Fix Auto Bury St Edmunds enters administration and Fix Auto Huntingdon picks up the territory
David Calder, Fix Auto's operations director, has issued a statement regarding one of the group's franchisees.
‘It is with considerable regret that we announce that Fix Auto Bury St Edmunds has entered administration, another example of a bodyshop closure brought about by cashflow and funding problems affecting the body repair industry.
‘While the overall financial standing of the Fix Auto network is actually stronger than at this time last year, your Advisory Committee has already identified this pernicious market trend as requiring urgent attention. At its meeting last week, the Committee asked that we enter into dialogue with leading banks to seek the availability of improved funding for franchisees based on the detailed operational work now being undertaken to secure improved franchisee credit ratings.
‘Meanwhile, Fix Auto has already made arrangements to ensure Fix Auto Bury St Edmunds’ territory is operationally sustained; Fix Auto Huntingdon has secured the territorial licence formerly owned by Fix Auto Bury St Edmunds and will continue to provide service to customers in the locality.
‘You will also recall that in the October issue of InfoFix, Fix Auto’s non-executive Chairman Robert Hadfield made the following observations about the matter:
‘Recent franchisee closures have been most disappointing and distressing for all concerned. Nevertheless, I’ve previously warned there would be an element of short-term attrition within the initial Fix Auto network, particularly among those who found themselves unable to keep pace with the market agenda.
‘From the point of brand protection and the future livelihoods of those at risk and their employees, I had rather hoped this attrition process could have been managed by mutual agreement rather than the terminal decline of individuals concerned. However, such is the rapid pace of change taking place in our sector that commercial reality has overtaken sentiment and has regrettably brought about a premature end for some.
‘As you’re aware, the current franchise agreement provides little scope for commercial intervention in circumstances such as these unless a franchisee invites our help or is found, through audit, to be damaging the brand in some way during the process of decline.
‘I suggest the current volatile market conditions make it necessary to consider revisions to the agreement to avoid collateral brand damage when financial governance is threatened. I’ll be looking at this area with colleagues to ensure all franchisees’ positions are protected through safeguarding the brand.
‘It’s by no means all gloom and doom, though. The upside is that new franchisee appointments are strong, healthy and keen to invest which provides the sustainability and scaleability model required by our customers. The fantastic demonstration of commitment by franchisees at the recent BE2011 event and awards is testimony to their passionate buy-in to the flexibility, durability and longevity of the Fix Auto proposition; in addition, the pipeline and quality of franchisee applicants and interest from customers and suppliers in Fix Auto has never been stronger.
‘Meanwhile our agenda remains constant: To provide sustainable, scaleable national coverage while measuring network performance and providing consistent best in class outcomes for our customers.’
David Calder concluded: ‘This latter point is underscored by the fact that, despite this latest casualty, Fix Auto has enjoyed a record 36% net growth in the appointment of new franchisees in 2011’.