Q&A: CARSTAR President on Future of Driven Brands, Industry
Oct. 8, 2019—Driven Brands, which owns CARSTAR franchises, recently announced that it had acquired the franchise locations of ABRA Auto Body Repair of America.
Shortly thereafter, FenderBender was able to track down the new president of CARSTAR, Dean Fisher, in the Minneapolis area. The acquisition of ABRA’s 55 franchise locations increases Driven Brands’ size and scale, though the transaction excludes over 300 corporately owned ABRA facilities, including the glass business.
In a nearly 30-minute conversation with FenderBender, Fisher expressed excitement in the wake of the acquisition. Here are some highlights of the conversation.
HOW EXACTLY DID THIS ACQUISITION COME ABOUT?
FISHER: Driven Brands is always looking to add franchise locations to their vertical, especially in the automotive space. … When ABRA purchased Caliber, we [had] enough relationships with the other consolidators in the marketplace to understand franchising is not their forte—the franchising, they weren’t really working to build that out. [ABRA] grew to about 34 franchises in their organization and then sat there for a while. They then continued to build to 55 stores over time and Caliber elected to stop at that point.
Bottom line is, Caliber and Driven Brands coordinated a meeting and had a discussion around their franchise vertical.
THE ACQUIRED FRANCHISE LOCATIONS WILL KEEP THE ABRA NAME, RIGHT?
FISHER: Yes. They come in as a wholly-owned subsidiary within Driven Brands, under the ABRA name.
AND, AT SOME POINT THOSE FRANCHISE LOCATIONS WILL TRANSITION TO THE CARSTAR NAME?
FISHER: I can’t answer that.
WHAT HAS THE REACTION BEEN LIKE INTERNALLY?
FISHER: The reaction has been positive. We have learned with the Driven Brands family of business to embrace growth and change. The name is appropriate, right? We like to drive hard, we like to run fast, and we like to grow. And CARSTAR is that way; we’re getting ready to announce our 700th store this year, which means we’re adding at a pace of almost 100 stores a year right now.
And we compete against consolidators who are growing. So we actually embrace this. … [We are] the Ace and the True Value Hardware of the collision repair industry. We’re the guys that are going to take the independents that may be in jeopardy against Home Depot and the Lowes and we’re going to put them under a consolidated umbrella and provide protection for them.
Is it for everybody? Probably not. Are we a savior? No, we’re not. There’s some independents that will probably go out of business in this industry. … We do enough research, have enough analytics, so we know who’s in trouble, because of the technology of the automobile and the demands on cash, frankly, and the cost to invest in repairing the vehicle.
So where does that sit? Mergers and acquisitions.
CAN WE EXPECT MORE OF THESE TYPES OF ACQUISITIONS COMING FROM DRIVEN BRANDS?
FISHER: Well, we’re Driven Brands; you can always expect more from us. That’s the way I’d say it.