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CarShock outlines franchise strategy

CarShock, which has grown from one to five new and nearly-new sites since 2002, is franchising its brand and wants a 20-strong network before the end of 2007. In the year to May, the company made a pre-tax profit of £132,000 on turnover of £14m.

Mike Porritt, managing director and founder, says: “I see no reason why we shouldn’t have representation in every significant UK conurbation within five years. Franchising is the quickest way to establish a national network.”

CarShock is well behind the business plans outlined to AM in late 2003. Then, Porritt claimed the company would have eight sites, turning over £40m in 2004. By the end of 2006 he wanted 16 sites and £80m-plus turnover.

Former Fiat UK used car and logistics director Rob Hatfield, who this month joined CarShock as franchising manager, is charged with delivering the new plan. He is looking for successful managers who want to run their own businesses and disillusioned dealer principals.

“We have a sales model that works and have identified why CarShock failed to achieve its planned growth,” he says.

“Those reasons must remain confidential.”

Franchisees must find an initial £30,000, though much of that will go back into the business through signage, computers and other support mechanism.

Those seeking the franchise will also have to find suitable land, capable of holding around 75 cars. CarShock works on eight stock turns annually, with the aim of at least 600 sales a year.

Franchisees will have access to CarShock’s stock acquisition, which it says comes “mainly from overseas at incredibly low wholesale prices”. It keeps the stock mix simple, says Hatfield, and buys only what it knows it can sell – mainly Fords, Renaults, Nissans and Vauxhalls.

CarShock started at Newcastle-upon-Tyne and has added sites at Gateshead, Leeds, Darlington and, most recently, Middlesbrough. “We have a mix of freehold and leased sites, and are just about to buy the one at Gateshead. CarShock will retain the north-east as its own area and franchise other regions. We advertise on regional TV and our research suggests our brand is becoming known, just like Vardy’s,” Hatfield says.

His confidence in achieving rapid growth is based on the view that people in Britain pay too much for cars.

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