Assessment of Valvoline Instant Oil Change Franchise

For this process of examining the operations of a franchise firm in pursuit of a clearer understanding of microeconomics, I am choosing Valvoline Instant Oil Change. It is interesting to me because I have direct experience with this company as a customer. Disappointed with the high prices yet fascinated with a service so passionately dedicated to customer convenience, I feel compelled to further understand the inner workings of this franchise built toward serving the upper-middle class.

In efforts to more clearly comprehend this franchise, positive statements that can be tested with research and ultimately accepted or rejected will provide useful grounds upon which I can assess the financial nuances of the company. Normative statements, on the other hand, carry a subjective implication not easily proven by studies, often with an implied value judgment. In the case of Valvoline, both positions must be considered. For example, the price of crude oil and petroleum on the world market will increase company operational costs. In addition, customers should enjoy visiting Valvoline more if there are various amenities provided while they wait such as hot dogs, a variety of magazines, and coffee machines.

The three fundamental questions of economics, what to produce, how to produce it, and who to produce it for, must all be answered in order to understand the market emphasis of Valvoline. In this case, the franchise produces a preventive vehicle maintenance service by constructing garage areas for completing the work in tandem with a convenient waiting area for the customer, typically upper-middle class Americans.

The three factors of production, land, labor, and capital, play a pivotal role in the operation of Valvoline. With sufficient capital of ($178,420- $1.99 million), land is purchased giving a location point for workers to perform labor for compensation (“2014 Franchise”, 2014).

Reference

2014 Franchise 500 Rankings. (n.d.). Entrepreneur. Retrieved from http://www.entrepreneur.com/franchises/rankings/franchise500-115608/2014,-2.html