International Law

Proctor & Gamble Succeed in Car Washing Franchising?

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Michael Garner, writing at Blue Mau Mau, wonders about P&G's entry in franchising.

As reported in the WSJ, to jump-start plans for a nationwide chain of Mr. Clean Car Wash franchises, P&G in December acquired the franchise assets of Atlanta-based Carnett's Car Wash, which has 14 locations.

But Michael Garner wonders: 

"With Proctor & Gamble, we have one of the country's oldest continuously operating public corporations, with a somewhat rigid and old-fashioned corporate culture, entering into franchising.

Will it be able to inspire and lead franchisees?

Will it have the flexibility to move quickly?

Will franchising be a business that P&G truly cares about, or will it be only an appendage to the big business of selling soap and toothpaste?

Hiring Amos to lead the effort is a dubious call: He's reputed to have a style of bullyism with franchisees, and was found liable for misrepresentation in connection with selling Sona Med Spa franchises.

He has no record in the car wash or dry cleaning fields."

Let's move past Jim Amos, and the deserved skepticism about his abilities as a "franchise leader"

What makes anyone think that the car wash industry can be franchised?  Does the customer drive up and down the highway looking for the exact right car wash?  Or does he simply go to the car wash in his local area?  What value would a brand name have for such a consumer when his choice is already clear?

Now, on the other hand, it would make sense for P&G to enter into distributorship agreements with many car washes in return for advertising the P&G product used in the car wash.  This would be a straight licensing agreement and not a franchise.

Full post as published by Misleading Advertising Law on February 11, 2009 (boomark / email).