Los Angeles consultant Mark Rikess has been advising auto retailers on how to run their businesses for years. Now he's offering to do it for them.
Arcata will be responsible for all issues of day-to-day management in exchange for 50 percent of any profits generated.
In the past 60 days, Arcata has begun operating three dealerships — a store in Georgia, a second in Maryland and a third location Rikess declined to identify.
The role of a store turnaround artist is hardly new. Dealerships often bring in a new general manager or even a new management team to turn around a failing store.
But Rikess' approach is different — and that is going to make some automakers uncomfortable, Rikess admits.
Arcata is proposing to operate stores around the country simultaneously. That would make the business similar to a multilocation retail chain. Factories have struggled with the idea of allowing independent dealers to sell their stores to national chains. Some brands have blocked such sales.
"The difference is that we're not trying to own the store," said Rikess, who is the venture's CEO. "We are basically turnaround specialists. We're only going to run it, and after three years, we're going to give it back to the dealer."
He says that, at least privately, he has received approval for the idea in conversations with a number of automakers. But they remain nervous about openly endorsing the idea.
Once in place, Arcata would take over all staffing, accounting, sales training and advertising, in addition to daily management.
In the case of a family owned store that had a son or daughter in the wings to take it over, Arcata would help train the family member to take the helm at the end of Arcata's three-year contract.
Rikess said he has a staff of 10 managers to operate the stores but will increase that number as more stores come into the fold.