Opportunities drive China plan

By exporting his Western Australian-based car cleaning franchise, Car Care, into China, franchisor Mike Stringer expects to generate growth on a scale that could not be achieved in Australia.

A former marketing employee with photographic giant Canon, Mr Stringer bought Car Care – along with franchised cleaning business, Housework Heroes – when he arrived in Perth from the UK three years ago.

Having already exported Car Care to New Zealand, Mr Stringer recently signed a joint venture agreement with a car restoration company in Singapore, which had been keen to align with a Western brand and expand into China. 

Mr Stringer said China offered huge potential for Car Care, containing 100 cities, each with a similar population size to Perth.

“Car detailing over there is huge, much bigger than here. Every second shop is a car detailer shop,” he said.

“You only have to scrape the surface to achieve a lot more.”

Car Care will diversify into paint protection in China, with plans to offer additional services in the new car, after-market sector in the future.

“We’re looking to be more that just a car detailer. The bigger plan for there is to actually be a car services [franchise],” he said.

Mr Stringer said the company would be aiming to sign joint ventures with individual partners in China, rather than establishing a master franchisee or area development franchise model.

He said while an active expansion in China had not been part of the company’s growth strategy before, having a partner who knew the industry and had connections in China had been a major incentive, especially when considering risk factors, such as capital investment.

“We haven’t got a million dollars to plough into China and see how it goes,” Mr Stringer said.

Another advantage was the opportunity to bring synergies learned in China back to Australia, to incorporate into the business model here.

Mr Stringer said other international markets were being considered, including Malaysia, where a master franchisee licence was being negotiated, as well as Taiwan and India.

Car Care is also developing a new product range in China to take advantage of cost effective systems there.

Mr Stringer said while the initial stages of planning an expansion had been slow, he expected activity to take off. 

“We’ve taken over a year to establish this – things don’t move very quickly,” he said.

“It’s like most things in life – when you get big, everything comes to you. When you reach a certain level, everything sort of comes out of the woodwork.” 

Mr Stringer said Australian franchisors rarely made an active decision to enter the Chinese market, instead taking advantage of opportunities as they came up.

This is supported by research from Griffith University, which found about half of franchisors surveyed expanded overseas after they were approached by international investors.

Mr Stringer said New Zealand had been a natural first step for Car Care’s international growth.

“Australia’s a small place – you reach critical mass and you think, ‘where can I go from here?’,” he said.

“Everyone goes to New Zealand first.”

Car Care is a nationwide franchise with 105 outlets, including 31 in WA, and covers all states and territories, excluding the Northern Territory.

It has an annual revenue of about $8 million.