The Journal Gazette
Tuesday, December 01, 2015 3:33 pm

Mike's Carwash cleaves into two

Sherry Slater The Journal Gazette

On paper, the breakup of Mike’s Carwash has the potential to become a hit reality TV show filled with shouting, shaming and showboating.

But if any Hollywood types come sniffing around the Dahm family, they could be sorely disappointed. There’s no evidence of Kardashian-style kraziness here.

Mike and Bill Dahm, brothers and second-generation owners of the company founded in Fort Wayne, say they have approached the split with mutual respect.

And just in case their good intentions weren’t good enough, the Dahms hired consultants who are experts at advising family-owned businesses.

The result is that two separate operations will be rolled out one week from today.

Fort Wayne, South Bend, Evansville and Cincinnati-area locations will retain the Mike’s name but feature a new red-and-white logo with a waterdrop-shaped apostrophe.

Indianapolis-area locations will be called Crew Carwash but will retain the familiar black and white color scheme with yellow, orange and red accents.

"Like all solutions, it’s give and take," said Bill Dahm, CEO of the current company and future CEO of Crew Carwash. Mike Dahm, now vice president of operations, will be CEO of the revised, smaller Mike’s Carwash.

It would have been asking too much for him to walk away from six months of negotiations with rights to the Mike’s Carwash name, given that his brother’s name is Mike, Bill Dahm said with a hearty laugh.

Mike Dahm, born 15 years after the company was, agreed that the only way to make the breakup fair was for each brother to win a little and lose a little.

"People pull you aside" to ask details about the separation, Bill Dahm said. "It’s almost like they’re looking for drama."

David Lansky, a principal of the Family Business Consulting Group, works exclusively with family-owned businesses.

As one of the Chicago-based firm’s 25 consultants, Lansky asks owners to identify their core values. If good family relationships are a priority, the outcome ends up being better, he said.

The Dahms called in the consultant because Mike and Bill want to pass the business – make that businesses – on to their own children. Lansky believes they’re on the right track to success.

"They’re a special family because they’ve done things so well," he said. "They’ve worked out what could have been some chal­leng­ing things."

An empire is born

Brothers Joe and Ed Dahm founded Mike’s Minit Man Carwash in 1948, only the 18th car-wash business in the country at that time, using equipment that their father found for sale in Michigan.

The Dahms decided to name it after their younger brother because they liked the alliteration. But Mike Dahm chose not to join the family business. He pursued a career in commercial real estate and is now a senior broker with NAI Bradley, a local firm.

The operation was a more primitive version of the service Mike’s Carwash offers now. Customers’ cars were chained to a conveyor belt that pulled them through the garage-style building as employees hand-scrubbed the exteriors and wiped down the interiors.

After spending 23 years perfecting their formula, Ed and Joe opened their second Fort Wayne location in 1971. Growth was steady after that.

The Dahms entered the Indianapolis market in 1985 and the Cincinnati area in 1996. Mike’s Carwash expanded into the Kentucky market just last year.

Joe’s sons are the company’s current executives. Bill Dahm, 63, lives and works in Indianapolis, where the company’s headquarters is based. Mike Dahm, 50, moved to Ohio in 1999, when his family was young.

The brothers were able to oversee the farthest reaches of the company’s expansion from their respective vantage points.

Today, the company has 41 locations with at least one more in the works. This month, the Dahms completed the purchase of property for a fifth Fort Wayne location to be built on Dupont Road.

The company closed a location at Glenbrook Square in mid-June after Mike’s executives failed to reach a leasing agreement with the property’s owner.

Focus on service

From the beginning, the Dahm family has believed that exceptional service is the secret in the car-wash sauce.

"I say, ‘Who’s the boss?’ And (employees) say, ‘You are, Mr. Dahm.’ And I say, ‘Oh, no. The customer is the boss. Without them, none of us has a paycheck,’ " founder Joe Dahm said.

The attitude seems to have paid off. In 2012, the company washed its 100 millionth vehicle.

Mike Dahm said the Mike’s Carwash experience appeals to the whole family. Adults appreciate fast and friendly service delivered by neatly dressed employees. Kids love the stickers and cartoon characters stationed throughout the car-wash tunnel.

"What sets us apart is the execution," he said. "It’s all those little details that we do. It’s that professionalism."

Every year, the owners show appreciation for their staff with a party. That first year, they hosed down the driveway of that first car wash on Calhoun Street, set up a card table and set out the refreshments.

The annual tradition continues. This month, workers in the Fort Wayne and Mishawaka locations were invited to Ceruti’s Summit Park for a buffet-style dinner of roast beef, baked chicken, mashed potatoes and more. (Soda pop was the drink of choice. Joe Dahm stopped providing alcohol years ago, he said, because some workers overindulged.)

The manager at each location named a most-valuable employee for the year, calling out the name in front of the crowd. Each of those workers received a $150 check and a plaque and will have his or her name displayed on a permanent plaque in that car-wash location.

Joe Dahm, who has attended employees’ funerals over the years, said some workers have been so proud of the recognition that family members have placed the plaque beside the casket during calling hours.

The evening at Ceruti’s included brief speeches by the Dahms.

"This is our night to honor you," Bill Dahm said.

"Remember, like I always said," Joe Dahm told the workers, many of whom were young enough to be his great-grandchildren, "God, family and work – in that order."

Company executives praised employees for specific accomplishments and ended the banquet with a rousing game of bingo for cash and prizes. The Dahms budget $500 per store for the bingo game, which totaled $3,500 to be divided among the seven locations’ hourly workers.

Similar banquets take place each year in Indianapolis and Cincinnati.

New generation

The founders stepped down from the company in 1993.

But before they walked away, Joe and Ed worked with a consultant on the best way to pass the operation on to Bill and Mike. They hired someone who specialized in working with family-owned businesses, setting the precedent for how Joe’s sons would approach the same dilemma more than 20 years later.

Far from being disappointed that his sons were dividing the company he helped build, Joe Dahm was thrilled.

"I was the one that encouraged it," he said. "I’ve been sending them articles for the last three years. The stories stressed good family planning."

The brothers – both of whom expect to pass the business along to their children – studied up on succession.

"We both read a lot of books and attended a lot of seminars," said Bill Dahm, who joined the family business in 1974.

The men worked with Lansky, the consultant, who helped them decide that dividing the company into geographic areas made the most sense. Because there’s no overlap, each business will be able to expand without encroaching on the other’s territory.

Mike Dahm is taking ownership of the Fort Wayne, South Bend, Evansville, Ohio and Kentucky locations. That’s 15 total. He’ll have 260 to 275 employees.

Bill Dahm will control 26 locations: 20 in the Indianapolis area and six in nearby Indiana cities. He’ll have about 500 workers.

"Fortunately, we’re in a business – rather than one big factory – where we can divide it up," Bill Dahm said.

When family can agree on the process, it’s much easier for them to accept the outcome, Lansky said. "People feel they were treated fairly."

The consultant meets all parties individually before they meet as a group, and he makes it clear he’s there to represent the business, or the family, as a whole. Lansky says he never aligns with one individual or faction.

Only about 30 percent of family-owned businesses make it past second-generation ownership, he said, citing research by one of his colleagues. Only about 3 percent make it past the third generation.

Citing client confidentiality, Lansky declined to go into details, but the brothers provided some.

Real estate professionals appraised each location, which allowed financial experts to propose an equitable split. The details are private, but Mike Dahm said the final package includes money to help Bill pay for the advertising he’ll need to get customers familiar with the Crew Carwash name.

Going forward, the companies will do purchasing together, bargaining for lower prices from suppliers. But they won’t have to coordinate prices or other policies.

Mike Dahm is already thinking about adding three to five locations.

"We don’t want to be the biggest," he said. "We want to be the best." 


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