Acquired Taste: Mango's Mission to Build a Network and Reshape the Industry
Jesse Jackson wants Mango Automotive to become the go-to national brand for auto repair.
Her plan is to develop a network of shops across the United States, starting in the Southwest, that are traditional mechanical repair shops geared toward electrification. Since opening her first location in Albuquerque, N.M., in December 2021, she and business partner Brian Walden added two new shops in 2022 before taking the final two quarters of 2022 to concentrate their forces on 2023.
"In six months, we did three acquisitions … Next year, will we build out our master franchising plan; we'll do 30 shop acquisitions in the Southwest,” she says, defining the geography as Texas, Colorado, Utah, Arizona, Southern California, and of course, New Mexico. “And then we're going to be rolling out franchises across the rest of the U.S.”
One of the criteria she outlines for which shops she identifies for acquisition surrounds succession. According to the 2022 Ratchet+Wrench Industry Survey, 27% of repair shop owners indicated that they had no plan for succession while 56% said they had no retirement plans at all. Jackson wants to be able to help owners who have no succession plan exit their businesses confidently knowing their employees and their families are taken care of.
"We really want to help owners who don't have a succession plan, who are ready to retire but are not sure how to retire,” she says.
Acquisition the Mango Way
One of the saddest things she sees in her own backyard are business closures that spring up when a ready-to-retire owner does not know how to sell the business and simply closes the doors for good.
“They're ready to retire. They’re not sure what the business's value is, they don't have a succession plan and they close the doors and walk away. We want to help those owners,” Jackson says. “I just want them to do what's right for them and their family as they move on to their next stage of life.”
She says acquisitions can be an emotional process, one which she and Walden handle with care.
"It’s quite an emotional process for a business owner to leave their baby, essentially something that they've built over the last 20,30 sometimes 40 years and move on to something else. So, we're accustomed to working with owners who are unfamiliar with how to retire and unfamiliar with selling their businesses. It's something most business owners only do once in their life and helping in that process by continuing to give them an income essentially after they retire,” Jackson says.
Maybe the most sensitive aspect of acquiring an auto repair shop is how the employees of the newly-absorbed shop will receive new ownership. Jackson says that Walden is magic when it comes to these situations, and it goes a long way toward helping newly acquired team members get comfortable.
“When we're in the due diligence period, between when we have a signed LOI, or letter of intent, and the time that the business actually transfers hands, we work with the owner to develop a plan that works for their employees and works for the owner. So usually a few weeks before closing, the owner will announce to the employees that he or she is retiring and often this comes not as a surprise because the owners are at retirement age,” says Jackson.
She and Walden then visit the shop to answer all employee questions and share what employment will be under the Mango Automotive banner, including new compensation plans, which Jackson says are typically an improvement from what they had.
“We've been lucky that generally, we're able to give our new employees a raise, and we're able to offer them health, vision, dental, and life insurance, which are some things that the employees don't always have the option to have,” Jackson says.
The partners instill excitement about Mango Automotive’s mission, sharing how each employee’s role will shape the future of auto care.
"As we see automotive repair shops transition from traditional repair into electric vehicles, some shops are going to be left behind, but not the shops that have become Mango shops. Those shops are going to continue to live on and transform and grow how they need to so they can be part of that current climate of automotive repair,” Jackson says.
How Shop Owners Can Model Mango
For shop owners looking to try their hand at acquisition, Jackson says setting some baseline standards goes a long way into ensuring the sustainability of the business model.
"They need to consider location, and then the thing they need to understand is what's their minimum acquisition criteria. So, for me, I said I'm looking for a shop that's doing a million in revenue and has seven or more bays,” Jackson says.
She says the right amount of revenue helps to ensure that you’re buying a profitable shop from the get-go, which should be top of mind. She says she chooses shops that are already profitable.
"I know any shop is limited in the amount of revenue that they can produce by the number of bays that they can that they have. So even if I have a shop that's slower in revenue, I know that I can increase the revenue to a certain level based on the number of bays in that shop,” Jackson says.
She believes shop owners who want to enter acquisition can do it if they plan well. Shop owners just need systems and processes in place for governing multiple locations, especially if they can’t be in each shop daily or even weekly.
“My general thought is if you have one shop, you can easily manage two shops, you can probably pretty sustainably manage three shops if they're all in the same general metro area. But once you grow beyond that number of shops, you really have to have solid operating procedures in place because you as the owner of four, five, six, seven shops are not going to be able to scale yourself,” Jackson says.
“So, you should really think about what kind of lifestyle you want. If you love touching base with customers and knowing all of your employees by name, you want to think about you know what number of shops feel sustainable at that level because your role as a shop owner changes as you acquire more and more shops.”
With its exotic and delicious-sounding name, Mango Automotive is a name to watch. Jackson, who comes from the tech world where she builds software for the electric vehicle repair and maintenance space, says this is just the beginning of her dream of going full circle—from development to dynasty.
“I thought the most fun way to do that would be to acquire automotive repair shops, convert them into having EV capabilities, and then on the backbone of that network of automotive repair shops to build that EV software,” Jackson says.
And if all goes according to plan, Mango Automotive will become a household name.