Multi-Shop Operators (MSO)

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MSO remains afloat after both natural and market disasters

Wednesday, October 4, 2017 - 06:00
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Collision shops choose to expand into multi-store operations for a variety of reasons – the need for more space, opportunities in new markets, insurance company encouragement. For Fradella’s Collision Centers, which serves the Lake Pontchartrain area near New Orleans, the leap to a second store was almost forced on them by circumstance.

Fradella’s was founded in 1982 by Michael and David Fradella and Al Waller in Chalmette, La., a small, island-like community near the Mississippi River where the famed Battle of New Orleans took place in 1815. The long-time friends were primarily doing custom work because they loved working on cars. “We did that for a couple of years, then we figured out we have to bring some structure to this and we have to feed our families,” says Waller, who serves as vice president and general manager at Fradella’s.

At a Glance:
Fradella's Collision Center
Chalmette, Louisiana
States served
No. of locations
No. of employees
$6.7 million
Martin Senour Paints (Sherwin Williams)
Paint supplier

Since then the business has grown to nearly $7 million in revenue, 37 employees and three locations – all in spite of the business nearly being washed away in Hurricane Katrina. The company’s family atmosphere, dedication to quality and teamwork, and embracing new technology and processes have helped Fradella’s weather both natural disasters and the ups and downs of the collision industry, Waller says.

Early technology adapters

The shop began using the 3M ARMS management software fairly early on, which Waller says not only revolutionized his own business, but the collision industry in general. “It really brought it out of the stone ages,” Waller says. “The whole concept was that you needed to job cost, and up until that point there had been very little computerization in our industry. The management system really held you accountable to job cost each job.”

In the mid-1990s, Fradella’s was also an early franchisee for CARSTAR, a relationship that lasted roughly five years until, as Waller puts it, he and his partners decided to move in a different direction as CARSTAR was undergoing some significant management changes. “But they really focused us on standardization of processes and profitability,” Waller says. “We started with them in their infancy. There were a lot of structural changes, and it just wasn’t a good fit for us anymore at that point.”

Opportunity in disaster

By 2000, the single Fradella’s location was doing roughly $2 million in business. While the co-owners were already considering opening a second location, the company’s transition to a multi-store operation was forced by the damage caused by Hurricane Katrina in 2005 and a massive oil spill that occurred just after the storm.

Waller describes Chalmette as “ground zero” for the hurricane, which caused massive amounts of damage, displaced the region’s entire 70,000 population, and left the community without power for ten months. “We were devastated,” Waller says. “And the first thing we did was figure out how to regroup.”

It was far from easy. All of the company’s employees and customers were scattered across the region, and had evacuated as far away as Texas.

That meant locating the entire team, and then finding a location with power and water where they could re-launch the body shop while Chalmette was rebuilt. “The second location kind of picked us,” Waller says. “We found a location in Metairie with utilities that we could use as a base, and we first leased that building in October of 2005.”

Part of the building was converted to a bunkhouse for employees to sleep (a trailer was parked in the lot as well), as everyone had lost their homes to flooding. The Metairie building also had other amenities like a shower and a barbeque pit. A number of employees commuted from out of state during the rebuilding process.

Hurricane Rita, which hit a few weeks after Katrina, caused further evacuations and damage. Despite the destruction, however, Waller says the experience bonded the team and helped fuel the growth that came later.

Waller describes the long process of getting back into the Chalmette location as “painful,” but the shop was up and running again by the spring of 2006. The Fradella’s team split its time between getting the Metairie location up and running and rebuilding in Chalmette. “We started with a body man and a painter there, and started moving part of our crew back from Metairie,” Waller says. “We had to bring cars back and forth because in Chalmette we have 18,000 square feet but in Metairie we just had 4,500 square feet. We’re still load leveling like that today.”

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