Retail

Why Point S and ITDG parted ways

Posted on June 1, 2015

With the news last week that the Tire Factory Inc. and Unimax Tire Ltd. will join the Point S network comes this question: "What happened to the Point S Development and Independent Tire Dealer Group (ITDG) agreement signed in 2011?"

Michael Cox, CEO and president of ITDG, told Modern Tire Dealer that his group and Point S “rescinded our agreement earlier this year and would look for possible opportunities in the future.”

When asked why the two parted company, Cox explained it this way.

“It all started as a chance meeting in Bologna, Italy, in 2008 at the Autopromotec Show when we first met. Fabien Bouquet, deputy managing director of Point S, and I started a conversation about how we could find common synergies between our two organizations. We both had groups with many similar concepts and we thought that we could benefit from each organization’s attributes.

“We signed a Master Franchise Agreement at SEMA in 2011. Although we had several common (tire) suppliers, we could not find a way to leverage those relationships to benefit either organization -- specifically regarding European sizes, DOT, tread designs, etc.

“The other more important issue is that Point S is a franchise arrangement as defined in the U.S. marketplace. A franchise business is a business in which the owners, or 'franchisors,' have the same logo, name and model. Franchises are an extremely common way of doing business. In fact, it's difficult to drive more than a few blocks in most cities without seeing a franchise business. Examples of well-known franchise business models include McDonald's, Subway, etc. In the United States, there are franchise business opportunities available across a wide variety of industries.

“ITDG is comprised of independent tire dealers throughout the country that could not be categorized, nor identified as a single entity. Each of our members and shareholders have developed their own businesses over years of operations. Therefore, it would be impossible and unwise for them to conform to a new business format.”

Cox is now looking to the future. The ITDG has a presence in 41 states, with more than 550 retail locations and 144 members and 97 shareholders participating. Cox is expecting combined ITDG purchases to exceed $200 million in 2015.

Related Topics: ITDG, Mike Cox, Point S, Tire Factory

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