The MSO Project - December 2018 by EndeavorBusinessMedia-VehicleRepairGroup

THE IMPACT OF

AVOID A DEAD-END

CONTROL YOUR INTERNAL

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CARSTAR’S ZONE RESTRUCTURING

REAL ESTATE INVESTMENT

S T R AT E G I E S A N D I N S P I R AT I O N F O R M S O S U C C E S S

ACQUISITION NARRATIVE

DECEMBER 2018

INSIDE ONE OF THE BIGGEST ACQUISITIONS OF THE YEAR AND ABRA’S PLANS TO USE CALIFORNIA AS A LAUNCHING POINT FOR NATIONWIDE EXPANSION PAGE 10

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WHO’S BUYING

CA S E STU DY

6 | Acquisitions

17 | Making Moves

T R E N D S + A N A LY S I S

8 | Easy Growth

CARSTAR implemented a new operational structure to allow for more controlled growth in the future.

DAVID CORTESE, THINKSTOCK

F E AT U R E

10 | Behind the Acquisition

Inside the Cooks Collision-ABRA deal, the industry’s largest acquisition of 2018

After a move to a new location eventually fell through, South of the Square Collision Center had to abandon ship and find a new location.

BUSINESS BUILDING

22 | Fully Arrived

Justin Fisher’s quick ascent to becoming one of the industry’s top operators

25 | Straight Talk

How to get your team onboard with a shop sale

29 | Q&A: Zack Taylor

The rapid growth of John Harris Body Shops

DECEMBER 2018 | THE MSO PROJECT

WHO’S BUYING

ACQUISITIONS AUGUST

EUSTIS BODY SHOP OPENS SIXTH NEB. LOCATION Eustis Body Shop owner Doug Keller and assistant manager Ryan Clark announced their sixth Nebraska location is now open, reported the Lincoln Journal Star. Eustis Body Shop began as a one-shop enterprise in 1979.

CALIBER COLLISION OPENS 600TH LOCATION Caliber Collision opened its 600th location in Virginia Beach, Va., recently. Caliber’s 600 centers are located across 19 states and the District of Columbia.

FIX AUTO ADDS CALIF. MSO Fix Auto USA announced an additional Northern California expansion as F. Lofrano and Son joins the network with three San Francisco Bay Area locations.

SERVICE KING OPENS 40TH DALLAS REPAIR CENTER Service King Collision Repair Centers announced the company has officially opened its 40th repair center in the Dallas-Forth Worth (DFW) metroplex. The more than 22,000-squarefoot facility is located in Fort Worth.

1COLLISION ENTERS MASS., TENN. MARKETS The 1Collision Network has added its first East Coast location, Colonial Collision in Worcester, Mass., which is owned by Joe O’Connell. 1Collision also entered the Nashville market with Plan B Auto Body, owned by Steve Fishe. In New Lenox, Ill., Tom Anderson, 6

who recently purchased Lincolnway Auto Body, will also re-brand with the 1Collision mark. Matthew Goebel, owner at Phil’s Auto Body, became the ninth repair center to affiliate in Minnesota. SEPTEMBER

CALIBER COLLISION ACQUIRES TRAVELERS BODY & FENDER WORKS Caliber Collision has acquired Travelers Body & Fender Works. FOCUS represented Travelers Body & Fender Works. Travelers Body & Fender Works was founded more than 70 years ago and operated one of the largest facilities in Fresno, Calif. “We’re going to miss it, but the technology that’s ahead of all of us is going to become very complex,” Jim Minnis of Travelers said. “At my age, 76 years old, I feel I should let some younger people take advantage of that.”

COLLISION SAFETY CONSULTANTS OPENS 18TH LOCATION Billy Walkowiak, founder and CEO of Collision Safety Consultants, has announced the opening of the company’s 18th location.

CARSTAR OPENS LOCATIONS IN MO. CARSTAR announced the opening of CARSTAR Bridgeton in Bridgeton, Mo., as well as CARSTAR Wentzville in Wentzville, Mo. Jon Parmentier, owner of both CARSTAR Bridgeton and CARSTAR Wentzville, is a third-generation repair center owner. OCTOBE R

JOE HUDSON’S COLLISION CENTER OPENS 76TH LOCATION Joe Hudson’s Collision Center

THE MSO PROJECT | DECEMBER 2018

recently opened its 15th location in Texas, bringing its number of total locations to 76. JHCC acquired Davis-Green Paint and Body. Davis-Green Paint and Body has repaired vehicles in Tyler, Texas, since 1952, when William O. Davis Sr. and his brotherin-law, Doug Green, returned from the Korean War.

SIGNATURE COLLISION CENTERS ANNOUNCE 25TH LOCATION Signature Collision Centers LLC recently announced the addition of two new shops in North Carolina. The collision repair company recently opened a location in Asheville, and, as of press time, had planned to soon open a location in Charlotte, NC.

ABRA COMPLETES ACQUISITION OF COOKS COLLISION ABRA Auto Body Repair of America has finalized its acquisition of California MSO Cooks Collision. ABRA’s purchase of Cook’s 38 locations was officially completed on Oct. 26. The acquisition of Cooks is ABRA’s largest transaction in the company’s 34-year history. And, the Cooks locations will be ABRA’s first stores in the state of California. ABRA now has more than 390 locations in 28 states. The new ABRA locations will be known as Cooks Collision, an ABRA company for the foreseeable future. Cooks has 800 employees, and Kessler said ABRA would ideally like to retain each of them in the wake of the acquisition. Cooks Collision had been family owned for nearly four decades.

Growth, Change and Adaptation As the industry shifts, we shift along with it

In all, 2018 wasn’t as dra-

matic a year for acquisitions and shift in the collision repair industry as recent years, but consolidation continues to chug along. In this issue, we highlight the year’s largest sale—the ABRA acquisition of Cooks Collision—and look at what it means to sell a longstanding family operation. Nearly every former owner of an acquired business begins his or her explanation with some variation of, “The time was right.” And in all cases, that rings true for them and how it pertains to their longterm goals. That doesn’t mean it’s the right time for everyone, or that opportunity is drying up. As the landscape changes, business owners must shift with it. Each story in this issue of The MSO Project highlights how others are doing just that, and how many are positioning themselves to make 2019 their best year yet.

Bryce Evans, Editorial Director

AUTO DATA LABELS

TRENDS+ANALYSIS

The Effects of CARSTAR’s New Operational Structure A RESTRUCTURING HAS ALLOWED CARSTAR TO MAINTAIN GROWTH BY MELISSA STEINKEN

THE MSO PROJECT | DECEMBER 2018

What was the growth like before this new structure? Did it elevate to a point where it just wasn’t working and they needed a new structure?

The growth of the CARSTAR network dictated the zones to some degree. The EDGE Performance Platform is expanding and there are complex parts to it. The complexity of the industry is also dictating that. There are multiple insurers with multiple programs and more and more OEMs are providing repair standards for their vehicles. As they enter the market and dictate the repair status, we predict to some degree

THINKSTOCK, MARK HARTMAN

CARSTAR has made a strategic switch to a zone structure for its operations and sales throughout the U.S. and Canada. The change stemmed from a need to streamline processes and keep up with an increased onboarding of stores. After devolving from an old structure with regional directors, FenderBender sat down with Dean Fisher, COO of CARSTAR North America, to discuss the impacts of the change on marketing and shop autonomy. The zone structure splits the U.S. into three zones—including west, central and eastern zones. The zones are designed to provide more focused service on the local stores and the quickly expanding network. The previous structure included multiple area directors across the country. The whole process took about seven months to create, Fisher says. The new zone structure will not only aid growth, but also give shop owners more access to the management staff, thus delivering information and support more quickly to stores and providing customized resources.

a cohesiveness and making sure we don’t create silos in our system. Our idea now is to have major connection between four major pillars in our company including operations, marketing, insurance and development. What autonomy will the shops have within this structure?

If you think about it, that’s our model: a franchisee conversion model. We want the owners to take pride in ownership and the company interface. These shop owners enjoy the entrepreneurship that comes with it so we just put them under an umbrella and extrapolate the best opportunity out of that. We take the best of what they do and put it under a model that makes them unstoppable. How will the marketing differentiate between the zones? DEAN FISHER CHIEF OPERATIONS OFFICER CARSTAR NORTH AMERICA

they’re going to start dictating the first notice of loss to the customers. In light of this, we’re all about educating the customer and training the stores to be more efficient, and competitive. Right now, we’re growing at a clip of about 8–10 stores per month, and that is actually accelerating. You can only manage a certain number of people until you need to add that next layer of management. We believe the structure will allow us to be quicker and more nimble to address growth in the system. How did you choose three zones?

We looked at where our stores are primarily located and where we are planning to grow. We were founded in the Midwest and have seen strong growth in California and across the eastern seaboard. We believe we could have up to six zones. We didn’t need to make a central split anywhere. In Canada, it was easier because we just created the zones by provinces.

What was the old structure like compared to the new structure?

In the old structure, there was a vice president of operations with a national director underneath them that works directly with a group of area directors. The area directors had a much higher store count than they do now. Under the new structure we have a lead operations person, a national director and a head of training. Then it moves down to the three zone directors and area managers. We have reduced the number of stores an area manager oversees by 6–10 stores, which makes it more effective for our operations systems to be deployed and allow for greater opportunity. This way we can implement our three Cs: coach, consult and counsel. So, the area manager is the one visiting the stores?

Yes, the area manager visits the stores. The zone directors are actually creating

We have a general marketing practice in which we develop radio for the shop and television programs with the same message and look. We also form a business group within the area to create synergy in the demographic market area. Any time we have four stores in a demographic market area, we link them together in a business group. Our largest groups meet on a monthly basis. Seattle, Denver, St. Louis and Chicago all have over 14 stores in a group and some have around 25. They are independent owners but they’re able to take in aggregated marketing dollars together to get more opportunities. Overall, the revamped zone structure allows CARSTAR to better serve its franchise partners with more focused resources and support to drive their local businesses. Will there come a time where you need to re-evaluate the structure of the zones?

We’re already looking at that. When we add more stores, we will regionalize our zones. Right now, we have an east, central and west zone. As we continue to grow, for example, we may need to add a Southeast zone. We’re growing so quickly, I would expect that to occur at some time in the new future—two years or so. DECEMBER 2018 | THE MSO PROJECT

TRENDS+ANALYSIS

INSIDE

THE MSO ACQUISITIO OF THE YEAR

THE MSO PROJECT | DECEMBER 2018

ON LE A D E RS O F BOTH ABRA AND COOKS COLLISION EXPLAIN W H AT F A C T O R S LE D U P TO TH E C O M PA N I E S â&#x20AC;&#x2122; R E C E N T C O N S O L I D AT I O N D E A L B Y K E L LY B E AT O N P H O T O G R A P H Y B Y D AV I D C O R T E S E

DECEMBER 2018 | THE MSO PROJECT

TRENDS+ANALYSIS

R ick Wood’s voice wavered, if only slightly. By the sound of it, the longtime business owner had long ago come to grips with the decision. Still, he knew things would never be the same for him professionally. And that’s never a pleasant feeling. “It definitely is emotional; I would be lying if I didn’t say that it was an emotional decision in many ways,” says Wood, a longtime co-owner of California MSO Cooks Collision. “It was difficult; we had a long history with a lot of employees. But, unfortunately, the world changes, and the economics of the world change.” What Wood is alluding to is the fact that he and his brother, Don, sold Cooks Collision’s assets to consolidator ABRA Auto Body & Glass in a move that became official Oct. 26. When ABRA purchased the 38-location California MSO, it was viewed by many as the biggest deal of the year for consolidators. The acquisition left ABRA with 396 locations spread throughout 28 states. And, it left the Wood brothers with a fairly difficult conversation to share with their employees back in late September, when they first informed Cooks Collision’s roughly 800-member workforce of the imminent transaction. For years, members of Cooks Collision had pridefully referred to the MSO as the largest family-owned collision repair company in the U.S. “The dynamics of the world of collision repair have changed,” Rick Wood notes. “And so, we felt that it was the right time.” Here’s an inside look into the factors that brought ABRA and Cooks Collision together, in an acquisition that gained the attention of all corners of the collision repair industry.

THE MSO PROJECT | DECEMBER 2018

TH E C O N S O LI DATO R ’ S P E R S P E C TI V E When ABRA finalized its acquisition of Cooks Collision, the move was hailed as the largest business transaction in the company’s 34year history. On the day the acquisition was finalized, ABRA chief operating officer Jim Kessler sounded both content and confident. “For us, it’s really the first step in us becoming a national player,” he says. “We actually want to spend the next two years [assessing]: How do we fill out California? “Then we want to make our way to Texas and Florida, and really fill out a national presence so, when the insurance carriers are looking for someone that has national coverage, we’ll be one of those players. “Even with Caliber, Boyd and Service King having the same type of strategy … we’re not in a speed contest—for us, it’s making sure that when we do an acquisition we’re actually finding partners that fit.” When ABRA first sought to become a national brand, the consolidator looked at California as the next logical stop, considering the business already had locations in west coast states Washington

and Oregon. And, when ABRA considered MSOs to target, Cooks quickly leapt to the fore. Why, exactly? Because so many employees had remained loyal to Cooks over the years. “Cooks,” Kessler notes, had “been around since 1979. And, once we met with the Wood family, their culture of how they run their company fit almost identically to ABRA’s. “It just made it a natural fit for us.” Below, Kessler breaks down the two biggest pieces to ABRA’s acquisition strategy.

tendency toward solid employee retention. When Kessler analyzed Cooks’ workforce, he noticed several fathers working alongside their sons on the shop floor. “Rick and Don Wood, they definitely promoted from within,” Kessler notes. “We see a lot of general managers at their locations who might’ve started as a detailer washing a car, and now they’re general managers and have been with the company for a long time. “When you just look at the tenure of their employees, and their career path of going from an estimator to a production manager, to a general manager, it was really impressive to us.”

Seek Similar Philosophies. As ABRA has grown in recent years, Kessler has noticed one uncomfortable truth: On rare occasions, acquisitions haven’t worked smoothly because the two companies’ ideals don’t align. And, when that’s the case, employees of the acquired business tend to head for the exits before long. In that respect, Cooks appealed to ABRA because of the MSO’s

Seek Minimal Technological Transitions. At most ABRA locations, the business management platform of choice is CCC’s. For years, Cooks Collision had utilized Nexius as its main technology vendor. However, ABRA had made an acquisition of Nexius user Church Brothers Collision Repair in Indiana earlier in 2018. As a result, by the time September rolled around, ABRA’s IT

Perpetual Pillars Cooks Collision made its name on being family owned, and it intends to maintain that reputation as ABRA locations.

DECEMBER 2018 | THE MSO PROJECT

TRENDS+ANALYSIS

department had already gotten Nexius data loaded into the company’s data warehouse. Thus, ABRA quickly became comfortable with Nexius software. “As we go about this venture,” Kessler says of acquiring Cooks, “we might make the decision to change to CCC, but we’ll be able to do it a lot more gradually. And we’ll be able to do it phased, instead of saying, ‘OK, all 38 centers all have to be trained and adopt a new business platform on Day 1,’ when they’re already worried about everything else that comes with just being part of a new company.” TH E M S O ’ S O UTLO O K For years, Cooks Collision’s owners had fielded offers from consolidators. Yet, the MSO’s operators largely focused on strengthening the company’s footprint in northern California. But, by 2018, the Wood brothers—both in their 50s—viewed consolidation as a more realistic option. And the brothers had always respected ABRA, considering they had long ago been in a 20 Group with the likes of Tim Adelmann, ABRA’s vice president of business development. So, when ABRA came calling this year, the Wood brothers eventually relented, selling a business they loved. Ultimately, Wood is at peace with the decision because he knows his former employees will be treated well by ABRA—a company he feels values its employees. “You really don’t have much of a company,” Wood says, “if you don’t put your time and effort in to the people that work for you.” ABRA officials have agreed to extend the benefits of Cooks employees through 2019. And, Wood feels confident that his former employees’ jobs are safe for the foreseeable future, especially considering the collision repair industry’s current demand for positions like body technicians. So, while the Wood brothers aren’t certain what lies ahead in their professional futures (they have non-compete agreements pertaining to the collision repair industry), Wood largely sounds at peace. The 58-year-old would offer the following suggestions to any MSO owners who are considering selling to consolidators: Reach Out to Others That Have Consolidated. The Wood brothers did plenty of preparation before negotiating with ABRA, Wood says. For instance, he spoke with several colleagues in the industry who had sold their MSOs to consolidators. Wood suggests reaching out to experienced colleagues in such situations “so that you’re prepared, both financially and emotionally, and psychologically. Because you will feel all of those emotions. “We’ve had some very good mentors over the years. And, we were both prepared on the personal side, from a financial position and an understanding of where we were—and where we wanted to go as a family.” Explain to Employees the Immediate Ramifications. In Wood’s experience, the worst part of an acquisition is the 14

THE MSO PROJECT | DECEMBER 2018

Smart Investments Rick Wood (left) and his brother, Don, didn’t take the decision of selling lightly.

rumors that can shroud such a business deal. That, he says, is something business leaders need to stay out in front of. “Unfortunately,” Wood says, “you have unscrupulous competitors that try to prey upon people’s insecurities. And so they immediately go after all the employees and tell them how awful it’s going to be, and how they’re going to lose their job.” But, these days, Wood knows that his former employees are secure in the belief that such rumors are often unfounded. After all, Wood notes, the overall U.S. unemployment rate is the lowest it’s been in nearly half a century. “Now, are [employees] uneasy because you’re now getting your paycheck from somebody else? Yes, I get that—there’s a human side to that,” Wood acknowledges. “In your new company, are you going to see the owners of the company on a regular basis, like you could with me? No; you can’t duplicate that in a bigger company.” That’s why Wood made sure to help employees understand the opportunities that are likely to exist for them with ABRA. Point Out New Opportunities that Exist. Indeed, while Cooks was closing on its major business deal with ABRA, Wood tried to explain the legitimate positives the transaction presented. After all, he says, a consolidator like ABRA can offer things that Cooks Collision simply couldn’t guarantee. “ABRA’s going to be able to provide much better opportunities for the people that have worked for us and been loyal to us for so many years,” Wood says. “They’ll have better opportunities to expand their careers; we could not grow at the pace of the big consolidators. “And, by [selling to] a company like ABRA—that has plans to expand in California—it puts everybody that works for us at the top of the opportunity list.” DECEMBER 2018 | THE MSO PROJECT

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CASE STUDY

Location Aggravation

WITHOUT THE PROPER RESEARCH, ANY LOCATION CAN BECOME THE WRONG FIT FOR YOUR BUSINESS

RICK STICKLAND, THINKSTOCK

BY KILE Y WELLENDORF

In February 2013, Rick Stickland, owner of South of the Square Collision Center in Medina, Ohio, was painting inside his new, second facility one day when he noticed two firefighters show up at the location. The shop wasn’t open yet and had just been recently purchased from an owner who decided to close the business. He put his paint equipment down, and made his way outside the facility to introduce himself to the firefighters and see if there was something with which he could help them. “No, we’re just checking to see if this building is on the take list,” Stickland was told. Stickland was bewildered. He didn’t even know what a “take list” was. But as he would soon find out, it wasn’t a good list on which to be. In fact, it meant that a large chunk of his shop’s brand new property was part of the city’s local road widening project. His business, set to open in March, would be greatly affected once the project began. The extent of that impact was unknown, until a state appraiser dealt him a final blow: The shop had to move.

RICK STICKLAND OWNER SOUTH OF THE SQUARE COLLISION CENTER

DECEMBER 2018 | THE MSO PROJECT

CASE STUDY

THE BACKSTORY

THE PROBLEM

Despite the bomb dropped by the firefighters, the business opened a month later, in March, as planned, but Stickland wasn’t sure exactly how the road would take away business as he had not heard about the project previously. The project, set to begin in the summer of 2018, was unknown at the time of purchase as he was not informed about it by the prior owner. An appraiser from the state of Ohio called to appraise the building and months later, he provided Stickland with answers: the loss of land would eliminate the ability to operate any business with public interaction. While it would be years before the project took place, it meant that the business would suffer greatly as the structure of the property would change drastically. According to Stickland, once construction started, the shop would lose the front parking lot, a majority of the drive-thru production bay space—making it impossible to pull a car around—as well as the driving entrance to the estimating area. “It made the building unusable for our business,” Stickland says. 18

THE MSO PROJECT | DECEMBER 2018

Find the Right Fit After difficulty finding the right location, South of the Square Collision Center has found one that pushes out more work.

THE SOLUTION

After the shop discovered how much property would be taken away, Stickland hired an attorney to help figure out the next steps. While the building would not be taken away, Stickland realized that he needed help figuring out how the business could survive the severe construction change, and what he should do from a business standpoint if it could not. “We were into [business at the second shop] for a very short time before we started going through legal battles,” Stickland says. After further counseling, it was decided that in order to properly serve customers, moving to a new location was essential. “We knew within a year and a half at our original location that we needed to find a building,” Stickland says. “We were going to be put out of business in that building.” After seeking out land in the area, the shop purchased a location around five miles away in August 2014. Through the grapevine, Stickland heard about a truck business that sold caps and hitches, but was not publically listed in the market.

“It cost us somewhere around the neighborhood of $350,000 to get the new building,” Stickland says. The shop continued to run, and Stickland was able to negotiate relocation expenses from the state for electrical upgrades and phone installation, leaving the unexpected cost of a new paint booth, building renovations and oil separator on the shoulders of the business. As customers continued to trickle into the shop, the renovation process began for the second shop’s brand new location. “The building had to be all reconfigured for our needs,” Stickland says. “We moved on Mother’s Day weekend [in 2015],” he adds. “We closed on a Friday and reopened at the new location on Monday. We planned it so we could move one location.” According to Stickland, the previous piece of property was then put up for sale and purchased by another company that repairs machinery and didn’t need public access. According to Stickland, the

RICK STICKLAND, THINKSTOCK

South of the Collision Square opened its first store in Medina, Ohio in 1999. Stickland was initially approached by Jim Gedeon, his previous boss, in the spring of 1998 about starting a business up together. In the past, Stickland worked in various roles at Gedeon’s business; initially, Stickland was given the title of bodyman painter, but his tasks diversified as he took on warranty work, working alongside dealerships, and writing estimates. When looking for a location together, Gedeon let Stickland know that he trusted him with running the business, and that his role would simply provide financial assistance for the business. Starting with an annual revenue of $451,000 the first year, the business’ revenue increased a few thousand dollars shy of $1 million the following year, Stickland says. The second shop was sure to share similar success, Stickland believed.

driving production.

Spanesi Americas, Inc. 123 Ambassador Dr. #107 Naperville, IL 60540

Phone: 224-SPANESI (224-772-6374)

www.spanesi.com DECEMBER 2018 | THE MSO PROJECT 19 www.facebook.com/spanesigroup

CASE STUDY

building was sold for a $500,000 loss. While the additional move was not ideal, Stickland says the new location was the best decision the company ever made.

THE AFTERMATH

According to Stickland, the new location has increased sales more than 30 percent over the year before the forced move. Although the previous spot was located at more of a “hot spot” in town, being five miles away has brought positive numbers into the business. “We moved from the main road to a 20

THE MSO PROJECT | DECEMBER 2018

side road and we’ve grown,” Stickland says. “We’ve almost doubled our sales in the two [full] years that we’ve been here.” Today, the operation has expanded to $4 million in annual revenue.

THE TAKEAWAY

When making large decisions, it’s important to include all resources, Stickland says. “Maybe go to the city beforehand if any projects come up,” Stickland says. Before making the move to a new location, it can be beneficial to check with

city workers to determine whether or not a project is nearing that specific location. In addition, members of the city council are knowledgeable regarding the specifics of what occurs within city construction projects. While the process was not ideal, being patient and confident is important if business is ever thrown through a loop. “The biggest thing is patience,” Stickland says. “You have to put yourself out there and be willing to be patient; what you’re willing to do [effects business].”

RICK STICKLAND, THINKSTOCK

Same Stance With relocation issues behind them, the team at South of the Square Collision Center has found a unified approach to growth.

DECEMBER 2018 | THE MSO PROJECT

BUSINESS BUILDING

Paving His Own Way ALTHOUGH HE TOOK OVER HIS FATHER’S SHOP, JUSTIN FISHER IS MAKING HIS OWN NAME IN THE INDUSTRY BY TESS COLLINS

THE MSO PROJECT | DECEMBER 2018

When you took over, was there any tension between you and your dad?

JUSTIN FISHER OWNER CARSTAR YORKVILLE

It was a seamless transition because he was ready—that makes a huge difference. With sons growing up in the business, there can be tension if the father isn’t ready to let go. My dad let me go in and do what I needed to do while he coached and mentored me through the process. Did he offer you any words of wisdom?

Not specifically but throughout the process, he would add his thoughts and let me evaluate. I think it was fun for him because he had an outside set of eyes evaluating his business and his process. It was educational for him, too, I think. You didn’t grow up in the industry. How do you think your unique background has

MARK HARTMAN, THINKSTOCK

You hear about it all the time in this industry. Children, following in their parents’ footsteps, take over shops when the time comes for them to retire. Although Justin Fisher did take over CARSTAR Yorkville from his father, Dean Fisher, this is not the typical industry story. Justin did not grow up wanting to work in the industry. He never pictured himself taking over the shop from his father. In fact, Justin says he never wanted to work for his father at all. After college, where he obtained a degree in business administration from Northern Illinois University, he worked as a project manager for a manufacturing company that designed and built cafeteria and food service environments. After he took the company national, Justin found himself interested in purchasing a business. Dean opened his Yorkville shop in 1994 and had 20 years of success before he decided that he wanted to pursue a new challenge—vice president of operations for CARSTAR corporate. So, when Dean mentioned to his son that he was interested in him taking over the shop, it was perfect timing. On January 1, 2014, Justin took over sole ownership of the company from his father. By planning ahead and using his knowledge from outside of the industry, Justin was able to keep the Yorkville shop a success and even opened a second location, CARSTAR Poplar in Ottawa, Ill., three months ago. In fact, Justin has been so successful he was named the 2018 Franchisee of the Year at CARSTAR’s annual conference. Justin shares what the transition was like with FenderBender and his thoughts on what has allowed him to remain successful.

pinpoint it. I don’t know if there’s a different peer respect level. I’ve done a lot of research on millennials and it seems like it was easy to make that transition for me. I’ll take techs coming out of schools and make the investment to train them and educate them to build them into our system rather than taking someone that’s more seasoned but might be set in someone else’s ways and stuck in an old mindset. I think you can teach an old dog new tricks, to a certain point, but I think there’s opportunity to be had with an eager and motivated millennial. What’s it been like with the second shop?

given you a different perspective?

I think a lot of people that are stuck in the industry don’t know how it is in other industries. Things are hard in other industries—it’s not just this one. I managed a couple of different telemarketing companies out of college and that’s a different world. There are definitely worse things out there. When you transitioned ownership, do you think it was difficult for the people that worked for him to look at you as their boss?

I would say most definitely, especially because I was the son of the owner. You know, it was “What does this kid who’s only 30 years old know? What’s he doing in this industry? What’s he doing buying a store? How does that make any sense?” There was a few months of that. But, my leadership style is a little unorthodox and they responded really

well to it and we were able to overcome some of those challenges very early on and establish a nice culture there. Can you describe your leadership style?

I’m a coach, a mentor—I don’t dictate things. I don’t micromanage. I put people to be in a position to either be successful or fail; you have to allow yourself to watch them do that. Twelve of my 15 employees are under the age of 36. My operations manager at the Yorkville location is in his early 30s and I trust him to make those decisions. It’s been fun to be able to watch that growth. I’m all about reflective supervision. Attitude reflects leadership and that’s how we manage. Being a millennial yourself, do you feel you’re better equipped to lead them?

Maybe that’s the case, I don’t know. I can’t

It’s definitely more difficult. I put a lot of work and effort into it. We have a high standard at my Yorkville location, so I needed to make sure it all came up to those standards at the new location. I was able to retain the staff there, which is awesome and they’re all great. The culture was there, which is a great building block. If I hadn’t already had that piece there, it would have made it much more difficult. We made building upgrades, equipment improvements, general education—everything we have in place at Yorkville—that’s all starting to take place at the new location. We’re trying to get caught up and do everything we’ve done over the last three years in Yorkville in six months, which is challenging, but manageable. You were named the 2018 CARSTAR Franchisee of the Year. What do you think has allowed you to be so successful?

It’s a tough question to answer because I’m humble in the fact that I haven’t been in this a long time and I don’t necessarily think I deserve that award. Corporate staff will always tell you it’s the KPI metrics and there are shops that are top performers. We’re one of the most innovative and progressive stores in the network and that success has been driven from the culture that we talked about. I think that has a lot to do with it. We’re team players. We help peers set examples and we have a consistent improvement mentality. DECEMBER 2018 | THE MSO PROJECT

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BUSINESS BUILDING

HAVE AN ANSWER .

When an outside interest visits the shop, rumors can often spread among staff members. In order to stay ahead of the rumors, prepare for questions that may hint toward a company change It’s common to get asked about selling, Mitchell says. “I have been asked that question most of my career,” Mitchell says. “My position is and has always been I would look at anything that made financial sense for the company and my family; there is almost always a number that will motivate someone to sell.”

FIND A CONFIDANT.

How to Control the Narrative During a Company Buyout PREPARE YOUR EMPLOYEES FOR NEW OWNERS BY EFFECTIVELY COMMUNICATING

THINKSTOCK

BY KILE Y WELLENDORF

When Car Guys Collision Repair’s CEO and COO, Dave Mitchell and his son, DJ, were approached by Joe Hudson’s Collision Center about purchasing the 13-shop business, both were concerned about two things: their position in the company after the takeover and how employees would be treated under new ownership. “We really wanted to make sure that our employees were as comfortable as possible during the transition,” Dave Mitchell, CEO says. Starting from the ground up, Car Guys Collision Repair was a father-son operation that grew into a 13-shop business. With a history of buying and selling up to 100 collision repair centers, Mitchell knows how new ownership can impact a shop. “My biggest concern was that employees were taken care of and had an opportunity to grow,” Mitchell says. After hitting it off with Joe Hudson’s Collision Center, combined with meetings at both companies, Car Guys began to take steps toward selling the business and ultimately preparing for change in the company. “I’m a little bit of an old-school guy,” Mitchell says. “I can tell when I talk to people how I feel about them, [and] we hit it off real well.” When it comes to informing staff about a new takeover, there are few key steps to take in order to stay in charge of the narrative.

If an owner is approached and he or she needs someone to talk with about the potential plan, it’s important to determine who can be trusted with confidential information. In order to avoid rumors or hearsay, select someone who you can fully trust in your business. For Mitchell, the most trustworthy person was his CFO and son, DJ, who also was involved in meeting with the new ownership. According to Mitchell, the entire process from Joe Hudson’s Collision Center’s first meeting until closing took around 8-9 months and was coupled with various in-person meetings with both Joe Hudson’s Collision Center and Car Guys Collision Repair.

FORMULATE A “MUST-KNOW-FIRST” LIST .

The moment the deal begins to take place, it’s important to figure out who should be informed right away. When selecting who should know first, pick out people who will instantly be impacted by the decision. Some of the folks in the must-know-first category for Mitchell’s business included the company’s leadership team, managers, and key insurance companies. “We were prepared; we signed the agreement I think at about 2 p.m. one afternoon DECEMBER 2018 | THE MSO PROJECT

BUSINESS BUILDING

and by 3 p.m., we were on the phone with our people,” Mitchell says. “We contacted insurance companies by phone and followed up by email.”

PROVIDE INFORMATION.

When a company is acquired, it’s important to let the employees know after all of the must-know-first contacts are informed. Be ready to answer any employees questions or concerns about the move. In order to keep everyone aware of the situation, Mitchell let employees know an hour after managers were told about new ownership. “At the end of the day, we emailed all employees telling them we had signed a deal with the intent of selling Car Guys Collision Repair,” Mitchell says. “We told them we intended to stay on, we gave them the name of the potential buyer and the timeline.

“We also told them we would keep them updated and asked if anyone had any questions or concerns to call my son, DJ.” It’s important to let employees know right away, Mitchell says. “If you have a relationship with your employees, I think it’s probably the right thing [to do] to let them know sooner than later.”

BE AVAILABLE.

After the change has sunk in, be available to talk with employees and customers about the future of the company. For some, new ownership could turn those away from a company they previously supported. For Mitchell, he emphasized that the new owner takes care of the employees and has positions for DJ and Mitchell in the new business. “We wanted to make sure that we could have some involvement in the operation to

ensure a smooth transition for employees, insurance partners, customers as well as the buyer,” Mitchell says. Today, Mitchell will serve as an advisor to the company and DJ will now work as a regional director. “We contacted our customers [about the change] as needed,” Mitchell says. Once everything is prepared, Mitchell made a point to get all of the head departments together for an in-person meeting about the move. “The next week [after the company announcement], we called all of our managers into a room and went over things,” Mitchell says. “[We said], ‘This will probably take place in a month or two; here’s everything we know, and we’ll tell you as things develop,’” Mitchell says. In addition, Mitchell went out of his way to let others outside of the shop know about the future of the business.

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Climbing to the Top

THE CEO OF A 12-STORE, $35.2-MILLION MSO SHARES HIS SUCCESS STORY

JOHN HARRIS BODY SHOPS, THINKSTOCK

BY TESS COLLINS

Zack Taylor was running a manufacturing plant when the facility was shut down due to the poor economy in 2009. After 13 years in the boat manufacturing industry, Taylor knew it was time to hang up the hat and look for a new career. With a technical background, combined with his past management experience, Taylor embarked on his hunt for a new opportunity that would allow him to utilize his business degree, as well as fulfill his technology curiosity. He was ready to relocate, and more importantly, he was ready to essentially start over. Local family friend John Harris of John Harris Body Shops, of South Carolina, caught wind of Taylor’s job search and suggested he attend a 20 Group meeting and look into the automotive industry. The two later spoke of Taylor’s positive experience with the group, as well as Harris’ vision of restructuring the already-established family business. “It sparked some interest in my part,” Taylor says. And that initial spark turned into a job offer from Harris. Since their initial visit, Taylor has morphed from a shop manager in 2010 to the company’s CEO today. With a $35.2 million revenue and plans to open its 12th store in December, Taylor says it’s fairly difficult to pinpoint what the future will look like. With a goal to be a hands-on CEO, Taylor discusses how starting fresh in the industry allowed him to curate a shared vision for leadership and entrepreneurship in the business.

ZACK TAYLOR CEO JOHN HARRIS BODY SHOPS

DECEMBER 2018 | THE MSO PROJECT

BUSINESS BUILDING

STARTING FROM SCRATCH

In August 2010, Taylor was hired as a shop manager and relocated from Philadelphia to work in the shop in Columbia, S.C., he says. Taylor learned that the transition from one industry was difficult. “Obviously stepping into it, I came with a whole different set of goggles,” Taylor says. In the beginning when Taylor arrived in the industry, he asked a lot of questions and spent a few months following around before figuring it out. For Taylor, some of the industry education included learning the different requirements of insurance companies, the ways CSI scores are recorded and captured, along with the variety of cycle times and how they’re measured. “It was tough,” Taylor says. “I think you have to love it, you have to want to learn it and understand it if you don’t grow up in it; I really had to push myself to capture the uniqueness of this industry.” The CEO Takeaway: Everybody comes from different backgrounds and it’s important to get employees up to speed.

you may even need to meet twice per day,” Taylor says. The CEO Takeaway: Start each day covering your basis in order to avoid miscommunication.

CLIMBING THE LADDER TO SUCCESS

After a year of working as a shop manager, Taylor was promoted to a general manager position where he was able to oversee multiple shops and a larger staff. “I have had to learn how to manage

“AS YOU CONTINUE TO GROW FROM FIVE ON UP, YOUR STRUCTURE HAS TO CHANGE.” ZACK TAYLOR, CEO JOHN HARRIS BODY SHOPS

BRINGING EXPERIENCE IN

Overall, he had to completely immerse himself in the industry, he says, and in the meantime, Taylor was able to use his previous knowledge with leading his new team. “As a shop manager, it’s day-to-day production and people management,” Taylor says. Taylor catered to all aspects of the business: working alongside staff members at the shop, handling customers, addressing customer issues, and tending to production. During his time, Taylor found that leading meetings in the morning with his team of 20 was beneficial for himself and the crew. “As a shop manager, if you can’t communicate, [then] you can’t lead,” Taylor says. “I think if it’s not standard it should be standard in the industry—I think shops should have meetings in the mornings. “I think for high-production shops, you absolutely have to meet in the morning and 30

THE MSO PROJECT | DECEMBER 2018

differently as we’ve grown,” Taylor says. The move came following both Taylor and the company’s vision to become more immersed in the market, he says. “I think John saw an opportunity for growth in our local market,” Taylor says. “Every market has performers at different levels, and we saw an opportunity to expand and capitalize on poor performers on the market or others that were not financially sound.” As a general manager, Taylor’s focus shifted more toward an operational role, where he learned how to lead shop managers as the company grew. “It’s no longer one location—you’ve got two and three locations,” Taylor says. “I was learning a different way of managing.”

As Taylor became more involved in the industry, he was able to continue his education in the industry though industry training, insurance conferences, and studying other companies growth, he says. “You kind of stand on the shoulders of giants [and see] what solution did they chose,” Taylor says. The CEO Takeaway: Take your vision and grow it by checking out other resources.

TAKING REINS AS CEO

Within the next few years, the shop continued to grow and Taylor was offered the role as chief executive officer of the company. “As you continue to grow from five on up, your structure has to change,” Taylor says. While Taylor has taken over as head of the company, he wants to be part of different elements of the company and make his presence known in the workplace, he says. Much like his old tactic, he continues to check in with shops in the morning. “I usually touch base with area managers each morning,” Taylor says. “I like to understand their challenges that they see on the shop floor.” Throughout the day, Taylor talks with those on the floor that he sees often: HR department, the CFO, and the COO, he says. He doesn’t stay at the office often, however, as he tries to make a point to visit the business’ locations. “I try to visit a couple of locations a month [and] a lot of the times it’s unannounced,” Taylor says. “I try not to have an agenda; I may take a shop manager out to lunch, I may take the estimating staff out to lunch, I may stroll the floor and ask questions. “You learn a lot about people’s lives and what’s going on with them at that time.” Taylor says it’s important for him to visit shops often while they’re still accessible. “If you take this business and add another 5–10 years, [visiting the shop’s] might not be realistic,” Taylor says. “I don’t operate in that space now.” The CEO Takeaway: Step out of your office and stand by your team.

DECEMBER 2018 | THE MSO PROJECT

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