CHICAGO -- Retail giant Sears Holdings Corp. hopes to expand its Sears Auto Center network by recruiting former car dealers as franchisees.
Sears said today it is launching the Independent Sears Auto Center franchise program, allowing auto dealers who lost their GM or Chrysler franchises to operate as licensed Sears Auto Centers.
The company said Coleman Auto Group of East Windsor, N.J., is the first car dealership to take advantage of the program and will open a Sears Auto Center March 27 on the site of its former Chrysler dealership.
“Sears designed the new franchise program to help those dealers leverage their facilities by building a set of businesses around parts and services, over-the-counter merchandise, and previously-owned vehicle sales,” Sears said in a statement.
The Sears Auto Center franchise locations will provide the same products and services for automobiles, light trucks and motorcycles that are offered at the nearly 850 company-owned Sears Auto Centers across the country.
Sears expects many of the new franchise locations to be located on properties adjacent to pre-owned vehicle and body shop operations.
“This is also a great opportunity for dealers who are currently selling used cars to gain a brand that’s nationally recognized for quality and dependability, a resource for buying high-quality auto parts and supplies, and access to a proven business model that has been tailored to their needs,” Bill Jackson, president of Sears Authorized Independent Auto Centers LLC, said in a statement.
According to Sears, the franchise advantage includes:
The strength of the Sears, DieHard and Craftsman brands;
The ability to leverage Sears marketing, Web presence and social networking;
Purchasing power on tires, batteries, parts, equipment and supplies; and
Access to the Sears credit card and the corporate systems and processes.
Last year, as General Motors Co. and Chrysler Group LLC went through government-sponsored bankruptcies, the auto makers began pulling the franchises, with GM notifying some 1,350 dealerships and Chrysler almost 800. However, a law passed by Congress and signed in December by President Barack Obama set up arbitration for rejected GM and Chrysler dealerships that want reinstatement.
More than 1,550 car dealerships gave notice that they intended to seek reinstatement through arbitration --triple the number expected by the American Arbitration Association, which is overseeing the program. More than half of the 2,789 car dealerships eligible to seek reinstatement gave notice by the law’s Jan. 25 deadline that they intend to do so. That included 409 of the 789 shuttered Chrysler showrooms.