colombian franchise model with international projection. As a

result today more 51.3% of the brands are Colombian in origination. While 20% of concepts are from the USA. Today, franchises from United States, Brazil, Spain, Mexico, United Kingdom, France, and others countries have a presence in Colombia.

Like many other Latin American markets, Colombia is a price sensitive market, and the vast majority of people are persuaded by price in their consumption decisions, as many of them prefer price over quality. As a result there are less than 11,000 franchised sales points nationwide. A fairly low number of retail outlets given the overall population of the country. As the middle class and GDP continue to rise the number of franchised retail outlets will continue to increase. Thus creating opportunities for brands such as Precision Tune Auto Care to capture the middle class customer who is expecting a higher quality and value for their purchases.

Food Court in Medellin Shopping Mall, 2014


AU TO M OT I V E S TAT I S T I C S

Total Registered Vehicles

3,133,427

2012 NewCar Registrations

173,740

2012 NewTruck Registrations

152,400

Total Roadways 141,374 km

Ratio of Peopleto Cars

14.6 people per 1 car

Statistics

Development Opportunity of Colombia


COLOMBIA DEVELOPMENT OPPORTUNIT Y F O R T H E 20 L A R G E S T C I T I E S

The statistics above represent an extrapolation of the known population data set to deduce an estimated number of passenger vehicles in each city and further an estimate of the potential number of Precision Tune Auto Care centers which could be conservatively developed in each city. The development opportunity could be understated by as much as 20 – 35%. The primary customer profile will be middle class customers and companies with fleets of passenger vehicles which are interested in maintaining their cars and light trucks in good working order outside of relying upon the dealership for service.

Precision Tune Auto Care is willing to award the Master Franchise rights to the entire country of Columbia for the sum of $350,000 USD.

Based upon Average US production, Precision Tune Auto Care seeks a car population of 20,000 – 40,000 vehicles within a 5 – 20 minute driving time for the purposes of site selection. The total annual automotive aftermarket for maintenance and repair in the largest 20 cities of Columbia is estimated to be in excess of 1.2 Billion USD per year. This illustration shows the development potential not withstanding 7-10 percent annual growth to the car market for the top 20 cities with a minimum potential today for more than 26 locations.

CITY POPULATION ESTIMATED # OF VEHICLES

# POTENTIAL PRECISION CENTERS

Bogotá 7,878,783 1,290,000 6-10

Medellín 2,464,322 402,667 4-6

Cali 2,369,821 387,225.7 2-4

Barranquilla 1,218,475 83,457.19 2-3

Cartagena 1,001,755 68,613.36 2-3

Cúcuta 650,011 44,521.3 1-2

Soledad 615,492 42,156.99 1-2

Ibagué 553,524 37,912.6 1-2

Bucaramanga 527,913 36,158.42 1-2

Soacha 511,262 35,017.95 1-2

Villavicencio 484,471 33,182.95 1-2

Santa Marta 483,865 33,141.44 1-2

Pereira 469,612 32,165.21 1-2

Bello 455,865 31,223.63 1-2

Valledupar 453,215 31,042.12 1-2

Montería 441,301 30,226.1 1-2

Pasto 439,993 30,136.51 1-2

Buenaventura 399,764 27,381.1 1

Manizales 396,075 27,128.42 1

Neiva 342,117 23,432.67 1


P R E C I S I O N T U N E AU TO C A R E E X I S T I N G F R A N C H I S E L I C E N S E S I N T H E U. S .

• Coral Springs, AL• Margate, AL• Delray Beach, AL• Naranja, AL• Lauderhill, AL• Dallas, AL• Fort Worth, AL• Arlington, AL• Dallas, AL• Plano, AL• Jacksonville, AL• Macon, AL• Warner Robins, AR• Albany, AR• Valdosta, AR• Macon, AR• Columbus, AR• Columbus, CA• Phenix City, CA• Port Arthur, CA• Beaumont, CA• Fort Walton Beach, CA• Pensacola, CA• Columbus, CA• Daphne, CA• Gulf Breeze, CA• Panama City, CA• Crestview, CA• Mobile, CA• Gulfport, CA• Pensacola, CA• Mobile, CA• Pensacola, CA• Jacksonville, CT• Alexandria, FL• Lake Charles, FL• Baton Rouge, FL

• San Antonio, FL• Little Rock, FL• North Little Rock, FL• Nashville, FL• Knoxville, FL• Nashville, FL• Knoxville, FL• Little Rock, FL• Nashville, FL• Knoxville, FL• Chattanooga, FL• Jonesboro, GA• Chattanooga, GA• Chattanooga, GA• Murfreesboro, GA• Austin, GA• Austin, GA• Killeen, GA• Austin, GA• Waco, GA• Victoria, GA• Temple, GA• Pflugerville, GA• Eagle Pass, GA• Harker Heights, GA• Copperas Cove, GA• Cedar Park, GA• Killeen, GA• Roseville, GA• Minneapolis, GA• Columbia Heights, GA• St. Paul, GA• Minneapolis, GA• Coon Rapids, GA• Eagan, GA• Eden Prairie, GA• Plymouth, GA

• New Hope, GA• Bloomington, GA• Champlin, GA• Maple Grove, GA• Andover, GA• Elk River, GA• Apple Valley, GA• Fargo, GA• Spring Lake Park, KS• Lino Lakes, LA• Burnsville, LA• Independence, LA• Shawnee, MA• St. Joseph, MD• Kearns, MD• Murray, MD• Salt Lake City, MD• Las Vegas, MD• Lynnwood, MD• Marysville, MD• Everett, MD• Renton, MD• Culpeper, MD• Hayes, MD• Newport News, MD• Petersburg, MD• Richmond, MD• Harrisonburg, MD• North Chesterfield, MD• Tulsa, MD• Springdale, MD• Tulsa, MD• Owings Mills, MD• Catonsville, MD• Baltimore, MD• Rosedale, MI• Annapolis, MI

• Hunt Valley, MI• Randallstown, MI• Edgewood, MN• Severna Park, MN• Salisbury, MN• Baltimore, MN• Frederick, MN• Lexington Park, MN• Baltimore, MN• Aberdeen, MN• Williamsport, MN• Burton, MN• Traverse City, MN• Raleigh, MN• Raleigh, MN• Durham, MN• Durham, MN• Raleigh, MN• Wilmington, MN• Raleigh, MN• Burlington, MN• Jacksonville, MO• Goldsboro, MO• Greenville, MS• Rocky Mount, MS• Cary, NC• Raleigh, NC• Wilson, NC• Wake Forest, NC• Morrisville, NC• Birmingham, NC• Decatur, NC• Birmingham, NC• Florence, NC• Birmingham, NC• Alabaster, NC• Pelham, NC

• Opelika, NC• Oklahoma City, NC• Edmond, NC• Oklahoma City, NC• Oklahoma City, NC• Oklahoma City, NC• Yukon, NC• Fayetteville, NC• Pineville, NC• Charlotte, NC• Charlotte, NC• Gastonia, NC• Charlotte, NC• Greensboro, NC• Hickory, NC• Concord, NC• Greensboro, NC• Greensboro, NC• Winston Salem, NC• High Point, NC• High Point, NC• Mooresville, NC• Dayton, ND• Huber Heights, NV• Englewood, OH• Columbia, OH• Charleston, OH• Columbia, OK• Columbia, OK• Summerville, OK• Rock Hill, OK• Florence, OK• Sumter, OK• Hendersonville, OK• Myrtle Beach, OK• Asheville, PA• Cayce, SC

• Mount Pleasant, SC• Johnson City, SC• Irmo, SC• Greenwood, SC• Greenville, SC• Anderson, SC• Greenville, SC• Spartanburg, SC• Lexington, SC• Silver Spring, SC• Clinton, SC• Beltsville, SC• Manassas Park, SC• Bowie, SC• Montgomery Village, SC• District Heights, SC• Shelton, SC• Fairhaven, SC• Hanover, SC• Detroit, TN• Royal Oak, TN• Atlanta, TN• Marietta, TN• Smyrna, TN• Norcross, TN• Athens, TN• Lawrenceville, TN• Decatur, TN• Tucker, TN• Duluth, TN• Forest Park, TX• Mableton, TX• Atlanta, TX• Gainesville, TX• Union City, TX• Douglasville, TX• Newnan, TX

• Lilburn, TX• Marietta, TX• Snellville, TX• Riverdale, TX• Conyers, TX• Marietta, TX• McDonough, TX• Decatur, TX• Savannah, TX• Salinas, TX• San Jose, TX• Morgan Hill, TX• San Jose, TX• San Jose, TX• Sunnyvale, UT• Sunnyvale, UT• San Mateo, UT• Fremont, VA• Redwood City, VA• Milpitas, VA• Santa Clara, VA• Gilroy, VA• Augusta, VA• Augusta, VA• North Augusta, VA• Aiken, WA• El Cajon, WA• San Diego, WA• Murrieta, WA• Vancouver, WA• University Place, WA• Gig Harbor, WA• Lakewood, WA• Parkland, WA• Tacoma, WA

As of January 1, 2015 there are approximately 260 centers in the United States

11

10

14

19

34

34

22

20

21

16

58

8

4

3

3

3

2

2

1

1

1

1

11


P R E C I S I O N T U N E AU TO C A R E E X I S T I N G F R A N C H I S E L I C E N S E S W O R L D W I D E

As of January, 2015 there are approximately 65 centers internationally

19

2

26 4

2

1

15

Nigeria Oman Portugal Republic of Georgia

Mexico Taiwan United States


UNITED STATES

TAIWAN

NIGERIA

PORTUGALOMAN

P R E C I S I O N T U N E AU TO C A R E W O R L D W I D E C E N T E R S


Founded in 1976 and franchising since 1977, we are America’s largest engine performance car-care company. We have over 280 centers operating in the U.S. and another 98 centers located internationally including: Taiwan, Portugal, Spain, Canada, Oman. We have initiated an aggressive growth plan to open more centers internationally, including countries in Eastern Europe and Southeast Asia.

T H E M A R K E TThe primary Precision Tune Auto Care customers are middle class families who are dependent on their vehicle for transportation. With the complexity of today’s vehicles, the “do it yourselfers” find they “cannot do it”. While they may have the necessary tools to change their oil, and maybe change their spark plugs, they don’t have the resources to diagnose and repair today’s technologically advanced engines. Although each international market is unique, the PTAC business model has proven successful in a variety of very different environments, with minor modifications made as necessary.

T H E CO M P E T I T I O NIn the 1970s and early 1980s, our primary competition came from full-service gas stations. Today, our primary competition comes from the dealership and we estimate that will probably be the case worldwide. The dealerships are focusing more on after-sale service as a revenue generator. The problem with the dealers’ strategy is that today’s automobile owners are not happy with the dealerships. High cost, inconvenience and the quality of the work are most often cited. Tire dealers and maintenance garages form the next level of competition. We are prepared to analyze market potential anywhere in the world.

Regardless of the competition, our model can work anywhere in the world. We are more convenient: an average car is in our shop approximately an hour and a half, and most of the centers take appointments. We beat the dealerships’ price, job for job, and warranty our work for 12 months or 12,000 miles (or 12 months/20,000 kilometers). Internationally, Precision Tune Auto Care has positioned itself as the alternative to the dealership while providing convenience, expertise and the best value for today’s consumer.

I N T E R N AT I O N A L F R A N C H I S E O P P O R T U N I T I E S


O U R S E R V I C E SPrecision Tune Auto Care was founded on the basic engine tune up. Over the years, we have diversified our mix of services to provide total quality car care opportunities for our franchisees to grow and expand their customer base.

Today, we offer a wide variety of specialized and scheduled car care services. These services include:

B R A K E S A N D T R AC T I O N CO N T R O L

CO O L I N G S YS T E M

D I AG N O S T I C D I S CO V E R Y S E R V I C E S

E M I S S I O N CO N T R O L S

E N G I N E A N D P O W E R - T R A I N M A N AG E M E N T

R E L AYS A N D M O D U L E S

E X H AU S T S YS T E M S

FAC TO R Y S C H E D U L E D M A I N T E N A N C E S E R V I C E S

H E AT I N G A N D A I R CO N D I T I O N I N G

I N S T R U M E N T PA N E L , G AU G E S A N D WA R N I N G L I G H T S

L I G H T I N G A N D H O R N S

S TA R T I N G A N D C H A R G I N G

S TAT E I N S P E C T I O N S

S T E E R I N G A N D S U S P E N S I O N

T I R E S A L E S A N D S E R V I C E

T R A N S M I S S I O N A N D D R I V E T R A I N

W I N D O W S A N D G L A S S

W I P E R A N D WA S H E R S YS T E M S

I N T E R N AT I O N A L F R A N C H I S E O P P O R T U N I T I E S ( CO N T I N U E D )


O U R S U P P O R T S YS T E MPrecision Tune Auto Care is a business format franchise. Our business concept has not only been invented, it has been successfully working since 1976 and internationally since1991. We continue to develop and refine the systems and procedures, that when properly implemented, can lead to businesses with excellent sales potential. Our support systems encompass the necessary disciplines for Master Franchisees to develop and grow our brand within their country and include, but are not limited to: site selection, marketing, advertising, technical and management training, operations, parts acquisition and much more. We are prepared to provide support to international Master Franchisees both in our corporate offices in the United States and throughout the world.

Site Selection — Franchisees lease or purchase their own location.

Training at Precision University — Precision Tune Auto Care offers one of the most advanced training programs in the industry. We will teach you how to create and implement the needed infrastructure to support your franchises, as well as how to profitably operate a PTAC center in our Franchise Management course. We will cover all aspects of the business including: financial management, salesmanship, business management, marketing and advertising, labor and purchasing, as well as an overview of our services. In addition to the Franchise Management course, Precision University offers the following management courses: Service Writer Training; Financial Modeling and Templating; and Softwrench (POS System) Training.

Our engine performance and automotive maintenance training program for technicians spans eight weeks and entails 40% classroom time and 60% hands-on training. While it is an extensive course, when your team has successfully completed the course, you will have the most qualified technicians in your country. These technical classes include: Engine Performance; Automotive Electronics, Emissions and On-Board Diagnostics; Brakes; Air Conditioning Service and Repair; Preventative Maintenance; Domestic and Asian Fuel Injection; and Hybrids.

Operations — Master Franchisees provide the first echelon of support in any market. They provide routine support in site identification, marketing and day-to-day operations, as well as periodic training, site visits and offer constructive feedback of the center’s operation. Master Franchisees are normally located in the region.

Advertising — Each center is required to spend resources on advertising. The Master Franchisee may elect to collect some or all of these funds for use in a cooperative advertising campaign. This strategy provides for a much larger potential audience than possible to an individual center.The corporate marketing and advertising department will provide the Master Franchisee with professional advice on the selection and implementation of marketing plans and tools. They will also receive regular updates on advertising materials and opportunities.

I N T E R N AT I O N A L F R A N C H I S E O P P O R T U N I T I E S ( CO N T I N U E D )


YO U R LO C AT I O N SIn our early years, many of our centers were converted service stations. By the 1980’s we began opening in auto malls which are occupied exclusively by tenants in like industries. In the 1990s, we began operating in state of the art professionally designed centers. Complete blueprint packages, equipment listings, parts room deign, and graphic requirements are provided to each master franchisee. With over thirty years in the automotive business, Precision Tune Auto Care has established a formula for success.

The site criteria and demographics we look for are:

• A population base of 50,000 (predominantly middle income) within three miles for Metropolitan areas. However, this will vary from one country to another.

• Activity generators. We want to create a synergy and be surrounded by other businesses which will also draw people into our location.

T H E O P P O R T U N I T YIn developing international Master Franchise opportunities, Precision Tune Auto Care is looking to establish long-term relationships with quality business professionals. Prior experience in the automotive industry is not as critical to your success as is your ability to adapt and implement a proven business system to your local conditions. Precision Tune Auto Care provides the system, superb training in the specifics, continuous and ongoing support and the opportunity to capture a significant portion of the growing automotive industry.

Master Franchise opportunities are available worldwide. The first step in developing a relationship is to define the opportunity within the host country. Specifically, we need to determine the number of centers the country can accommodate. Once you have reviewed the literature, we can discuss specific opportunities.

H O W D O YO U G E T S TA R T E D ?Simply call us at (703) 777-9095 x211, and we will discuss your interests. We will want to get details about your plans and the resources available to you to bring those plans into effect. We are also prepared to meet with you in our corporate office in Leesburg, Virginia (a suburb of Washington, DC). Our fax number is (703) 669-1539.

If there is a “meeting of the minds,” then the next step is to sign a letter of intent after which we will send you a copy of the Master Franchise Agreement. You and your attorneys will review it and we will negotiate the terms of the Agreement. This negotiation process will typically take between 1–2 months as details are worked out such as the Development and Training Schedules and country specific considerations.

As noted above, Precision Tune Auto Care has a number of locations across the world and because we are very growth oriented, we stand ready to move out with qualified prospects at a moment’s notice.

B E N E F I T S O F B E I N G A P R E C I S I O N T U N E AU TO C A R E M A S T E R F R A N C H I S E E


S O U R C E S O F R E V E N U E• % of monthly operating fees is paid by Franchisee to Master Franchisee

• The initial franchise fee is paid by Franchisee to Master Franchisee

• Sales generated by the operation of a corporate center (if applicable)

P R E C I S I O N T U N E AU TO C A R E VA LU E• Over 30 years of worldwide franchising success

• Proven international operating system

• World-class training at Precision University

• Turn-key marketing and advertising

• Worldwide vendor partnerships

• Continuous and ongoing communications Support Provided to Master Franchisee:

S U P P O R T P R O V I D E D• Current standard construction plans and specifications for franchise centers in the U.S.

• Operational manuals

• Annual visits from Sr. V.P. of Operations and V.P. of Training

• Point of sale software

• Training for Master Franchisee and employees of Master Franchisee made available

• Advice, consultation, technical support available through our intranet, telephonic conference calls and technical hotline

• Advertising and promotional plans and materials

B E N E F I T S O F B E I N G A P R E C I S I O N T U N E AU TO C A R E M A S T E R F R A N C H I S E E

The Right Brand. The Total Package.

www.PrecisionTune.com

Business

Ptac presentation colombia_2015_press