The innovative Californians who developed the nationwide Century 21 network of franchised real estate brokerages are applying the same technique to an entirely different commodity: used cars.
They have begun selling franchises for a chain of used-car dealerships to be known as Triex, a name they hope to establish across the nation as a recognized symbol identifying their dealers just as Ford or Pontiac identify cars.
Triex dealers will sell used cars the way a real estate broker sells houses: on consignment from the owner, for a fee. The buyers will get a high-quality used car and a nationwide dealer network ready to stand behind a limited warranty, according to Triex executives.
Jim Cummings, former president of Century 21 and now president of Triexcellence Inc. of Santa Ana, Calif., the parent company of Triex, said Triex is developing "a complete image program" to put its novel idea across to sellers, buyers and dealers.
He said he and his partner, Century 21 founder Arthur Bartlett, together own 65 percent of Triex and are "probably two of the nation's most formidable experts in conversion franchising," which means adding a franchised trade name to an existing business.
According to Cummings, Triex franchises will be awarded only to new-car dealers who also sell used cars on their own lots. He said 20 dealers in the Los Angeles area and two in Phoenix already have plunked down the $10,000 fee to buy a Triex franchise, and marketing is now beginning in Dallas.
Marketing of franchises in the Washington area is expected to begin some time next year, Cummings said.
Triex says it expects to build a nationwide network of 3,000 to 5,000 dealers within five years.
The company's promotional literature quotes Cummings as saying "what America needs is a whole new way to buy and sell used cars." In fact, it appears to be the dealers who need a new way to buy and sell used cars, because most of the 11 million used cars sold in the country annually change hands in transactions between private individuals, and the dealers get nothing.
According to Cummings and dealers who have bought Triex franchises, the system works like this:
The owner of a car five years old or less who wishes to sell it turns it over to a Triex dealer on consignment. The dealer does not buy it, which means he ties up no capital; instead, he holds it on his lot for 30 or 60 days and, if it is sold, he delivers a prearranged amount to the owner. That is roughly similar to the process by which real estate brokers "list" houses owned by individuals, acting as agents and making money only if a sale is completed.
According to Triex, the advantages for the seller are freedom from advertising and paperwork, freedom from strangers visiting his or her property, and the presumed probability of a quick sale to a buyer attracted by the reputation for integrity that Triex says it plans to build.
For the buyer, the advantages are the acquisition of a car meeting Triex standards instead of an unknown quantity, a limited warranty on the vehicle, a selection of cars available in one place, and access to the financing and insurance that an established dealer can provide. Triex says that buying from one of its dealers saves the customer from contact with "some used-car dealers of possibly questionable veracity."
For the dealer, the advantages are the percentage of the take, as well as such ancillary benefits as increased showroom traffic and additional service work performed to bring the cars up to Triex standards.