"We're focusing primarily on cities and towns in Orange County and the Palmdale area right now," D'Agostino said.  "Many of these areas have grown considerably, yet we have not established new stores there.  We have targeted some very specific locations, and putting NAPA stores in those places is a top priority."

D'Agostino said the independently owned NAPA Auto Parts stores already operating in Southern California are successful and that there is no reason to believe that the new locations will not be just as profitable. 

Genuine Parts Co. services about 5,800 locations throughout the United States, with stores also in Mexico and Canada. Approximately 900 of them are co-owned, and more than 5,000 are independently owned, he said.

"We can always open these new stores ourselves and run them, but we prefer going the independent route," D'Agostino said.

  "We find that our independent stores perform better than our company-owned stores because it's their money and their legacy.  There's a certain amount of pride in owning your own business, and it shows up in the sales numbers."

In some regions, NAPA sponsors a series of business opportunity meetings to educate potential store owners on the benefits of working with the retailers' cooperative, D'Agostino said.

"These meetings are for people who have expressed interest in one form or another," he said. "We lead them through a three-hour overview of the NAPA system and lay it all out for them.  It's an organized process of discovery.  Once they see what we're all about, they can determine if it's right for them."

D'Agostino said he has found that potential store owners fit a certain demographic.

"Although we're seeing more diverse backgrounds, the majority is men ages 40-55 with backgrounds as auto techs, shop owners, parts managers at car dealership owners, farm owners, and middle to senior managers working for companies doing industrial applications -- these are the types of people we're attracting," he said. 

"The one thing they all seem to have in common is that they're car enthusiasts.  A unifying theme is that almost every one of our owners is very interested in cars at some level."

To qualify as a store owner, an individual must have $75,000 to $150,000 ready to invest, depending on the market, D'Agostino said.

 
"It's not a franchise fee because our stores aren't franchises," he said.  "It's basically an equity investment to operate the business.  Our new owners simply take the money and transfer it into their business as equity so that they can use it to start their store."

Once a deal has been agreed to by both parties, it normally takes about 90 days to open a location, D'Agostino said.

"We asked our current owners why they own a NAPA store, and they gave us five reasons.  First, NAPA is an equity business.  Then, there's the income, the freedom and pride of ownership, the involvement in and positive impact on the community, and the backing and support of the NAPA brand."

NAPA supports its stores through a wide range of marketing and advertising programs, as well as with financing and training, D'Agostino said.

"We spend $70 million a year on advertising alone," he said. "And when you add in all of the marketing, promotions, and training we do on top of that, it's a phenomenal support package."

To find new locations, NAPA uses a "site model," a computer program with a wide range of demographic information that allows the company to determine each location's sales potential, including census numbers and data on household incomes and vehicle registrations, D'Agostino said.  It also helps NAPA track how many direct competitors exist in each region, he added.

NAPA is already looking at real estate and talking with potential owners in many of the locations they've targeted for new stores, D'Agostino said.

"We're specifically focusing on some prime locations that we're ready to go into right now," he said.  "We've targeted places like Anaheim, Irvine, and Palmdale.  Once a new owner opens a NAPA store, it often takes at least a year to become profitable, he said.

NAPA also encourages its owners to start other stores once they've learned the system, D'Agostino said.

"We have a lot of owners with multiple stores," he said.  "We encourage them to go down this path because even though it gets more complicated, they can make more money, and it's still a very manageable situation.  We have several owners in the U.S. right now with 10 to 15 stores, and one owns 40 stores, so it's definitely possible."