Snap-On Has the Right Tools to Succeed

Snap-on has achieved significant market leadership (approximately 60% share) in the mobile distribution of tools for automotive repair in the United States. The key to its success is its franchise model, in which franchisees purchase vans and inventory from the company (often with financing from Snap-on’s captive finance subsidiary) to then resell tools to auto technician customers whom the franchisees call on every week. This network of franchisees reaches thousands of customers, resulting in in-person, highly consultative sales, which are notoriously sticky. In fact, management views the franchise network as mainly optimized and generally more capable of GDP-plus growth.