Setting an example
Meanwhile, in another nod to the increasing integration of Carstar’s North American markets, the franchisor recently recognized both Canadian and American franchisees for excellence together, for the first time, at its annual conference in Charlotte, N.C. (where Driven Brands itself is based).
Within Canada, the franchisee of the year award went to Jeff Labanovich, a multi-unit owner in Oshawa, Ont., who has enjoyed double-digit growth over the past several years and serves as chair of the Carstar Canada advisory board. He was also lauded for being engaged in his local community.
Canada’s rookie of the year award went to Ron and Mandy Alberts, whose franchise in St. Stephens, N.B., has been ranked a best-in-class location and proven well-integrated in its community. They started in early 2016 in a temporary 3,000-square-foot facility before moving that spring to a newly renovated 10,000-square foot building.
Finally, the next generation award, which honours second- or third-generation owners who excel at leading their family business, went to Joe and Paul Saputo. Having successfully transitioned their shop in Ancaster, Ont.—which was one of Carstar’s first franchises anywhere in Canada—from their parents’ management, they have increased sales by 25 per cent and opened a second location nearby.
“Our recipients not only set a great example for other shops to follow, but they also spread their knowledge and experience throughout the entire network, to help each of our shops grow,”
Macaluso’s five-year plan is to nearly double the number of Carstar locations across North America, to 1,000, and reach $3 billion in sales.
“It’s an aggressive goal,” he admits. “To reach it, we’ll need to both enter new territories and provide additional resources to our existing franchisees to help them go multi-unit. There are 5,000 body shops in Canada alone. The market doesn’t need more, but it could use more national groups like ourselves. So, we want those shops to join us. In consolidating the market, I see more opportunities than challenges.”
Mimicking similar business models for groups of formerly independent pharmacies and hardware stores, Macaluso is focusing on conversion opportunities.
“Our new franchisees are predominantly body shop owners who join us,” he explains. “Franchisees with no experience are also okay, as we provide training, but the vast majority of our locations are conversions and we continue to buy body shops with our franchisees.”
Multi-unit franchisees, such as the aforementioned award winners based in Oshawa and Ancaster, often
expand by buying existing body shops and converting them, rather than building out a new location as in
St. Stephens (which was formerly a bowling alley).
“For owners of independent body shops, we can help them run their store more effectively, grow their sales, establish a bigger brand presence in their market and maximize their profit margins,” says Macaluso.
“We can also help with a transition to the next-generation owner.”
In addition to the obvious financial requirements in terms of liquidity, he says the key to franchisee success is sharing the system’s core values and vision.
“Our mantra is, ‘stay hungry, stay humble,’” says Macaluso. “There needs to be a strong desire to improve the business.”