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ownership of what that’s worth and what all these stores are worth and you’ll all own your share of the stock in a group called GCR?’”

This simplified everything to the point that they wound up opening outlets all over the state — eventually growing to 93 stores.

Granted, their timing was perfect as the Texas economy was booming, but their structure allowed them to grow quickly — especially for those days.

“We hired good people like Ken Weaver, for example,” says Gauntt. “When you get good people like that, it just makes your job easier. We could acquire quality store managers.

“You give them 25% ownership and if they see it growing every year, they perform well. They considered it their store — even though they had GCR as a majority owner — and we required them to run it like a GCR store.”

Weaver remembers that the company instituted standards of excellence that “were simple, robust and understood by everyone.”

These included 10% operating profit to sales; at least $2 of gross profit for every dollar of payroll; 90 days of inventory; and less than 10% past due accounts receivable on commercial accounts.

“Morale was outstanding” continues Gauntt. “We made sure that we had a lot of fun in our business. We had contests every year that if you ran your store and made your budget and GCR made the total budget, we’d take a trip.

“We went to Hawaii three or four times for an annual meeting — taking wives and kids. We’d been all over — just about every year for the 17 years that I was there.”

Perry Rose, Harold Crawford and Balie Griffith were all very active up until about 1983, when they promoted Cliff Windham, who was one of their market managers, to general manager.

They made Windham and Gauntt vice presidents and told them to run GCR and they would only answer to the board once a month. Crawford had a health scare in 1985 and started talking about selling his stock to get his estate squared away. Griffith figured out how much his stock was worth, but Crawford decided not to sell.

“We made him such a good offer that Perry Rose said, ‘If you make me that same offer, I’ll sell my stock,’” says Gaunt. It was at this time that John Nevin, CEO of Firestone, and Jay Rosensen, Firestone’s chief operating officer, caught wind of the fact that Rose was planning to sell his stock, so they contacted GCR and asked to buy all of it.

‘Morale was outstanding. We made sure we had a lot of fun in our business.’

GCR was doing $97 million in annual revenue in 1987 in 93 total stores — 80 retail locations and 13 commercial locations. Although the exact details of the transaction have been lost with the passage of time, I’m guessing the company sold for between 1x and 1.5x revenues. The transaction was solely for the operating company, as real estate was not included in the sale. When asked why more companies don’t operate like GCR, Gauntt says “I cannot answer that. It confounds me. I don’t know why in the world they don’t because it’s a system that in any business that’s ever tried it, it’s worked.You let them have a piece of the action, they will do a better job. And that was the secret to our success, I promise you. We considered everybody a partner and treated them that way and we got good, quality people.”

Michael McGregor is a partner at Focus Investment Banking LLC (focusbankers.com/ automotive/tire-and-service). He advises and assists multi-location tire dealers on mergers and acquisitions. For more information, contact him at michael.mcgregor@focusbankers.com.

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*Covered by one or more U.S. patents, including: U.S. Patent 10,266,019 U.S. Patent 9,822,893 U.S. Patent 9,649,897 U.S. Patent 9,033,306 U.S. Patent 8,752,604 and other U.S. and foreign issued patents and pending patent applications listed at www. gaithertool.com foreign issued patents and pending patent applications listed at www. gaithertool.com P: 217-245-0545 E: sales@gaithertool.com W: www.gaithertool.com