Question-and-Answer Session
Operator
(Operator Instructions) We’ll take our first question from Anthony F. Cristello- BB&T Capital Markets.
Anthony F. Cristello- BB&T Capital Markets
A couple questions, one I want to talk about SpeeDee and when you talk about some co-branding, how many stores do you expect to co-brand on a trial basis?
Alan D. Feldman
We’re in the middle of that analysis as we speak, Tony, but on a trial basis it will probably be five to ten at the most.
Anthony F. Cristello- BB&T Capital Markets
When you look at, and again maybe you’re not far enough along in the process, how many SpeeDee locations can you open up along a contiguous Midas location? Can that market support two or three or is it one or is it five? How should I look at that from a growth standpoint, bigger picture?
Alan D. Feldman
Assuming we can co-brand SpeeDee into Midas locations, if that’s your question?
Anthony F. Cristello- BB&T Capital Markets
Yes.
Alan D. Feldman
And assuming that that works effectively as we believe it will and as do our Midas franchisees there is no reason to believe that we are limited at all in terms of density. SpeeDee has markets, New Orleans as an example where they have four locations on the main street within several miles. The oil change business probably has a smaller radius to work with. Does that help you?
Anthony F. Cristello- BB&T Capital Markets
That certainly does. Is there some level of training that, they’re two different businesses although with the four service bays at the SpeeDee locations you certainly have some complementary opportunities but I’m wondering does the existing Midas franchise operator have to understand anything different about the SpeeDee location or how that business works?
Alan D. Feldman
They have to understand how to deliver a SpeeDee oil change. Our current oil change program is more on a 30 minute to 45 minute basis and that is not what the SpeeDee customers’ expectations would be. So we have some operational issues we have to work through, we have some POS issues we need to work through. Bill is probably better qualified to talk about this than me since he’s going to lead this effort. But I’m confident that we’re going to be able to figure that out and make sure that we deliver an oil change meeting the expectations of SpeeDee customers. One of the most important things we want to do is build the power of that brand as we expand it. We don’t want to disappoint customers.
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