NC Trend: Crash Buddy
José Costa is president of the $1.2 billion paint and collision division of Driven Brands, which has bought 14 businesses since 2013, the same year he joined the company. Revenue now tops $2.1 billion with the paint and collision division — including Maaco, Carstar and Drive N Style, an auto refurbishing business — representing about half. About 170 people work at Driven Brands’ headquarters in downtown Charlotte. His comments were edited for brevity.
Moving to Driven Brands, did it matter that you didn’t have any experience in the auto industry?
All of our management team came from outside of the industry. A lot of our franchise owners gave us a hard time when we first joined. They thought we had no idea what we were doing, and that we didn’t understand the automotive industry. It has actually worked to everyone’s advantage: Franchisee profitability is up, our numbers of locations are growing and we’re innovating in many aspects of our business.
How is Driven Brands achieving that innovation?
Probably the innovation we are most proud of is a retail concept that places Maaco satellite shops inside of Pep Boys and other retailers. Historically, body shops are in industrial parks, outside of town. We wanted to … put satellite locations where consumers are shopping, where they spend more time. It’s a concierge service, usually in high-traffic retail areas. We make it very convenient: Usually within 15-20 minutes we’ll write you an estimate, we’ll get you a loaner with one of our car-rental partners and you’re back to your normal life. You come back in three to four days and your car is ready.
Talk about Carstar, one of Driven Brands’ largest and most recent acquisitions.
Carstar is mainly an insurance model, where, if you have an accident, the insurance company refers you to a Carstar. So it’s a bigger average ticket [than Maaco], which is mostly retail and fleet consumers who are looking for overall paint, or what we call light collision. For Maaco, it’s roughly $900; for Carstar, it’s about $2,500.
You appeared on CBS’ Undercover Boss. What did you take away from that experience?
It was probably one of the best experiences of my life. It was so rewarding to be able to drastically change someone’s life with the money we were able to provide those employees, and understanding the business from the ground up, not being able to show your true name, personality or title. It was very eye-opening. It was a fantastic experience.
Driven to succeed
Owned since last April by Roark Capital Group — the Atlanta-based private-equity firm whose portfolio includes Arby’s, Massage Envy and Hardee’s/Carl’s Jr. — Driven Brands has 2,300 locations in North America, including Meineke Car Care Centers, Maaco body shops and 1-800 Radiator. Driven Brands last year acquired Carstar, a Kansas-based chain with body shops in 31 states and Canada and annual sales of $700 million, and in March bought Louisiana-based Take 5 Oil Change.
Work: Costa has spent most of his career in marketing, including stints at Yum Brands and Burger King Corp., where he met Jonathan Fitzpatrick, Driven’s CEO.
Hometown: Caracas, Venezuela
Education: Master’s degree in marketing from Northwestern University, MBA from University of Chicago
Family: Wife and two children