Blue Chip Lubricants are Breaking New Ground as the First Franchise in its Market Segment.
When Gary and Kathleen Marais, owners of Blue Chip Lubricants, looked to expand their fast growing business which manufactures, markets and distributes a wide variety of high quality lubricants for the mining, automotive, engineering and industrial markets, they looked to what is without doubt the most successful business format of our times – franchising.
A chance meeting with franchising guru Eric Parker, one of the founders of the successful Nando’s brand and the country’s leading expert on franchising gave them the idea to go the franchise route. Says Gary,Our initial reaction was typical of most people that franchising was really only suited to some sectors such as fast food but we were surprised to learn that franchising can be adapted to suit any business sector. Our concern was in being able to offer our expanded client base the same product and level of service that our current clients enjoy.
According to Eric Parker of franchise consultants Franchising Plus, by replicating the franchise business format through owner-operator franchisees throughout the country, Blue Chip Lubricants would be able to become a leader in its industry sector. The franchise model is quite simple and fool-proof says Parker. By having a premium product, providing exceptional service and exceeding customer expectations through a strict mechanism of duplication and with the commitment of owner-operator franchisees, any business can thrive and grow and become a recognised brand.
According to Eric Parker South Africa is represented in only 17 business sectors compared to close to 100 in countries like the USA. What Blue Chip Lubricants is doing is breaking new ground in being the first in its industry sector to expand via the franchise route. This is exactly what South Africa needs dynamic and forward thinking entrepreneurs who are able to think big- by offering a myriad of small business opportunities to other entrepreneurs. It’s really a win-win situation – the customer gets a premium product with consistent service, opportunities abound for budding entrepreneurs and the economy is boosted by skills transfer and more importantly job creation.
Growing from humble beginnings, Blue Chip Lubricants established themselves in 1983 and have become experts in lubrication and cutting fluid technology manufacturing, marketing and distributing specialised, high performance and general lubricants nationally and to neighbouring countries. As one of the founder members of ILBA (Independent Lubricant Blenders Association) they have played a crucial role in making sure that they adhere to a high standard in blending, packaging, promoting and marketing whilst meeting the applicable industry standards, test specifications and operating procedures as prescribed by ILBA, SAE, API, SANS and other standard setting organisations recognised in the industry. They also play their part in promoting and encouraging the environmentally responsible collection and recycling of used oil and related waste towards the preservation of the environment as members of the Rose Foundation (Recycled Oil Saves the Environment).
Blue Chip Lubricants goal and their expansion plans include gaining national market share through franchising their brand and tapping into the largely untapped agricultural and retail markets in addition to their existing mining, industrial, engineering and automotive markets. Taking the leadership position through franchising and building a strong brand will open up opportunities to create alliances and synergies with both competitors and majors, convert independents and partner with retailers to create a store within a store concept that would tap into the retail market and build both market share and their brand.
Their proposed franchise roll-out will see them adopting the universal 3-tier franchise model of:
- Company owned outlets that allow the franchisor to keep its finger on the pulse of how the business is run and what improvements need to be done.
- Joint ventures (JV’s) where they jointly operate franchises in partnership with franchisees.
- Full franchises in outlying areas affording entrepreneurs throughout the country the opportunity to buy into the business and the brand. These franchisees would depend on the blenders for their services and products, reduce transportation costs and delivery time and increase the service levels to outlying customers.
The franchise expansion plan has started with a pilot operation running successfully and performing beyond expectations in Rustenburg. The expansion plan calls for 12 good franchises to be set up in major metros and larger towns with the aim to open 4 franchises in the first year. Once the model has been perfected in South Africa, the potential to master franchise into Africa is a very real possibility.
Gary and Kathleen Marais and the team at Blue Chip Lubricants are no strangers to breaking the mould and venturing into untried territory. Kathleen Marais was an employee of Blue Chip Lubricants in 1983 when she begged and borrowed to buy out the business, firmly believing that the concept could succeed in a large and growing market. We are excited to be moving into the progressive world of franchising says Kathleen, your management team is entrepreneurial enough to grow a franchise culture successfully and we will move mountains to ensure that our prospective franchisees are successful, our customers are happy and we become the first and best franchise brand in our sector!