Maaco MSO leverages technology, training to beat industry profitability benchmarks

He describes the Dream Team’s roster as including Taso Bournousouzis, “a world-class operator” and former multi-unit franchisee who heads Stonewall’s East Coast operations and is a key member of the senior executive team; Mike Murphy, also a former top Maaco franchisee who oversees the Michigan shops as regional director; Mark Seifert, “a Maaco legend” and vice president and general manager of the Garden City, Michigan shop; and Chad Slabaugh, “a rising star in this business” who operates one of the largest Maaco’s in the country in Troy, Michigan.

Of his previous position at Maaco’s Charlotte, North Carolina headquarters, Doug recalls that “while my job was helping franchisees, I am certain that they taught me more than I ever taught them. I learned from some Maaco ‘living legends;’ Frank Furino, Steve Chertock, Ivan Montoya and Brian Greenley, just to name a few. But I really feel like I learned something from everyone.”

A standout lessen that took hold was, “Sometimes you learn what to do, while sometimes you learn what not to do.”

In December of 2016 Stonewall opened its first shop in Aberdeen, Maryland. “After a rough start, that center has become a consistent sales and profit generator. We opened three more in April 2017 and grew gradually before opening No. 10 in March of 2018,” Doug recounts.

“I believe one of our success keys is managed growth. That means two things: Choosing the right acquisition targets, and growing at a pace that your infrastructure can handle,” he says.

“Decades ago Maaco was known for overall paint jobs and ‘bumping’ only. Today, our centers perform full collision repairs in state-of-the-art shops with all the latest tools and technology. At the shop level, what sets us apart is our ability to perform the same high-quality repairs as our competitors – and do it both faster and less expensively, and do that while beating industry benchmarks for profitability,” Doug explains.

“Our sweet spot is the cosmetic collision,” he continues. “We excel in those repairs while other shops focus more on the big hits. And while the ARO (average repair order) on those looks nice, the smaller repairs is an underserviced market that due to our production processes can be very profitable for us, and convenient for the customer. In other shops those repairs go to the back of the line. With us those customers’, cycle times can expect to be dramatically shorter.”

Avoiding the pursuit of Direct Repair Program (DRP) affiliations, “Our bread and butter is retail and fleet. But maintaining a relationship with a high-volume fleet account is very similar to DRPs, it’s all about the numbers,” Doug points out. “Even though with this account we have been ranked No. 1 regionally and Top 2 or 3 nationally, we are always looking to improve our metrics.”

Investing in specialized equipment “has recently allowed us to impact ARO and cycle time,” he says. “We were able to lower our bumper replacement percentage all the way from 65 percent down to 25 percent. That actually impacts our bottom line just as much as the client. This has strengthened what was already a very positive relationship.”

Applying careful consideration to the hiring process is another technique that has proven to be beneficial to the business. “We have a healthy respect for what it takes to run a profitable shop,” he elaborates. “Therefore, our recruiting strategy focuses on experienced people with a track record of success running a collision center. It is not unusual for MSO groups to adopt the ‘business-is-business-and-management-is-management’ philosophy; that leads to the hiring of non-industry managers – and we haven’t seen many examples of that strategy working.”

Offering medical coverage and a retirement plan are complimented by an above-average salary and bonus schedule, “but I think the biggest plus we provide is opportunity and career path,” he notes. “We are looking for people who want to build something special, and top performers will have the opportunity to rise quickly within the organization.”

Several strategies are utilized to maintain positive relationships with the company’s suppliers: “The first one is simple – pay your bills on time,” Doug advises.

“We have a billing process that pays weekly. Even though our terms with most vendors is 30 days, we process invoices every week. Almost as importantly, we manage our return rates and consistently receive positive feedback from vendors,” he adds.

“Since we are part of Maaco we have a sizable advertising budget, but advertising alone can only get you so far. You can’t out-advertise a bad reputation,” says Doug, a factor that additionally drives the entire staff’s commitment to delivering the best in customer service. Extra steps are taken to encourage online reviews, and “as much as 40 percent of our business comes from repeat and referral.”

Franchising opportunities

Beginning in 1972 with founder Tony Martino’s first pilot location in Wilmington, Delaware, parent-firm Maaco has grown to include more than 500 independently owned and operated franchises. The chain combined with Meineke to form Driven Brands in 2008.

Maaco welcomes further expansion and invites potential franchisees to apply. “Maaco is continuing to grow throughout North America, with the opportunity to more than double the number of Maaco locations in the U.S. and Canada,” the company says.

“Not only do we offer opportunities for entrepreneurs who want to operate one or two shops, we provide market-wide territory options for investors. Our continually growing scope and scale build upon our resources as a strong, viable North American brand to make either ownership path a profitable one,” says a company representative. “And, with North American purchasing programs, enhanced standard operating procedures, dynamic national brand campaigns and the backing of Driven Brands, Maaco provides a model for investment success.”

Cited benefits include:

• Over 42 years of automotive paint and collision repair experience
• Outstanding earning potential
• World class, comprehensive training program
• Ongoing operating support and assistance
• Territory protection
• Unmatched buying power

Additional buildings and build-to-suit sites are also being sought. The body shop locations must be zoned for auto painting and collision repairs; long-term leases of about 15 years are preferred. Building and land purchases, multi-tenant buildings and existing body shop facilities will be considered as well.

Some of the site specifics are:

• Existing freestanding building
• Building size: Approximately 6,000-15,000 sq. ft.
• Zoning: Auto body and paint
• Parking: 35 cars (desired)
• Ceiling height: 14 ft. or greater
• Electrical: 3-phase, 280-amp service

“’Uh-Oh, Better Get Maaco’ is the iconic slogan Maaco has used for years to communicate our services with customers, but it’s proven to be a great selling point for potential franchisees, too,” says a Maaco representative. “Now is the time to take advantage of the opportunity to own your part of the nation’s leading provider of automotive paint and collision repair services.”