Rick Teasta and Mike Dobson have been business partners for 19 years and buddies for longer.
The duo, owners of Santa Ana-based oil change business EZ Lube Inc., won a Business Journal Excellence in Entrepreneurship Award last week. The awards luncheon was held at the Hyatt Regency in Irvine.
EZ Lube is set to soon open a store in Camarillo, its 80th overall. The company posts annual sales of more than $90 million.
Dobson and Teasta split duties at EZ Lube. Dobson has the president’s title and handles accounting and real estate.
Teasta is chief executive. He deals with marketing, workers and operations. Both share strategic planning duties.
The owners have been in expansion mode, targeting Florida, Texas, Arizona and Nevada for growth. Most EZ Lube locations are in Southern California.
To help fund the company’s expansion, Teasta and Dobson turned to the big-hitters. The owners recently sold a large stake in EZ Lube to a group of investors, including New York-based hedge fund GSO Capital Partners and Goldman Sachs Specialty Lending Group LP.
While there are thoughts for an initial public offering, there’s no rush, Dobson said. It could be two years or 10 years. The focus for now is on expanding the business.
In the past few years, EZ Lube has bought a number of oil change businesses and converted them to EZ Lubes. The company also has developed its own locations.
In 2004, EZ Lube paid $3.2 million for four San Diego-based OilMax shops. Last year EZ Lube bought nine Grease Monkey lube shops in Riverside and opened three others in California.
The pair plans to have more than 100 shops by the end of 2006.
EZ Lube considers itself a drive-through retail business, similar to Irvine-based In-N-Out Burgers Inc.,not McDonald’s Corp.
In 2004, the National Oil and Lube News ranked EZ Lube the 17th largest national chain. This year, it’s No. 14 and the second biggest in Southern California, one of the busiest markets for oil changes in the U.S.
Houston-based Jiffy Lube International Inc. is top dog in the region,and the U.S. Jiffy Lube has more than 2,100 shops. The bulk of those are franchised, which EZ Lube doesn’t do.
The companies have similar prices so EZ Lube has to set itself apart on service, the company said.
EZ Lube attributes its success to its workers. Last year the company opened a 3,500-square-foot training facility to improve service.
The company helps mechanics and managers develop career paths. There are three levels of technicians. They can move into management, where there are store managers, quality assurance managers and district managers. EZ Lube has a promote-from-within policy.
Managers can make up to $75,000 annually and lube techs can earn up to $12 an hour plus bonuses. EZ Lube pays its workers more than competitors to maintain better service, Dobson said.
He said that when the duo launched the company in 1988, they had a major philosophical difference between them. He thought the hardest part of building the business would be raising money to fund growth, Dobson said. Teasta said it would be finding good people.
“Rick was right,” Dobson said.
“Our whole company is about our people and culture,” Teasta said.
Dobson said he also considers real estate one of the most important pieces of the business. The company looks for stores on “Main and Main.”
Stores are typically designed with a Mediterranean flair but have to conform to cities’ desires, he said.
Sometimes it has to lobby for a location. In Tarzana, EZ Lube built a Tarzan sculpture at its store to make the city happy.
EZ Lube’s Melrose Avenue store won the Best Looking Lube Contest put on by the National Oil and Lube News.
Teasta and Dobson started the business with $16,000 in credit card debt. The pair earlier had met as doormen at the Red Onion restaurant in Redondo Beach and became fast friends.
They agreed they’d like to be entrepreneurs and work together.
Teasta came up with the idea of opening an oil change business but Dobson wasn’t sold at first. After doing some research, they discovered it was a booming market.
They bought their first building in Santa Ana. Meanwhile, stiff competition moved in,Jiffy Lube had hit the West Coast.
In the early days, Dobson and Teasta, who were 23 years old at the time, changed oil themselves.
Teasta and Dobson call 1988 to 1991 their toughest years. There were times when they weren’t able to make payroll and ended up getting a bank loan.
