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Letter to the Editor

CARSTAR Building for the Future with Chairman Dick Cross III

While Cross is no stranger to teaching (having taught business management at his Alma matter, Harvard), he has become one of the foremost “go to” men when it comes time to directing a corporate transition. His talents have both contributed greatly to, and have directly led, “hands on” turn-around victories in such diverse industries as building products, auto parts, sporting goods, fashion and apparel, telephone equipment, paper products, and others. A self-admitted “car junkie” who says he “spent most of the time in elementary school drawing pictures of cars instead of listening to teachers, and partially paid for college as a Porsche mechanic,” he also is a staunch believer in the small business and free enterprise system, and sees CARSTAR as a protector of the independent collision repair shop in America.

Now at the helm of CARSTAR, Overland Park, Kan., for a little more than a year, he gracefully slides from theory into practical application while overseeing what he calls the transformation of the world’s largest chain of collision repair shops.

The CARSTAR business that began in 1989 has today evolved into a vibrant franchise framework of over 250 shops in 25 domestic states and a 100-shop master franchise in Canada. Cross’s plan is to propel the CARSTAR brand to 500 U.S. shops and beyond in the next two to three years by instituting a three-part strategic plan. By all indications, he is well on his way.

“2005 has been a year of rebuilding,” Cross said. “We have retooled much of the structure of the company and its philosophies to meet the evolving collision repair industry.”

The first strategy has been to dramatically upgrade the service levels of CARSTAR to its franchisees. “Only by providing better service will our franchisee network truly feel the successful impact of the being a franchisee,” he noted. “We have so many outstanding programs, it’s important that we properly integrate them in the system to reach optimum success.”

The company has been committed to this strategy and added nine new regional service manager positions over what has become a stellar year at CARSTAR.

Guy Maniscalo, a two-unit CARSTAR operator in Chicago and Chairman of the National Advisory Board, commented, “The collision repair industry has many challenges and we need stronger leadership than ever before. Dick Cross hasn’t been afraid to make the necessary changes to give more support to the franchisees. The communication and assistance is better than ever.”

The second strategy has been to accelerate the Corporate Managed Revenue with the insurance providers. Cross gave Vice President of Insurance Dan Young and his team accolades as he projects that by the end of 2005, CARSTAR will disperse over $40 million Corporate Managed Revenue to the CARSTAR system and over $60 million in 2006.

“It’s the key to the future,” noted Cross. “Insurance companies want and need consistency and coverage. We are providing them both and we’re starting to see the fruits of our labors.”

The last pillar of the strategy is to accelerate the pace of high quality additions to the CARSTAR “family.” “If we can take care of the first two strategies, the third will fall into place. The industry is in a shrinking stage, and only so many operators will succeed,” Cross hypothesized. “So if we make their jobs easier and lives better, we feel we can attract the cream of the industry.”

“There’s no better time to be involved with CARSTAR than today. Dick Cross and his team have a clear plan,” said Lloyd Taylor, a 15-year franchisee in Montana. We are moving fast into the future. It’s very exciting.”

The first three-quarters of 2005 were spent adapting the entire CARSTAR organization to its new strategies and guiding principles. Through revamping its service system and its advisory and marketing advisory boards, and through its regional strategic planning activities, relationships between CARSTAR corporate and its franchisees grew into the most productive partnership ever.

CARSTAR’s CMR program doubled, and should end the year at a $40-45 million run rate with $60-65 million in the sights for 2006.

Each quarter, through its “90-Day Look-Back” analysis, CARSTAR documents that every franchisee dollar spent on CARSTAR returns $3 in “hard dollar” value.

After adding 15 new franchisees through the first eight months of the year, CARSTAR’s new selling organization is on pace to end the year with 29 new shops.

Having designed and adapted to its new business model through 2005, CARSTAR will add roughly 100 franchisees in 2006 and is on schedule to reach its milestone of 500 during 2007. For the remainder of 2005, franchise development will focus on infilling its existing market footprints. For 2006, 2007 and beyond, CARSTAR will follow the leads of its insurance partners in opening new territories.

CARSTAR is the largest group of auto body repair shops in North America. CARSTAR shops currently are in 25 U.S states, and 110 Canadian locations. Since it was founded in 1989, CARSTAR has performed more than 1.5 million repairs with an average customer satisfaction rating of 95 percent or better. CARSTAR is headquartered in Overland Park, Kansas.

©2005 Collision Repair Industry INSIGHT
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