Although 90 percent of CARSTAR’s current work is insurance related, the company plans to further focus on insurer growth since its acquisition by Driven Brands in late October.
Young, formerly the senior vice president of insurance for CARSTAR, was named to his new role during a corporate restructuring that promoted talent from within, but also parted ways with others, most notably CARSTAR CEO David Byers, who is no longer with the company.
“We’ve had a lot of positive changes in the last couple of weeks at CARSTAR. We’ve had about a month to assess the business, and we saw a lot of areas of opportunity. One of them was promoting talent in CARSTAR,” said Jose Costa, president, Paint and Collision Division, Driven Brands. A portfolio company of Roark Capital, Driven Brands created the new Paint and Collision division with the newly-acquied CARSTAR, along with MAACO and Drive N Style.
Along with Young taking on a new role, Dean Fisher has been named Chief Operating Officer and Melissa Miller is now Vice President of Operations.
“Think of the restructuring as taking chiefs and adding Indians to our playbook. It is the same cost structure, just shifted from the top to the bottom to add more resources on the ground so the franchise owners can see more profitability every day,” Costa said.
Driven Brands is restructuring under four verticals: paint and collision, repair and maintenance, distribution and quick lube. Driven Brands anticipates one to three acquisitions per month, with a goal of quadrupling sales in the next 36 months, Costa said.
Though they will gauge growth by looking to their EBITA (earnings before interest, taxes and amortization) — typically an investment term — Costa stressed that at Driven Brands, “we buy things to keep them and grow them, not sell them. Everything we buy we plan and hope and intend to hold for a long time.”
He deemed Roark Capital “conservative and patient,” not an investment company who is looking to do a “buy and flip.”
“Everything is on the table,” Costas said when asked if Driven Brands would look at acquiring a large MSO in the collision industry. “It is not something we are looking at very detailed right now because we are a franchise platform. But with Roark Capital behind us, everything is possible.”
The new partnership with Driven Brands, who in addition to MAACO and Drive N Style, also owns Meineke Car Care Centers and 1-800-Radiator, will bring synergies to CARSTAR for the brand and stores that will “catapult us forward in a positive direction,” Young said.
One main area of focus will be growing CARSTAR’s insurer business and partnerships, and that is where Young comes in.
“I spent 20 years on the insurance side with ALLSTATE and developed a lot of relationships on the claims management side. We provided hundreds of thousands of repairs to those who need our services. We are in a family now that is directly invested in the auto industry,” Young said. “CARSTAR is and historically has been insurance friendly. I was brought in to work on the brand and drive visibility into insurance companies to get our stores more work. There is no question that DRP is where it is at.”
While there are not more expected changes corporately; CARSTAR corporate offices and a training and research and development facility will remain in Kansas City, Mo., with other offices in Charlotte, NC, with no plans of relocation, Costa said. However, Driven Brands does aim to double the CARSTAR team, however these positions are field based, so they will be spread across the country.
“Our job is to provide insurance industry with highest quality and most capable stores. This group helps me do that. It is all about performance and all about the customer experience,” Young said.
Going forward, CARSTAR will focus on identifying franchisee “candidates who are ready for a second, third or fourth shop who understand the processes and can work with our insurance partners,” Costa said.
“The franchisees mean the world to me,” Young said. “They take a lot of risk every day and we are doing all we can to maximize their return going forward.”
