Inside Business: An earth-shattering success
Investors in Pirtek knew they were right when their bank manager joined them, writes Roger Trapp
Sunday 11 August 1996
First, find a business that was in the middle ages in terms of development. Second, see if modern service methods could be used to bring it up to date. Third, make sure that the business had a universal, rather than specialist, application. Fourth, ensure that there were many small customers rather than a few big ones who could drag it under if they hit hard times.
The business that met their requirements was a long way from the one that made them the money they had to invest. But a decade on, it shows no signs of letting them down. Pirtek UK, a nationwide mobile hydraulics repair service, is a rare example of a franchise operation that isindustrial. With 59 franchises around the country, it has prospered and suffered very little franchisee fall-out.
Mr Petrie, who met Mr Brennan when they were both advertising executives in the regional newspaper business, attributes this to strict controls and the franchising experience the two of them gained as directors of Prontaprint, the printing service.
"We have a good set of people as franchisees. They have to invest about pounds 70,000 liquid. If they've got that kind of money, they've done something right in their lives," he says, adding that he and his small team support their general commercial ability with technical expertise.
Nor is this confined to knowledge of hydraulics. Mr Petrie and his colleagues follow up the month-long training course at the company's headquarters in Acton, west London, that every franchisee has to go through, with assistance in such areas as sales and financial management. The head office compiles the franchisees' monthly accounts until they can do it on their own.
Mr Petrie says this help, when combined with back-up in such areas as sales and product promotion, amounts to "a powerful support package". But it also enables the founders to keep a close eye on each operation's progress and allows them to tackle problems by sending in help before it is too late.
All franchises impose a certain amount of control over those who operate them. The attraction, after all, is that the franchisee is buying into a supposedly proven business format. But Pirtek, which is named after the Pirelli technology that it uses, requires its franchisees to co-operate with each other more than they might otherwise expect.
Since it was set up in Britain in 1988 the aim has been to have a national network of operations offering construction contractors, farmers, factories and other users of hydraulic equipment a within-the-hour service. To make that happen has meant not just expanding fast, but requiring each operation to contact its neighbours if it is not confident it can get a van to the scene of the problem within the time allowed. To encourage this, operations are rewarded for the number of contracts they sell rather than the amount of repair work done.
It is all part of a business philosophy that Mr Petrie characterises as "based on safety rather than Ferraris and yachts".
Mr Brennan came across it while doing consultancy work in Australia in the mid-1980s. When Prontaprint was bought, Mr Petrie joined him there for five weeks' research which encouraged them to think that the notion of a network of mobile hydraulics mechanics was viable in Britain. But even then they were cautious. They initially thought that the climate in Australia was more amenable to this sort of activity until they realised that heat could be as difficult to work in as the cold. Then there were the cultural issues. Would digger drivers, for instance, welcome a quick repair, or would they resent not being in charge of the work or being deprived of a lengthy break while somebody else was despatched with the offending part?
In an effort to answer such questions, when the two men opened the British operation as a joint venture with Peter Duncan and an Australian colleague, Mr Brennan worked from the original depot in London's Park Royal as a mechanic, while Mr Petrie went knocking on doors to sell the concept.
In the first year, 1988-89, they comfortably beat their sales target with a turnover of pounds 220,000. When the recession came soon after, they could have been expected to suffer. On the contrary, they prospered, because lack of work led contractors to keep their machinery longer and to close many of their workshops.
With 420 people employed throughout the chain, and 240 mobile workshops, Pirtek is comfortably the largest operation of its type in the country, claims Mr Petrie. Most of the competitors are one-man bands.
Possibly the greatest accolade came when the first franchise was bought by the duo's bank manager after redundancy. Since then, one or two other members of that notoriously cautious breed have signed up. As Mr Brennan says: "Where there's muck there's brass."
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