MR. TRANSMISSION ‘ZEE AIMS TO CHANGE AFRICA’S AUTO AFTERMARKET

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05/28/2019
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“This is going to sound corny,” warns Temi Adelu-Davis as she explains the impetus behind searching for an auto-related franchise to bring to Nigeria, “but what really tipped it over is love.” What started with a marriage proposal from then-boyfriend Glen Davis before Adelu-Davis moved home to her native Nigeria began a nearly five-year saga filled with delays, logistics challenges, bribery—or rather lack thereof—and ultimately perseverance to open a Mr. Transmission/Milex co-branded location in Africa’s most populous country.

“When I was going to say good-bye he said he was coming along and he proposed,” remembers Adelu-Davis of relocating from Houston, Texas, to Lagos, the largest city in Nigeria. “But what was he going to do in Nigeria?”

Temi Adelu-DavisTemi Adelu-Davis, along with husband Glen, opened a Mr. Transmission/Milex repair shop in Lagos, Nigeria (main photo), where she aims to improve the overall quality of the auto aftermarket industry and open nine more shops.

Her husband, a master technician, owned an auto repair shop in Houston, and after Adelu-Davis took a trip to visit her parents and survey the business landscape in Lagos she immediately saw opportunity in the auto aftermarket. “My mom’s 2012 Murano was just sitting there, she was having trouble getting it fixed,” says Adelu-Davis, noting her mom’s frustration first with an incident of faulty parts and then with a mechanic. “And if a mechanic didn’t do a good job, there’s no recourse. This seemed to be the story for everyone. …

Finding genuine parts is a problem and finding a skilled technician was a problem,” she says.

The auto aftermarket industry in Nigeria is also highly fragmented, meaning people have to take their vehicles to one shop for an A/C repair, another for the transmission, and yet another for an oil change. “There’s not a place to get everything done at once,” says Adelu-Davis.

‘Third-world problems’

Adelu-Davis, who has an executive MBA to go along with degrees in math, applied mathematics, quantitative methods and biostatistics—“My family is all engineers, I was the first one who wasn’t but I decided I was going to have more degrees than anyone,” she says—and Davis got to work evaluating franchises before meeting with Pete Baldine, president of Mr. Transmission/Milex franchisor Moran Family of Brands. Moran, Adelu-Davis says, had the right blueprint and “we knew they would give us the support we knew we’d need.”

After signing an area development agreement to open 10 locations, the Davises broke ground in March 2016 and earlier this year celebrated the grand opening of their store in the Lekki Peninsula area of Lagos. The time span in between brought what Adelu-Davis calls “third-world problems,” but notes she was prepared for many of the obstacles, such as delays in approval of the site plan.

“We did everything by the book so it took longer,” she explains, noting the prevalence of corruption and less-than-transparent government decision-making. “We anticipated them and we prepared for them; we could have done it easier if we bribed everyone, but that’s not what we were going to do.” Recalling another incident, this time with customs, Adelu-Davis says a pre-owned forklift bought for $4,500 was later valued by the government at $26,000, “so they taxed us for that amount. You can’t avoid it,” she says. “We took what the project would have cost and estimated two-and-a-half times that for unforeseen issues.”

In its Country Commercial Guide, the U.S. Commercial Service notes, “While Nigeria offers U.S. firms export opportunities in many sectors, it can pose some daunting challenges including the high cost of doing business in Nigeria, the need to duplicate essential infrastructure, the threat of crime and associated need for security countermeasures, corruption,” and also “the lack of effective judicial due process.”

Baldine and Midlothian, Illinois-based Moran felt prepared to navigate the regulatory environment in Nigeria, especially after addressing supply chain and intellectual property concerns early on. Picking through “a junkyard—a flea market for parts” is how Adelu-Davis describes the process for procuring auto parts in Lagos and other major Nigerian cities, so Baldine connected with suppliers Advance Auto Parts and Carquest to work through the logistics.

“We talked to them before we executed the deal with Temi to figure out how to make that happen,” says Baldine. Carquest undertook much of the legwork to research tax issues, permits and the process for transporting containers, and the Mr. Transmission/Milex store in Lagos doubles as a distribution center that will also supply future shops as the Davises sign sub-franchisees.

The Mr. Transmission/Milex shop in LagosThe Mr. Transmission/Milex shop in Lagos doubles as a distribution center for future locations.

“We’ve established the parts supply in that market, so we’ll require franchisees to purchase through the master franchisee warehouse,” he says, adding the company will duplicate this framework as it looks to open locations in Liberia, where it has a 10-store agreement, and elsewhere outside the U.S. Moran Family of Brands also secured IP and trademark protections early on, and Baldine says despite the roadblocks his company was “willing to step up to the plate” and is now looking to enter other regions without an established auto aftermarket.

The United Arab Emirates, Oman, Bahrain and India are all potential markets where “there are high-end dealerships and backyard mechanics, but really nothing in between,” says Baldine. International development will come through master agreements, and Baldine notes he’ll look for franchisees like Adelu-Davis with local ties and familiarity with the business environment. Richard Adelu, her father, spent decades working in Nigeria’s oil sector and later started an event rental company. Her father’s success is yet another motivating factor for Adelu-Davis.

“My father’s name is synonymous with petroleum in my country,” she says. “Everyone in the industry knows him. So I wanted to have my legacy. I’m an only child, so to be an only child and then I’m a girl … I wanted to build my own success.”

Fulfilling a need

A soft opening in late 2018 proved the demand is there for a Mr. Transmission/Milex shop that guarantees an oil change within 30 minutes and provides a range of services and repairs for everything from transmissions and brakes to air conditioners and radiators. They’re servicing 30 to 40 cars per day, and Adelu-Davis notes she’s done “zero advertising.”

“All I’ve done is maintain a social media presence,” she says. “It’s all word of mouth and by trust, that’s primarily how business is done here.” Labor is “still a huge challenge,” and her husband is “overworked,” but they’ve hired five technicians and as a master technician Davis is able to handle much of the training.

A second location is set to open in June after they signed a franchisee to convert an existing repair shop in Lagos to Mr. Transmission/Milex and Adelu-Davis expects more to follow soon.

Nigeria’s upper middle class is growing, with many people like Adelu-Davis “trying to go back home, but all the amenities they’re used to aren’t there.”

“This is the perfect time for any company to come to Nigeria,” she continues. Indeed the country has the highest GDP in Africa, $376.4 billion in 2017, and while still heavily dependent on oil it is in the midst of implementing the government’s Economic Recovery and Growth Plan, which focuses on diversifying the economy.

From her vantage point, Adelu-Davis wants the Mr. Transmission/Milex model to also bring transparency to the repair process by educating customers and helping them make smart decisions. “That’s unheard of here,” she says, acknowledging there’s been some pushback to the hourly billing structure instead of flat rates. But customers soon realize this prevents the upcharging practice that Adelu-Davis says is common elsewhere.

“I’m trying to change the entire market,” she says. “I’m not trying to just open one shop.”

Article published by Franchise Times May 28th, 2019.

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