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Fix Auto CEO on the Company’s Aggressive Growth Plan

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Fix Auto opened its first location in 1991. Since then, the Fix Auto brand has expanded to 400 locations in the U.S., the U.K. and Canada. Erick Bickett, CEO of Fix Auto USA, acquired the license to use the brand name and now oversees Fix Auto operations in the U.S.
 

FenderBender’s Andrew Johnson sat down with Bickett to discuss what it’s like to be involved with an international collision repair organization, and some of the differences that exist between shops in the U.S. and shops on foreign soil.

Fix Auto is a brand name that continues to grow throughout the world. How did you end up getting involved with the organization?

Fix Auto’s first location opened in 1991 in Montreal, Quebec. Jean Delisle, founder of the Fix Auto brand, built up Quebec to be a very successful franchise network. Now, Delisle is the licensor of the entire organization, and licenses the trademark to different area developers.
That intrigued me, and that’s when I licensed the brand in the U.S. I am CEO and own the Fix Auto trademark in the U.S., which currently has 168 shop locations. Internationally, the Fix Auto brand has 52 shops in the U.K. and 180 in Canada. One of the reasons I’m connected to Fix Auto is because I love the global approach.

As Fix Auto operates in multiple countries, what structure does the business have in place to oversee all operations?

Other people oversee the operations in those countries. Think of it this way: Each country where Fix Auto operates has an area developer, like myself. Each developer is its own individual, completely separate corporation. Each Fix Auto corporation has separate shareholders, boards of directors and all the typical things you would see in a separate company.

If each region where Fix Auto exists is a stand-alone entity that shares a common brand name, what kind of relationship or interaction do those entities have with one another?

We call it an affiliate relationship. That basically means we collaborate together by sharing best practices, the brand and some of the creative work, like marketing materials. But we don’t have any financial or organized association agreements.

What kinds of collaboration have you had with your international counterparts of Fix Auto?

What’s neat about our collaboration is that each market is in a bit of a different place, but within the same business. That allows us to really look at each other and identify what’s working—and what’s not—in different areas of the world.

For example, the Canadian marketplace is behind us in some ways. The U.S. organization is highly leveraged in technology, so we share some of our technology with them.

But the Canadian marketplace is also ahead of us in some ways. I can learn from their experiences, see how their market has developed, how they interact with insurers, how they go to market to do consumer branding and the strategies they use to grow and establish additional locations.

What does Fix Auto do to avoid competition between the various area developers?

Our territories are very well defined. We’re very supportive of each other, and there really is no overlap of market share. Also, the founder is quite careful to make sure that whomever he works with is of high quality and integrity. We haven’t had any issues with another operator who doesn’t match our culture in the way that we approach things.

What are some of the key differences between Fix Auto USA operations compared to the international developers?

There’s a combination of franchised and nonfranchised Fix Auto locations. In some countries, Fix Auto is 100 percent franchised.

But we actually have a slightly different operating model in the U.S. Most of the shops in our network are what we call “network shops.” They’re not franchised and do not use the brand; they just leverage services that we offer. Out of 168 Fix Auto shops in the U.S., 130 of them do not use the brand, and choose to operate under their own name.

That being said, we are in the middle of a very aggressive expansion in the U.S. We refreshed our business plan, got new capital, and we’re aggressively expanding the franchise branded portion of our network. The brand is currently licensed in three states.

Why does Fix Auto USA see value in expanding the franchised portion of the network?

Basically, we’re taking one market at a time and going after our existing network shops by offering them the value of the franchise. Most of what we do with the franchises is market the services of the shops under one common brand.

Insurance companies have told us they prefer to have a common look and feel for their customers, and have a consistency that they can expect for every customer they send to us. Delivering that consistency requirement is what’s really driving this change, and our focus to integrate the look and feel of the operation.

Certainly, landing work from insurers is a huge aspect of the collision industry business. What differences exist between the U.S. and international shops in how they win over insurance companies?

The biggest difference is how the shop markets their services. In the U.S., giant insurance companies run their own networks of shops. They sign up one shop at a time to join the network because they have the necessary staff and infrastructure to support and manage their own preferred provider program.

That’s a very different approach from some of the other countries that I’ve been exposed to—where networks are predominant for an insurer’s choice of how business is done. Canada, for example, leverages the Fix Auto network as one of their primary methods of distributing work.

Having said that, the U.S. is transitioning now. The insurers that operate these networks find it very expensive to manage. Insurers are finding it to be much more efficient to work through us, since we’re already a network and have our own management infrastructure. In other words, we offer them a single point of contact for the business relationship, and they trust us with the process of managing performance and making sure customers are taken care of.

What are relationships like between shops and insurers in other countries?

The dynamics at play are similar to what we experience in the U.S. Insurers are very competitive in delivering a better value proposition than the other companies they compete with. Price is one of the things that insurers compete for. Insurance companies that are very competitive are trying to drive efficiency, and looking for ways to get things done better, faster and cheaper.

Those insurers are only going to do business with the organizations that are delivering on their requirements—and that’s causing us all to be more efficient and operate better.

What benefits do shops have access to as part of the Fix Auto network?

We do a ton of business improvement measurements. Our shops get daily performance feedback as to how they compare against their local market and against the other great operators in our network.

We have a client services department. Network shops have access to a full service call center, which is a critical component for repairers to be competitive today. We do claims management—where we process claims on behalf of our insurance customers—along with repair oversight, customer communication and customer satisfaction indexing. We have a fully operating IT department that provides technology to our shops.

We also help support marketing efforts for the shops. We have a creative department that builds marketing materials and messages. We help the shops market to and garner relationships with customers as well as work providers like insurance companies.

I understand that Fix Auto has strategic partnerships with businesses like 3M, DuPont and CARQUEST. What exactly does it mean to be strategic partners with those companies?

Basically, we have partnerships with companies that can benefit from the growth and strength of our network. It’s a shrinking marketplace for them, and they want to connect themselves to businesses that are growing. We leverage cooperative buying in many areas—parts, supplies, materials and equipment. Those companies help us with resources by providing discounts and special offers to strengthen the financial position of our shops.

The collision repair industry has been changing rapidly in the U.S. recently. What changes are coming down the pike for international repairers?

International shops are encountering many of the same issues we’re facing here—most prominently, declining frequency and overcapacity. There are too many shops and not enough work to go around, which causes fierce competition for the fewer cars that are available.

Technology in modern vehicles is increasing industry focus on technician training. What are international repairers experiencing on this front?

You can’t ignore the complexity of the automobile. The lack of training and certification that exists in our industry is staggering when you consider the complexity of these cars. Some of the technology in exotic cars is making its way into the mainstream automobiles, which absolutely requires technicians to be better trained. I think we’re going to see manufacturers be forced to offer training, certify special shops, and create restrictions on who can fix their cars because they don’t want to create a liability for their customers.

The poor economy has commonly been blamed by U.S. shop owners for slow business. How true is that elsewhere?

We have a global economic crisis right now. The other countries, however, might be in a different position because of their competitiveness and their ability to win business.

For example, in Quebec, even though they’ve had a similar economic impact as the U.S., their sales have been a little bit better than flat. In contrast, sales in the U.S. have actually declined.

Fix Auto has become known for its quality, efficiency and environmental friendliness. What does the company do to ensure those standards are upheld?

Most shops in our network are market leaders. We have some very large multiple shop operators in our network. For example, about eight of our groups pull in annual sales of at least $30 million, if not more.

When a shop is interested in joining the network, we do a heavy amount of due diligence. We look for our network shops to be well-equipped, concerned about customer care, and to believe that insurance companies are their customers as much as the consumers are. It’s also important that they’re progressive, have good capital structure and are economically sound.

We check with the shop’s suppliers to make sure it’s current on bills. We call customers and ask them about the experience they had when their car was fixed there. We talk to insurance companies in the area to make sure the shop has a good reputation.

Lastly, the shop owner needs to be fresh and not tired of the business. We want people who are aggressive and who help the business. It’s really important to us that we get the best of the best when it comes to adding new shops to the network.

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