Elkhart Ribbon-Cutting Signals FunTown’s Rapid Expansion – RVBusiness – Breaking RV Industry News
ELKHART, Ind. – With a ribbon-cutting celebration Thursday at its newest retail store in Elkhart, Ind., Fun Town RV not only further solidified its aggressive expansion pace, company officials promised there would be more to come.
From the corner office of the former International RV Wholesalers dealership on Elkhart’s west side – FunTown acquired the business in early September – Jarrod McGhee, FunTown’s founder, president and “chief bottle washer,” vowed that there would be additional expansion announcements in the near future.
“We’ve got another store in Grand Rapids, Mich., that we’re opening, two in Little Rock (Ark.), and there’s six more on the board that’ll be announced in the next six months,” McGhee said, before shedding some light on the reasons for FunTown’s expansion pace.
“Well, it’s not a need to get bigger,” he said. “I mean, anybody that has a competitive spirit wants to win, and when you’re really good at something – and I think I’m the best operator in the business with the best team in the business with the best products – why not get bigger? I mean, the opportunity’s there and to me it’d almost be a sin not to grow and get bigger and expand.
“I think that I owe a lot of my success is my team,” he continued. “I’ve got a lot of really good veterans who care. They poured their heart and soul to help me build this company and I owe it to them and me to keep growing, keep the company healthy, keep going in the right direction.
“I’ve got a young man sitting right beside me,” he said, referring to his son, Chandler, “who looks at me about once a day like I’m sitting in his seat. So, I want to have this company raring to go from when he’s starting to take the reins and take over and take us to the next decade.”
As far as the ribbon cutting, McGhee and his team were all smiles as they officially opened the dealership’s second Elkhart location – which happens to be a Forest River-exclusive store. FunTown’s first store in Elkhart is dedicated to PDI.
Earlier, McGhee told RVBusiness that his third Elkhart location was going to be another PDI operations, one large enough to allow every single unit slated for a FunTown store to first undergo an inspection by his team. He added that FunTown will host a job fair in October – details are still being finalized – to help staff that new PDI facility, among other positions.
“We need everything from technicians, service operators, service writers, and management from entry level positions all the way up,” he said. “We’re going to a 100% quality control every unit before it leaves Indiana and goes to any of our stores, and we need a lot of help to do it. We’d love to have experience, but you don’t have to have experience. If you just have a good attitude and you’re willing to work, we will have a spot for you.”
During that same conversation, McGhee shared some of his expansion strategies as well as his thoughts on the RV industry and its approach to the customer experience. What follows is an edited account of that conversation.
RVB: Congratulations on the grand opening of your company’s newest store in Elkhart. You’ve been on quite the growth spurt lately, Jarrod. Was this always in your plans?
McGhee: Well, Fun Town RV started in 2010. We had one location and it grew slowly. We were really focused on infrastructure people when we first started out. We’d had maybe a store or two a year. I never thought I was going to be a big chain. I started out just wanting having one store do a really good job, service North Texas. Then it became two stores, three stores. By the time I got to four, I realized I’m a company now and I had to start structuring it that way and put layers of management in and things like that. So, we started getting a little bit bigger and started adding processes and management.
A few more years go by and some of the outside money started coming in, the Wall Street money, and they started coming in and buying people and buying people out and paying these big multiples. I kind of stepped back and scratched my head and said, ‘Why are they paying us? I can do a better job. I can rebuild the store, start from scratch, not have bad habits, go in there, teach people how to do this right, do the service right.’
RVB: And you align your stores around a customer-experience mentality, don’t you?
McGhee: Because I came from the floor and selling RVs, one of the things that always bugged me was I knew that we could do a better job with the customer experience. The day you buy the RV, you should be just as happy as the day you’re camping in it. It shouldn’t be a struggle. You shouldn’t be still repairing it the day you pick it up. It should be a happy, fun experience.
So, I took that thought process when I was trying to build the dealership and I wanted to do the PDI facility up here so that all my dealerships got a quality unit so when they sold it to the customer, they’re not repairing it while the customer’s picking up. Then do a walk-through experience with the customer, learn how to use the unit right.
From working the floor and being just a general sales manager at one point, I learned that 50% of the problems the customers have after they buy it is because they weren’t taught how to use the unit right. The other 50% is because they were built with a defect that came from the factory that didn’t get caught before you deliver it to the customer. So, I said, ‘If I can work on limiting both of those ends, I’ll have a better product and I don’t need to go pay somebody to buy their dealership. I can build a better mousetrap.’ That’s really what I felt I did.
It took about 10 years to get the infrastructure built up, but now that the market’s kind of taken a downturn and those guys that overpaid for those dealerships have all kind of decided, ‘Oops, we spent too much money and invested money that we shouldn’t have’ – or they haven’t and they’ve all calmed down – we’re able to go out and start greenfielding and buying locations and markets and putting our processes in place at a reasonable price, getting the product that we want, going and giving the customer a better value because we didn’t overspend on the dealership or overspend on buying something.
We’re able to pass that value and that savings and all the experience we’ve had over the years of how to deliver an RV right, how to purchase one right, how to get it to customer right to these new markets and they welcome us with open arms. I haven’t opened a dealership yet in a market that we didn’t just take right off and get going.
I think my smallest store right now is doing 35 units a month. My largest store fortunately retails 250, 300 units a month. So, it’s been a journey. I mean, I literally was working at Fun Time RV back in 2010 and it goes out of business. I’m like, ‘Oh no, what I’m going to do the next day.’ I opened one store and I look up 15 years later and I’ve got 24 locations – about to have 30 – and a little over 800 employees. It’s been a whirlwind.
RVB: And, as you mentioned, the new PDI facility will allow you to perform an inspection on every unit you order?
McGhee: We decided that we’re just not going to let one leave without quality control. We’re going to work with these factories hand in hand.
We’re going to quit calling an item when they sell it to me before I sell it to the customer and it’s broken a ‘warranty item’ going to start calling it a ‘defect.’ We’re going to start identifying these defects and trying to figure out how we’re going to get the trailer from their plant to my plant door without having a defect on it.
I mean, I don’t think industry’s going to go Six Sigma overnight, but we’re working hand in hand with Forest River and THOR to figure out how we’re going to get a better quality of product from their plant door to my plant door so I can take it from my plant door to the customer’s driveway and have as few problems as possible.
Right now, we’re doing about 50%. In 2018, when I built the original PDI facility, I could do a 100% of my inventory through it. But the company’s grown a little bit since then. We’re about 5% of the nation’s sales now and it’s going to take another plant in order to be able to get them all through the PDI process. That’s our goal: in the next six months have 100% of our inventory through PDI before it ever gets to the store.
RVB: Jarrod, a few years back you told us you were quite happy with staying in Texas. Now, you have locations in Oklahoma, Kansas, Arkansas, Illinois, Indiana and Michigan. What happened?
McGhee: Well, I was happy with greenfields in Texas then because there was some people running around using other people’s money, overpaying for dealerships and paying six and seven multiples. I was happy to let them run around and do that, but now I’m over to a more realistic time.
I can go into markets outside of Texas for not much money and set up a nice little dealership and get the right brands in place and do a good job for the community and for the RV community and get in there. I believe some sanity is starting to come back to the industry now, but they’re at the expense of some equity companies. If you made a little bit of public money out there, I learned a lesson that the RV industry is not the auto industry.
To me it’s the right time. I was waiting for the downturn. I was waiting for sanity to come back for the industry before I started spreading out and going to different states.
I’m very happy with my 30% of the state of Texas I have – and I don’t know why I don’t have the other 70% yet, but I’m working on it. But, yes, I’m going to be going to several other markets.
