BY JORDAN ARSENEAULT
Bodyworx Professional caught up with CARSTAR president Michael Macaluso to discuss a number of industry-related topics, including market consolidation and the impact it will have on independent shop owners.
What options do independents have in a consolidated market?
Independents basically have three choices, they can sell, try to go in alone—which we feel is not the optimum move—or they can join a company like CARSTAR. Regardless of their choice, now is the time to start making those decisions. As franchise groups, CARSTAR included, start to consolidate the market, it becomes increasingly important for independents to join one of those entities in order to avoid being shut out of the market space.
What would you say to someone considering joining CARSTAR?
As part of being a franchise you have all the benefits of owning your own business, while also having an entire support system behind you. The key differences between CARSTAR and our competitors are our operational platform, our national insurance contracts and arrangements, our proprietary IT data analytics engine, and our training platform which helps in operating a better business.
We feel being able to fix a car properly in this day and age is certainly table space, but what we bring to the table is that we can help you fix that car in the right sustainable way so that you can be successful, while also meeting the needs of the national insurance partners. Can some of our competitors do the same? I don’t know. We have a footprint of about 50 people dedicated to our operation’s platform in a program that we’ve been growing for about 30 years and have had multi-success points. So we really see the differentiators of CARSTAR as performance driving growth to our operations platform.
How does CARSTAR stand out amongst other franchises?
We’ve really layered on our value preposition to independent collision centres that want to stay a thriving business. We provide our franchisees with a national presence and an operational platform. Our IT and analytics division can assist in helping stores run their businesses by the numbers in a more efficient way. We firmly believe performance drives growth and that scale will drive success, so we are pressuring that multi-prong approach of more stores and more sales through insurance and OE opportunity, to help owners run a better business.
What’s your goal moving forward in the Canadian market?
Canada’s been a great market for us. The Canadian marketplace is more consolidated versus the U.S. market, which is still consolidating. We are very excited about the Canadian market and currently sit at just north of 300 locations; a number we feel has the opportunity to be at around 500 stores. The goal across all CARSTAR is to hit 1,000 stores by 2021. The bulk of that growth will be in the U.S., but we do feel we can inch towards at least 400 locations by 2021 in Canada. Our business in Canada is slightly different than in the U.S. for three reasons, with the first being that more than half of our stores are owned by multi-store owners, who are continuing to acquire existing franchises or independents. We built many consolidators within the CARSTAR Canada group, which predominantly accelerated our growth. The second phase of it is, we’re much further down the path in terms of dealership engagement. We have dozens of locations that are owned by dealerships, and are also branded as CARSTAR’s—the third aspect is growth within open market.
There are at least 50 major communities across Canada that we do not have a store in. What it all comes down to is market share. Our Canadian market is just north of $2 billion dollars, and we feel we can have a much higher share of it then what we currently have.