The owners of the Dobbs Brothers Management auto retail chain in Memphis, Tenn., may have some comforting words for Republic Industries Inc.: Been there, done that.
Republic agreed to buy Dobbs' multistate retail chain last week for $200 million. Dobbs will give Republic new franchises in Tennessee, North Carolina, South Carolina, Florida, Alabama and Arizona. It is ranked No. 7 on the Automotive News list of America's biggest retail chains for 1996.
But the Memphis company's early history may have a familiar ring to it for Republic management. Republic is currently in a legal feud with Toyota Motor Sales U.S.A. Inc. and American Honda Motor Co. They are nervous about having too many of their franchises controlled by a single dealer group.
Dobbs was founded in 1921 as a Memphis Ford dealership. It quickly expanded into other states.
By the 1950s, Dobbs controlled 56 Ford stores around the country, making it the largest retailer of Fords in America.
Company cofounder James Dobbs Sr. spent much of his time flying from city to city to inspect the dealerships. As a result, he created a national airline catering company, Dobbs House.
But Dobbs' accumulation of Ford stores began to make Ford Motor Co. management nervous. The automaker decided Dobbs was too big.
'The Dobbs organization controlled such a significant portion of Ford production that the company discouraged them from having any more franchises,' says John Shanks, CEO of the modern-day Dobbs management company. 'I wasn't privy to it, but there was a lot of conversation between Ford and the Dobbses over it.'
In the less litigious society of the 1950s, Dobbs simply began to divest himself of his mammoth Ford holdings. One by one, he sold the stores to dealership managers, keeping only a single Ford franchise.
By the 1970s, Dobbs had diversified with an Anheuser-Busch distributorship, Wendy's restaurants, and finance and insurance businesses. Its only dealerships were a Ford outlet and a Chevrolet store.
In 1975, the current management company was set up, and it again began accumulating new-car franchises - but not Ford again. As of last week when Republic Industries arrived, Dobbs had 20 franchises, only two of them Ford.