Call it Grease Wars: Round 2. Round 1 featured hamburger emporiums firing all-beef-patties in the battle for fast-food dollars. Round 2 is the story of fast-lube companies that believe consumers will pay $26 for a 10-minute oil change as readily as they spend $2.60 for a burger and fries. And Round 2 promises to be as hard-fought and controversial as Round 1. Just as the fast-food companies have sparked a debate about the nutritional value of their products, the fast-lube shops have touched off a fight about the quality of their services.
Both disputes involve defenders of markets threatened by upstarts -- full-service restaurants versus fast-food outlets, and full-service auto repair businesses against the quick-grease artists.
The fast-lubers -- Jiffy Lube, Minit Lube, Grease Monkey, SpeeDee Oil Change, Grease 'n Go and a host of others -- are popping up all over the country. Their target is the estimated $3.1-billion national oil-change market for passenger cars and light trucks.
Only about $400 million of the auto oil-change business now goes to fast-lube shops. But owners of those franchises see more bucks coming -- as much as $650 million by 1990, and more than $1 billion by 1995, according to the Convenient Auto Service Institute, a Washington-based lobby for the fast-lube industry.
A lot of that money will come from the Washington metropolitan area -- the sixth-largest in the country in new-car sales, according to Sales & Marketing Management magazine, a New York-based periodical specializing in research on consumer demographics.
Washington area residents spend about $5.8 billion a year on new vehicles. That means the average household here spends about $4,747 annually on cars, which puts Greater Washington at the top of the list of 10 major metropolitan areas in that category.
Those kinds of numbers excite the fast-lube entrepreneurs. People who buy cars must maintain them. And with an average annual household income of $44,474, Washington area residents are able to pay someone else to do the job, the fast-lube chiefs say.
"This is a growth market for us," said W. James Hindman, chairman of Baltimore-based Jiffy Lube International Inc., America's largest fast-lube chain with 600 shops nationwide.
"We just know that there are a lot of people out there who want this service. But a lot of them, people who don't have time to change their own oil, don't know what we have to offer," Hindman said.
For $25.95, his franchised shops -- 30 of them in the Washington area -- will change a vehicle's oil and oil filter and lubricate its chassis.
Three-member "lube tech" teams check and fill fluid reservoirs -- transmission, differential, brakes, window washer and battery -- in about 14 minutes, working underneath and above vehicles that move over trenches in assembly-line fashion.
Extra services, such as replacing air-conditioner refrigerant and changing automatic-transmission fluid, cost $6 to $10 more.
"What we're really selling is convenience, not oil," said Nick Knight, general manager of the Westminster, Md.-based Alary Management Corp., which operates nine Jiffy Lube shops in the Washington area.
"Let's face it. People can get their oil changed anywhere, and probably for less than we charge them," Knight said. "They come to us because we do it fast and do it right, and we treat them like we appreciate their business."
Random observation seems to support Knight's claim. A reporter visiting several local Jiffy Lube shops last week found lots of quick-grease action. At the Fairfax Jiffy Lube, for example, cars and vans were rolling in so fast that a backlog developed.
"It takes a little longer than 10 minutes to get the job done, but that's okay," said Alan W. York Jr. of Fairfax Station, a sales representative for seven U.S. manufacturing companies.
"I drive an awful lot, often as much as 200 miles a day," York said. "My car is my tool. Every time my odometer turns 3,000 miles, I get my oil changed. I use these folks because they're all over the place and they have a bit of quality control," York said of the Jiffy Lube franchises. York's car was in and out of the shop in about 18 minutes.
According to CASI and other fast-lube industry officials, Jiffy Lube's local shops handle an average of 90 cars a day, compared with a daily average of 44 cars at other Jiffy Lube shops nationwide. Officials said the average tab nationally is $27 per car, which would provide average monthly sales of $31,000. They said they could not give local figures, but that performance in the Washington area is "considerably higher."
"The Jiffy Lube centers are pulling in 90 or so cars a day in the Washington area, and they're not even trying. It's incredible," said Ward Rasmussen, president of Grease 'n Go Realty, the real estate arm of Grease 'n Go Inc., which is based in Mesa, Ariz.
Grease 'n Go, as a result, is scrambling to get its shops going in this area, too, Rasmussen said. "Right now, there's no one in the Washington area to rival Jiffy Lube. We think there's space for us," Rasmussen said. His company has sold franchise rights to establish 35 shops in this area within the next two years, he added.
SpeeDee Oil Change, a New Orleans-based quick-lube outfit, is also eying the Potomac.
"We're just starting out. We've got about 24 stores around the country. But we're planning to open about 10 stores in the Washington area by mid-1988 and 10 more at the end of that year," said SpeeDee spokesman Laurence August. SpeeDee hopes to put a dent in Jiffy Lube's position in the Washington market by offering a wider range of routine maintenance auto services, such as basic tuneups, August said.
Fast-lube companies do not offer major auto repair work. Anything that takes a lot of time slows up the service lines and plays havoc with the quick-lube convenience theme.
But August said SpeeDee can reduce Jiffy Lube's 10-minute oil-change time to 9 minutes "and perform a complete tuneup in less than half an hour."
That kind of talk raises the eyebrows of service managers at new-car dealerships and full-service stations.
"We get quite a few of those fast-lube jobs, after they've been done," said Stephen Coleman, service manager at Sport Chevrolet in the Montgomery County Auto Park.
But, Coleman conceded, the emergence of the fast-lube shops, of which there are about 1,500 across the country, has prompted Sport Chevrolet to put up a fast-lube shop of its own next to the dealership.
"We call it Sport Lube," said Coleman. "We'll do a lube job, oil and filter change and top off all of the fluid levels. Price is $20.95."
So, what's the difference between Sport Lube and a Jiffy Lube? "Our people are trained mechanics," said Coleman. "They're trained to look for problem areas in a car. If they find something, they'll tell the customer."
Other car dealers complain privately that fast-lube shops frequently mislead customers. For example, they cite a case in Pennsylvania last month where a Jiffy Lube franchisee agreed to discontinue sales practices that State Attorney General LeRoy S. Zimmerman called deceitful.
The 12 Pennsylvania Jiffy Lube stations, operated by Tri-State Quick Lube of Cherry Hill, N.J., were accused of tricking people into getting unneeded transmission and differential fluid changes by showing them "dirty" samples of fluids allegedly taken from their cars.
Tri-State accepted a compliance agreement without an admission of guilt; and Jiffy Lube International officials instructed all of its franchisees to eliminate bogus fluid comparison tests.
Knight and other Jiffy Lube officials acknowledged that they are held in low esteem by dealership service managers and owners of full-service stations.
"The dealers don't like us because we got the business that they didn't want. But, it's not our fault that they think their mechanics are too good to change somebody's oil," Knight said.
New-car dealerships and full-service gas stations are giving the lubrication business away, Knight said.
Statistically, he might have a point.
Full-service gas stations are disappearing rapidly. Nationally, between 1972 and the end of 1986, the number of full service stations fell 48.2 percent, down to 117,000 from 226,000. Self-service stations that sell everything from gasoline to video cassettes -- but provide no mechanical services -- have sprung up in their place.
The demise of the full-service stations has created a vacuum that the fast-lube shops are filling, said Victor Rasheed, executive director of the Washington-based Service Station Dealers of America.
"The specialty shops are claiming some of the business that the full-service stations are giving up," Rasheed said. But he said that surviving full-service stations are thriving, too.
"The remaining stations have captured much of the business" surrendered in the service-station shakeout, Rasheed said. "Many of the remaining stations have upgraded their services by putting in computerized and other diagnostic equipment. They give the same kind of services found in new-car dealerships," Rasheed said.
But the trend toward the fast-lube shops is irreversible, Rasheed said. Those quick-serve businesses will take their place alongside the Midas Muffler and AAMCO Transmission shops that also offer quick, specific automotive services, he said. Developments are proving him correct.
Just up the road from the Fairfax Jiffy Lube on Lee Highway is the Auto Service Park. It consists of three separately owned businesses that, collectively, provide many of the same services found in one dealership or gas station.
People in need of a quick oil change can visit the "park's" Auto Lube center. Those in need of a tuneup can go next door to Precision Tune; and those in search of a muffler can go a few feet farther to Meineke Discount Muffler Inc.
Some auto service industry analysts believe that the boutique approach can undercut the still-growing Jiffy Lube empire, which eschews repair work and shuns other auto services that deviate from simple fluid changes. But Jiffy Lube Chairman Hindman said he has no intention of changing.
"We're taking care of the fluids and the filters, period. We don't want to get into time-consuming repairs and lose the convenience factor," Hindman said.
So far, convenience has served Jiffy Lube well. The company, which began trading publicly in July 1986 with 2 million shares outstanding, had net earnings of $1.2 million (33 cents a share) last year, a 101 percent increase above the $603,000 (18 cents) earned in 1985.
With that kind of performance, Hindman said he easily can sell Jiffy Lube franchises, each of which requires an intial capital investment of about $154,000. According to Jiffy Lube officials, that investment involves a $35,000 franchise license fee and various capital and cash requirements of $119,000.
Franchise purchasers must fund their own real estate acquisitions and site development. But loans for both functions are available from Jiffy Lube International, company officials said.
"You are not buying a building or a site when you buy a franchise. You're buying a merchandising area," said Judith L. Bungori, Jiffy Lube's manager of franchise sales.
Some individual franchise applicants, operating as consortiums or corporations, pool their resources to buy Jiffy Lube marketing rights for entire states or regions. That is the case with Maryland's Alary Management Corp., which is planning to double its current cluster of nine Jiffy Lube shops in the Washington area.
Alary officials declined to give specifics about their overall investment in Jiffy Lube. But they said they have no regrets.
"I wouldn't trade it for the world," said Eddie Adiyeh, a Jiffy Lube shop manager under Alary, and a management refugee from the computer industry.
"It's a good business," Adiyeh said. "You get help when you need it" from the franchisor and the local franchise holder. "But, mostly, they leave you alone and let you handle the shop as if it's your own. That's a good feeling," Adiyeh said.