Snaps On Tools overview
Snap On Tools Australia
How does a barrister's son from north London end up living and breathing the Snap On Tools business in Sydney's western suburbs? Nicholas Hudson has clocked up some miles in his journey to his current role as national franchise manager but his association with the brand started a long time ago. "I've used Snap On tools since I was a management apprentice with Jaguar cars in the UK. When I started the foreman asked me if I had my own tools, which of course I didn't, and then told me about the Snap On van that came every Tuesday. I haven't looked back."
Almost two decades on and Nick Hudson admits moving to Australia was the best decision he ever made. After working as service manager at the Sydney Porsche dealership he started his own business building customized hi-fi systems and mobile telephone installations for the more exotic marques (Porsche, Ferrari, Mercedes Benz, BMW) and he found Snap On Tools were available. By 1990 he had bought one of the first trucks on the road and invested in the NSW distributorship.
Five years later the company invited him to join the business as field manager. When talk turned to converting from dealerships to franchising, Hudson put up his hand and found himself enrolled at the University of New South Wales on a franchise management course.
It turns out that he loves franchising and finds it very satisfying to see people succeed. "Sometimes someone walks in and you know in 15 minutes they will be a success. But it is hard work and you'll be living on egg and chips for the first 12 months. We choose people from three growth parts for the potential franchisee to visit. We need them to see not just the successes but someone going through the pain of the first 18 months.
"Our guys love their work. We have one female franchisee but it is predominantly a male world. We get the family involved and wives and partners are very active in their support. There is always work to be done but it isn't like a coffee franchise where you are open seven days a week. It's essentially a weekday job but the books can be done in front of the tv and the van tidied in the driveway – that's much more conducive to a better life balance."
However a major challenge faced by the company is the misperception of the dollar required to invest in the lifestyle. As Nick says, "people understand the coffee business. They look at how it's done and think 'I can do that' and they know what it costs. Then they look at our product price and assume we are a million dollar franchise." In fact, the investment required includes training, stock, uniforms, working capital and computers. The $130,000 truck is leased by the franchisee who also purchases the stock, worth upwards of $110,000.
Unsurprisingly the majority of franchisees contact the company because they have seen and used the product and understand the system. Snap On Tools makes its money from selling product to franchisees; the brand has a 30% recognition factor within the professional tool user market and one aspect of Hudson's job is to explore new avenues to further raise the level of interest. Yet there are still 28 vacant franchises. "We probably have the opportunity for about 200 more trucks and we can cater for people who like remote areas, who like to sit for hours behind the windscreen, and we can cater for urban souls."
While the method of distribution is mobile, Hudson redefines the franchise as retail. "People think mobile is dog grooming, mowing and pizza – we are really in the retail category." For most sales outlets pedestrian traffic and space to lay out the wares are immutable components of the business: for a Snap On Tools business, although it is entirely a retail environment, the set up lacks high overheads and the franchisee takes the product to the customer. "Our sales environment is unique – we call on customers every week and build relationships, sometimes across generations. Some franchisees have been dealing with customers for 16 years since they were apprentices and now they are owners or service managers. It's a fascinating aspect of the business."
Typically, he indicates, most franchisees don't want employees; the business is one man, one van. But for franchisees wanting to expand, the company finds potential clients, a professional tool user repairing cars, boats, trucks, caravans, motorbikes. "Our top franchisee brings in about $3m." He is proud of the support structure that aims to safeguard the franchisees and the brand name with managers active in the field. "We monitor the franchisee and help them with a business plan. If someone had a change in their life and wants to get out we act quickly so they can leave with money in their pocket and we find someone more suited."
What he learned in his studies has been submerged in the on- the-job lessons and the post-education through the Franchise Council of Australia which has proved invaluable. "As a franchisor I must keep abreast of the business so I attend round tables and breakfasts, as well as talk to other franchisors. Franchisors are very open and ready to share. A little guarded about some things, but we're more than happy to help each other. We'd like to get recognition from the FCA so we're throwing our hat in the ring again for the awards program.
We've nominated a franchisee this time – it gives a lot more kudos and credibility for the franchise program. "I really enjoy franchising, the business angles and the legal aspects. I'm a bit of a frustrated lawyer, I think, and in another life I would probably choose to do law," he reflects. But in this life, "if I snapped my arm it would have Snap On written on it," he admits. "I love the company. I've been here 17 years, the production manager has been here 25 years, the MD 15. It's one of our strengths. Snap On is a flat organization, no-one stands on ceremony, and the variety is fantastic, it is one of the most attractive elements of the business. It is very satisfying to see people succeed."
This article appears courtesy of Snap On Tools .
18.09.2007
FCA Member
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Contact Snap-on Tools (Australia) Pty Ltd
Tel: 1300 054137
Fax: 02 9624 2445
