Bob Morrison, whose family has been in the tire business since the Great Depression, had observed a trend threatening the independent retail tire business.
Small retail tire stores were battling national chains for their very survival, the classic David and Goliath saga."They're very active and highly competitive. They've made a huge impact. In the big cities, they've forced out the mom-and-pop tire stores. That's our customer base. We could see some real serious signs our customer base was vanishing," said Morrison, chairman of Grandma's Tires, a Hercules tire wholesale supplier to independent tire stores in the Intermountain area. Grandma's Tires also operates seven retail tire stores in Utah and operates the ZCMI Auto Centers under a lease agreement.
So, Morrison and other leading Hercules tire wholesalers nationwide decided to take on the giants. Thus, they established Car Merica, a buying cooperative that will enable members to buy tires at more competitive prices, offer warranties to customers if they buy certain name-brand tires and 24-hour roadside assistance in case they get a flat tire.
Another benefit is, if a customer has a problem with a Car Merica tire purchased in Cedar City, he or she may go to any location to have the problem remedied.
The Car Merica concept will be launched in Utah on Aug. 15, when Grandma's Tires and ZCMI Auto Centers adopt Car Merica signage and blue, red and white Car Merica paint.
Other than a new look and name, Grandma's Tires president Craig Morrison said Grandma's Tires and ZCMI Auto Centers will retain the personal touch. "Now we're adding to that national clout."
Car Merica's research indicated most retailers were knowledgable about their product and offered good customer service but needed to sharpen their business practices, Bob Morrison said.
The program teaches retailers management skills such as record keeping, accounting, inventory tracking and consistent operational standards used by Car Merica members nationwide.
Members of the network also will benefit from nationwide advertising. By year's end, Bob Morrison estimates there will be 30 to 40 Car Merica members in the Intermountain West. Founders believe the Car Merica network will have 1,000 licensees by the end of 1996.
Independent tire wholesalers involved in developing Car Merica initially proposed offering the cooperative through franchise agreements. But after consulting with advisers, Car Merica founders determined the franchises would be cost prohibitive to develop and sell.
"We came up with a very simple licensing agreement to offer to independent retailers that gets them in under this umbrella and gives them the skills they need," said Craig Morrison.
For individual retailers, signing on the licensing agreement will cost $10,000 to $20,000. "Presumably, all their equipment is in place," Bob Morrison said.
Wholesale operators hope the retailers' improved business practice and the network will ultimately translate into greater wholesale business, Bob Morrison said.