Superior Tire and Auto is celebrating 75 years in business this month. What makes a company in any business field a success, let alone one in the tire and auto service industry? Traction News sat down with Superior’s president, Frank Bongiovanni, to find out what his company’s secret is.
Humble beginnings with a small shop
Superior Tire and Auto started in 1942 when Walter Chudy rented a small building from a dairy in East Toronto at Danforth and Greenwood. Because of the rubber rationing in effect due to the war, Chudy started out patching and vulcanizing tires. Soon afterwards, Chudy learned how to retread tires and began building his business selling these retreads.
By 1952 his business had outgrown the original building which was located behind the dairy. Chudy and some friends built a new building at Victoria Park and Danforth for the expanding company to move into. It was also around this time that rubber once again became available and Chudy was able to start selling new tires (Dunlop and then BFGoodrich) as well as his retreads.
The company begins to expand after 30 years
Superior Tire became one of Toronto’s premiere retail tire stores in the seventies. The Scarborough address, 5070 Sheppard Avenue East, became the location of their second store, which is now their head office. Three years later saw the opening of store number three on Dufferin Street. Both are successful stores to this date.
In 1978 Paul Hyatt bought the company from Walter Chudy after Hyatt became president and CEO. Remarkably, Hyatt began working for the company at its original location at the age of 17 and is still with the company after more than 60 years.
The company currently has 73 people on the payroll spread between the 14 stores and the head office. Some stores have four people working them, while busier ones have six. There are three people working at the head office. One of them, Steve Fountain, has been with the company for 43 years, spending his first 4 ½ years with the company as a tire man. The current office manager, Patti Loretta, started as in an administration role 28 years ago.
Franchising to spread the success
The company’s current president, Frank Bongiovanni, and Howard Minsker, became the company’s first franchisees in 1991 at the Danforth location. They stayed at that location until 2003, when they sold to another franchisee and Bongiovanni went to work at the head office as Business Development Manager. Minsker took over store number three on Dufferin at that time. Eleven more stores were opened during Bongiovanni’s tenure as Business Development Manager, bringing the total number of stores to 14. They bought the company from Hyatt in 2012 and are the current owners to this date.
Success hasn’t always followed a new store opening
Bongiovanni told Traction News that not all of the stores the company opened were successful and some had to be closed — proving that any company can suffer a bloody nose. He said the important thing was to learn from it and not make the same mistakes again.
Superior prefers a franchisee to have a long-term commitment
Bongiovanni says that Superior Tire and Auto has what they call a selective franchise program. What this means is that a prospective franchisee is checked out thoroughly before being brought into the Superior fold and being allowed to open a store. This is because they feel that changing franchisees and management is too much trouble and costs the company too much in time and money.
To this end, when considering a prospective franchisee, they look at this person’s background for business acumen and ensure their financial strength before offering them a franchise. Prior industry experience is nice, but since Superior has an excellent training program, it’s not a requirement.
Their franchise program is set up to give a franchisee the best shot at succeeding. This program means they have franchisees that have been with them for ten and 20 years. Until recently three of their franchisees owned more than one location.
People make up one part of the recipe to success
This won’t come as a surprise to anyone in business, but Bongiovanni said getting the right people to staff a store is the most important ingredient in their recipe for success. However, even the best people can’t overcome a rent that’s too high, so finding the right building for the right price is also important. Lastly, since no company can succeed if their customers don’t know about them, getting the stores the right kind of exposure is also paramount to helping them succeed.
According to Bongiovanni: “Our success is related in part to the proactive approach everyone takes to achieve superior customer service and value. For over 75 years, one of the main reasons of Superior Tire and Auto’s success is the hard work and dedication of everyone from the head office to the shop floor. From day one, we provided quality products, value pricing, and ‘feel good’ customer service while striving consistently to exceed our customer and employee expectations.”
There are a number of independent tire dealers out there that have built up a loyal following without being under a larger franchise umbrella. Superior’s Associate Dealer Program allows independents falling on hard times to benefit from the corporate umbrella while still retaining independence. Bongiovanni says they see this program expanding as competition in the marketplace gets even tougher.
Spread between tires and service is fairly equal
Bongiovanni says their business is split fairly evenly between tire sales and auto mechanical services. Currently about 55 percent of their business is tire sales while 45 percent are mechanical services. He said that until recently this split was 60/40. On a seasonal note, it appears that winter is their best time of the year for suspension services.
While they sell a wide variety of tire brands, most of their sales were of Toyo, Michelin, and Bridgestone brands last year. They’ve also started to see a spike in the popularity of private label tire sales.
The challenges to success and future growth
Bongiovanni says that competition is the biggest challenge that any tire shop has right now. The industry is super-saturated, meaning the competition can be cutthroat at times. This means that their margins aren’t what they used to be, but they pride themselves on keeping their customers happy.
People are the main challenge to the future growth of the company. They want the right franchisee to open their next store. That franchisee is going to need the right people working the store to ensure that quality work is carried out in a timely fashion so customers drive away happy.
Internet marketing brings in more these days
Superior Corporate helps franchisees with marketing campaigns in a variety of mediums including TV, radio, Internet, and social media. “Although the radio and TV provide corporate branding, we find internet marketing provides a more immediate response.” Franchisees are also expected to do their own local area marketing to ensure exposure.