Costa Kapothanasis has an educational background in finance, but he may as well be an engineer too. Or, perhaps more accurately, a reverse-engineer. Before he was president and CEO of Costa Oil 10 Minute Oil Change, Kapothanasis was in his mid-twenties entering the quick lube industry in 2014. He already had a secure job elsewhere at the time. But his self-proclaimed “entrepreneurial side” wanted more, and the quick lube industry felt like the right fit for an innovative business approach.
“I spent a lot of time at my desk kind of reverse engineering what the consumer thought the problems in our industry (were),” Kapothanasis says. “I came up with a game plan to put my twist on things and that's how we got where we are, is building upon the premise of the oil change-only model.”
Thus, the concept behind Costa Oil 10 Minute Oil Change was born. Fast-forward to 2023 and the Costa Oil network of company-owned and franchise-owned stores stretches across many states. In fact, Kapothanasis says they have sold over 150 territories over the past 20 to 24 months with franchising alone, which means rapid growth is ahead for the network. Kapothanasis owns 18 shop locations, with plans for more corporate stores to come. In total, there are over 30 Costa Oil locations.
Growth is good, but that’s not all that keeps this operator motivated. When thinking back to the very first store he opened in Harrisburg, Pennsylvania, he recalls the mission behind the model.
“We had two things we needed to tackle, and I and I really piloted it at that first store in Harrisburg. We needed to one, go back to the pure oil change-only model and two, get that credibility back,” Kapothanasis says. “And it all hinged on educating the customer as opposed to preying on ignorance and hard upsells and putting your employees in a position where they felt terrorized that they were going to lose their job if they didn't sell enough air filters.”
For Kapothanasis, his business strategy is as big-picture as it is detail-oriented. With each goal he sets, he carves his own path towards achievement. He’s not afraid to do something different, and in this industry that deserves recognition.
It’s for these reasons, and many more, that Costa Kapothanasis is the 2023 NOLN Operator of the Year.
Inspiration is Everywhere
At the beginning of his journey as an operator, Kapothanasis says he had a lot to learn. But unsurprisingly, he had a plan of attack.
“I asked, ‘Why?’ a lot when it came to this business because I didn’t have that previous exposure (that) some of the old hats in our industry had,” he says.
He looked outside-of-the-box for inspiration. He recalls one time when he was driving through Amish country in Pennsylvania. He came across an Amish pole barn company producing 32 by 24-foot pole barns for $17,000. Comparing this price to the high budget point for constructing new quick lube buildings, his wheels got turning.
“I know there’s more to building a building than just the shell of the building of course, but for me, I was like, ‘Okay … I can do oil changes in these buildings. So why? Why can’t we build this building for a quarter of a million dollars instead of a million dollars?’” Kapothanasis says.
Thanks in part to that experience, he was able to come up with a building design that could do the volume he wanted to achieve while also utilizing real estate effectively. In practice, this has included opting to transform underutilized spaces such as former gas and service stations. It wasn’t an easy route, by any means. Kapothanasis says there have been challenges along the way with inflation rates and supply chain issues, but it’s been well worth it to do things his way.
“Me being a focal figure in the business allows me to be flexible and move quickly,” Kapothanasis says. “I don’t have a board of directors that can dictate how I do things. I don’t have to worry about shareholders and distributions.”
Costa Oil’s oil change-only model, complete with smaller and more efficient buildings, is geared toward the wants of the consumer, according to Kapothanasis. It’s from customer feedback, including reviews that he saw on Yelp in 2014 detailing how people wanted a timely oil change service experience.
“Then, if you couple that with all of the companies and startups that were really getting big investment money behind them, they were all businesses that sold customers their time back,” Kapothanasis recalls. “I think our industry was really ahead of its time ... that was literally the sole concept of the quick lube business … we’re trying to be the least amount of impediment on your day.”
These days, while some shops opt to add on more services, Kapothanasis believes in the straightforwardness of Costa Oil. But he makes a point to say his operational approach isn’t a rigid one.
If he hears from customers that they want something else, he isn’t opposed to offering it. But he needs to see the evidence first. Right now, he is seeing success in the niche.
“I think sometimes our industry has a bunch of (people who) follow the leader, and things that move our industry are the larger guys … ‘What are they doing? We’re just going to do that,’” Kapothanasis says.
Costa Oil introduced franchising in 2021, and along with that came a new perspective for Kapothanasis.
“When you're a franchise system, the first and foremost ... important thing is supporting the people as they go through their franchise journey,” Kapothanasis says. “For a lot of these people, they're putting life savings on the line for the dream of owning their own business and they (believe) in your brand, so you need to take that very seriously.”
The shift from Costa Oil being solely company-owned to also including franchise owners meant that Kapothanasis had to tweak his leadership approach. He describes himself as a leader with two components: An operator and a franchise CEO.
“When you become a franchise CEO, then your role shifts dramatically to a place of compliance (and) support,” Kapothanasis says. “Still very process-driven, so that part does overlap quite a bit, but I can’t take a day off and go in the pits and do oil changes.”
That being said, Kapothanasis is actively trying to reincorporate more of those hands-on work opportunities for himself by building a solid foundation of support.
“I have built a team around me that has allowed me to start doing that again which I think is important and so I will be able to be back in that mind frame which will only help, I think, everybody,” Kapothanasis says.
He says his perspective as an operator will remain important no matter what. It’s what got him to where he is today and is what helped make him a leader.
“I am an operator at heart, and I've always been an operator which has allowed me to always have a pulse on what my employees are feeling (and) on what the customers are feeling,” Kapothanasis says.
Finding True North
When asked to identify what he’s most proud of with Costa Oil, Kapothanasis immediately mentions the relationships that have developed along the way. For example, he points to a “hilarious” manager group text that allows everyone to stay connected, even outside of shop walls. Relationships are a key component of Costa Oil’s success.
“Because we have such little turnover compared to the rest of the industry, we've had guys forge … lifelong friendships. And it's not completely altruistic,” Kapothanasis says. “It’s made my life easier to not have that turnover and I’m very proud of that.”
These deep connections don’t just come out of thin air. It starts with the people, and it has a lasting impact. Kapothanasis notes that some of his original employees are still with Costa Oil to this day. That’s no coincidence. In practice, good character is a detail that does not get overlooked in the hiring process.
“We literally put in all of our job ads that we're looking for kind people,” Kapothanasis says. “That cannot be overstated in the automotive industry. The bar has been so low for so long.”
That’s not just a throwaway line. It’s something that Kapothanasis believes in and enforces. He says he’s never fired someone for making mistakes, but it can be a deal breaker if someone isn’t kind. Prioritizing this personality trait starts at the top.
“For me as a leader, I need to instill that,” Kapothanasis says. “I need to follow through with that in terms of ... being kind to myself (and) to them (and) not being above anybody, (and) not making anyone feel belittled.”
That support extends to staffing efficiencies as well. Costa Oil uses a proprietary flow chart allowing for high volumes with less staff while maintaining quality control. There is also an internal website for franchisees and corporate staff to do base level training, which helps ensure consistency across the board. Also, there is another common theme across Costa Oil: Its guiding force.
“We say all the time, ‘The oil change industry is our north star,’” Kapothanasis says.
He describes this notion as a bit of a dichotomy, as there needs to be a balance between following that star and remaining flexible as the needs of the customer may fluctuate. But in that balance, there is opportunity to be found. And Costa Oil will continue to take advantage of that idea going forward.
Brand awareness is top-of-mind for Kapothanasis. This enthusiasm can be seen during Costa Oil “Discovery Days,” which are events for prospective franchisees to learn more about the business. Kapothanasis says he often will ask attendees what first comes to mind when they think of fast food. For a while it was split between McDonald’s and Chick-Fil-A. But more recently it has shifted to nearly everyone answering with Chick-Fil-A.
“What I tell people after we do that exercise is there's not any industry that cannot be disrupted,” Kapothanasis says.
It’s an example that shows anyone can achieve brand awareness and become top-of-mind, he says. That’s what he hopes to achieve with the Costa Oil model well into the future.
“I think we're going to be able to continue to open stores and legitimately be a national player in this space where people think of us when it comes to the oil change-only model,” he says.