In the South Sound the name Gilchrist is associated with cars. Kent Gilchrist is just one member of this dealership clan—his father runs the Gilchrist Buick dealership in Tacoma, and his brother runs the associated Gilchrist Chevrolet. However, Kent Gilchrist may be the most influential family member in the regional auto industry.
Gilchrist—a former dealer himself—runs Puget Sound Business Brokerage of Tacoma. From his Pacific Avenue offices, he arranges marriages between qualified investors and available dealership. The operative word here is “qualified.”
“You can have a whole lot of money,” Gilchrist observes. “You can have wonderful credit but, if you don’t have extensive experience in a high-end professional capacity, the factory won’t look at you twice.”
An automaker’s network of dealers is its lifeblood.
The situation is further complicated by the amounts of money at stake. Average annual sales for a dealership run from $20 million to $100 million.
Gilchrist has been brokering dealerships for about eight years now. He says it is a natural combination of interests.
“I had run a couple of dealerships myself,” he explains. “I had a Buick dealership in Auburn and GMC and Mack Truck franchises in Fife.”
After almost a decade as a dealer, Gilchrist felt it was time to move on. He had been developing a commercial real estate brokerage as a sideline and decided to turn his attention to that industry.
“I was still a member of all the trade organizations,” Gilchrist notes, “and I’ve got a lot of friends in the industry—I think I know pretty much every dealer in the region, at least casually.”
A retiring dealer looking to sell got Gilchrist started. As a licensed broker he was legally qualified to arrange the sale. “Since then,” he says, “it’s been mostly word of mouth.”
Gilchrist estimates he has brokered about a dozen deals since then, averaging one or two per year. His commissions are negotiated on a case-by-case basis depending on their complexity.
“You are selling two separate things,” observes Gilchrist. “The dealership doesn’t belong to the dealer—it’s a franchise. You have to sell the prospective new dealer to the factory, then you have to negotiate a deal between the old franchisee and the new franchisee over the location, used stock, parts stock, furniture and equipment.”
“I’ve never seen a deal close in less than six months,” Gilchrist adds. “Most run about eight months to a year.”
By Christopher Hord, Business Examiner editor