Award Runner Up: Costa Kapothanasis
Years ago, in the early 2010s, Costa Kapothanasis had worked his way into a good finance career at a big-name institution. But something nagged at him. He wanted to set his own limits at work.
“I’ve always been entrepreneurial, so it was very difficult sitting in a cubicle, staring at a screen all day and not being able to have an impact on the organization,” he says.
But it was tough to leave a safe career track during those years, as the Great Recession left lots of college grads under-employed. Kapothanasis first started looking into quick lubes as a potential part-time gig.
More importantly, he looked into deals that could be had with a small initial investment from a young entrepreneur.
“I started reading some books on negotiating seller finance deals and sweat equity deals,” he says. “Different ways you can convince someone who’s getting out of the business to sell to you without putting a lot of money down.”
He found such a deal in Harrisburg, Pa., which he acquired and then opened in 2014 as his first quick lube shop. It became a blueprint for how he would eventually run a growing quick lube network. Kapothanasis has his eye on growth opportunities that don’t need to be neatly grouped in a single market, and he’s built a data-driven business model that focuses on the oil change basics.
His success on this path led him to take a big leap in 2021 and start franchising with a single-bay model that he devised. It’s his attention to detail, thoughtful approach, and bold step toward franchising that has earned him this runner-up award from NOLN.
Of course, Kapothanasis didn’t know all that when he took over the Harrisburg shop in 2014. But it was a pivotal deal. He recalls the date very clearly.
“We got the deal done and signed on April 1, so five days before I turned 25,” he says. “That was a big deal to me.”
The Costa Oil company-owned network stretches through Maryland, Pennsylvania, Ohio, and Illinois. Kapothanasis specialized in taking over existing quick lube properties that were good deals. The goal was to shorten the time to profitability and roll out his quick lube model.
That can be tough, because the oil change business isn’t like an eatery or retail store. Customers don’t come in every week; they're waiting for the service interval.
To ramp up quickly, Kapothanasis focused on the costs that he could control. Part of that is offering a simpler model featuring oil changes and a few other quick services. He looked closely at inventory and performance data to limit the number of SKUs he needed to carry. And he jumped into lease deals that would be favorable for growth.
“If we optimize the inventory on the shelf, in the tanks,” he says. “And then control our lease costs, control our fixtures and furniture. To an extent, control your labor costs, then you can have a very successful quick lube with that oil change model.”
Kapothanasis cherry-picked his network with those factors in mind and worked his way through Pennsylvania and Illinois first. When he reached his fifth location in Youngstown, Ohio, he met a different challenge.
The previous owner had stripped nearly the entire building of useful equipment, down to the last bit of piping. It gave him an opportunity to build out a more customized facility that was built for his kind of business.
Today, that location is doing well, he says, and it gave him a test run for the eventual franchise model.
Jump Into Franchising
During a video interview with NOLN in early 2021, Kapothanasis announced that he was launching a franchise model for Costa Oil 10 Minute Oil Change.
It’s based around his low-overhead philosophy to bring quick oil change service to customers and short ramp-up periods for franchisees. Kapothanasis says that he built the model to be good investments but also attractive to owner-operators with lower liquidity requirements that can price out some operators.
“I wanted to present a model that was owner-operator friendly,” Kapothanasis says. “It was very important for me to satisfy both ends of the bell curve—the owner-operator on one end and the multi-unit portfolio sophisticated investor on the other end.”
As of this writing, Costa Oil had announced franchise deals in three states, and he says that they’ve been recruiting for more. He’s eager to see how far his model can go.
Kapothanasis is a unique operator because he comes at his work with a business-side mind and the attention to detail of an owner-operator. His view is that of a young startup looking to revise the model a bit to give people what they truly want.
“When we as a company have our core values, and eliminating friction and being kind are at the top of our pillars, that’s really what we’re doing differently,” he says. “We’re putting an emphasis on that while creating a model that allows it to be cultivated in the first place.”