Snap-on Tools Hits the Nail on the Head

By Jennifer Wang of Entrepreneur.com



Founded in 1920, Kenosha, Wisc.-based Snap-on Tools entered the franchising business in 1991. Over the past 18 years, it's grown into one of the largest nonfood franchise systems in the world, with nearly 5,000 Snap-on Tools stores worldwide.

The company, which provides equipment and tools for professional technicians in industries such as auto, aviation and electronics, has a long history of success.

Barry Young, president of sales and franchising, attributes this to the quality of the company's products and the value the company places on its franchisees. "We have a lot of people in the field to help store owners grow and develop their business," he says, noting that the ratio of support specialists to franchisees is nine to one.

Franchisees are also fortunate in that Snap-on has its own financing company, whose main purpose is to offer credit to customers. But this also comes in handy during an economic downturn. "Many franchise systems today are struggling to find prospective franchisees who can raise the money for a start-up; but when we find the right applicant, there's almost no reason why we wouldn't lend [him or her] the money."

Perhaps the best testament to Snap-on's system is the number of families within it. "We've got franchisees who've been with us for three decades or more and, over time, they've introduced their sons or daughters into it." In fact, Young says, nearly half of successful new applicants are referrals from the existing network.

Another competitive advantage is the mobility of its stores: All franchisees operate out of sophisticated, well-merchandised Snap-on trucks. While fixed-site storefronts are suffering from people's thriftier spending habits, mobile operations allow business owners to be proactive, Young says. "We're able to make sure that not only are we offering new products for sale, but we're servicing all those products bought off us already."