Driven Brands Holdings Inc. (DRVN) on Q2 2021 Results - Earnings Call Transcript
Operator: Good morning and welcome to the Driven Brands Second Quarter 2021 Earnings Conference Call. My name is Tamiya and I will be your operator today. As a reminder, this call is being recorded. Joining the call this morning are Jonathan Fitzpatrick, President and Chief Executive Officer; Tiffany Mason, Executive Vice President and Chief Financial Officer; and Rachel Webb, Vice President of Investor Relations. During today’s call, management will refer to certain non-GAAP financial measures. You can find the reconciliation to the most directly comparable GAAP financial measures on the company’s Investor Relations website and in its filings with the Securities and Exchange Commission. Please be advised that during the course of this call, management may also make forward-looking statements that reflect expectations for the future. These statements are based on current information and actual results may differ materially from these expectations. Factors that may cause actual results to differ materially from expectations are detailed in the company’s SEC filings including the Form 8-K filed today containing the company’s earnings release.
Jonathan Fitzpatrick: Thank you, and good morning. We had another great quarter across the board and are excited to share the results. Before we jump in, let me reiterate the power of Driven Brands. Driven Brands is the largest automotive services company in North America. And yet, we have less than 5% market share in this highly fragmented and consolidating industry. Our scale means that we have many competitive advantages like our marketing dollars, data, purchasing power, unit growth to name just a few. We have consistently taken share in this industry for the past decade and we will continue for the next decade. Our four operating segments provide diversification to our business model. Diversity across our brands, geographies and needs-based service categories. These multiple segments provide many levers to organically grow same-store sales in units. And because of our asset-light business model, we generated ton of cash which we reinvest back into the growth engine. Over the long term, Driven has and will consistently deliver double-digit revenue growth and double-digit adjusted EBITDA growth. And this is before we layer on acquisitions which is incremental upside to our model. This is the compounding power of Driven Brands. We're pleased with our Q2 results that we released this morning and all credit goes to our team and our amazing franchisees who consistently deliver. Compared to Q2 of 2020, consolidated same-store sales were significantly ahead of expectations at positive 39%. On a two-year basis, same-store sales were up 19% accelerating from Q1 into Q2. Revenue more than doubled to $375 million. Adjusted EBITDA more than doubled to $101 million and adjusted EPS was $0.25 beating expectations hence beating expectations another part to bottom beat. We are very proud of these results and remain optimistic for the remainder of the year. Our same store sales performance was high quality built on a foundation of marketing and operational execution. We drove more new and repeat customers to our shops. Our teams are executing across all segments, resulting in both one and two year same store sales growth across all segments and increased market share across all segments in Q2. We continue to benefit from our competitive advantages, marketing, operations, scale, inventory which led to more and more sales and more profits for our franchisees and for Driven.
Tiffany Mason: Thanks, Jonathan, and good morning, everyone. We delivered another strong quarter, thanks to the hard work of the entire Driven Brands team. We continue to capitalize an important industry tailwind with a relentless focus on operational excellence. And our proven playbook enables these results. System wide sales records $1.2 billion in the quarter mostly generated revenue of $375 million, more than double that with the prior year. Adjusted EBITDA is $100 million. And as a percentage of revenue adjusted EBITDA margin was nearly 27%. And finally, adjusted EPS was $0.25 for the second quarter exceeding our expectations as a result of strong sales volume which allowed us to leverage our expense base driving significant flow through. This is the power of the Driven Brands platform. A scaled growing highly franchised business with a diverse need-based service offering that delivered very attractive margins. Now, let me break things down a bit -- now, let me break things down a bit more. System wide sales in the quarter was driven by same-store sales growth as well as the addition of new stores both company and franchise store growth and tuck in acquisitions. We have tremendous white space to continue growing our store count is this roughly $300 billion highly fragmented industry. Our franchise, company Greenfield and M&A pipeline are all robust and we are aggressively growing our footprint.
Operator: Your first question comes from the line of Chris Horvers with JPMorgan. Your line is open.
Chris Horvers: Thanks. Good morning, everybody. I know you're not guiding by quarter, but can you give us some flavor on how you're thinking about the cadence of sales and EBITDA on the back half? How are you thinking about it on a two year basis in sales? Are you raising more for 3Q versus later in the year, and if so is that just prudent. And then any comments on margins overall would be really helpful.
Jonathan Fitzpatrick: Hey, Chris, good morning. Thanks for the question. So if I can I'm going to take a few minutes just to give you some more color even than you asked for. I think this could be helpful and probably answer the key questions that are on the line. So let me give you a little bit of color on monthly comps in the second quarter. I'll tell you how we're feeling about July and then I'll answer your direct question, because I think all of that provides a really good picture for you. So qualitatively on the second quarter itself on both a one and two year basis monthly comps were just as you would have expected. April was our strongest as we lapped the strictest shelter in place orders from a year ago. And then same-store sales turned down each month in the quarter as the laps tougher compares. So well same-store sales trended down throughout the quarter, comps in June on a one obviously as we got further into the year we had some challenges in Q4 so the payers a little busier than Q3, but qualitatively I give you that little bit of color. And we expect positive comps across all of our segments. VMT is expected to be flat in the back half of the year. So that's a little bit of color commentary for you in that regard. And I'll stop there. Any follow up questions for me as you think about that.
Chris Horvers: Yeah, so just a maybe on top line just to clarify. So you were saying that June on a one and two year basis you were low double digits across all segments?
Jonathan Fitzpatrick: One and three different. So, on a two year basis low double digit, yes.
Chris Horvers: Double -- low double digit, got you.
Jonathan Fitzpatrick: Yeah.
Chris Horvers: And then the commentary around July would suggest that and it is a bit of more of a travel month, you know all regions in the country had a school, so was -- is July trending better than June.
Jonathan Fitzpatrick: So, I have not completed yet. So, we are off to a great start. We're pleased with this momentum and I will leave it there.
Chris Horvers: Understood. Got it. And then just clarify -- a clarification question, are the acquisitions that you've made in the year-to-date and the updated guidance and just not the future potential acquisitions, or is it excluding both.
Jonathan Fitzpatrick: Yeah. Great question, Chris. So, we've -- our guidance includes acquisitions we've made to date but does not include acquisitions that are under LLI are contemplated in our pipeline in the back half of the year.
Chris Horvers: Got it. Thanks very much. I opened up first and maybe somebody else.
Operator: Your next question comes from the line of Simeon Gutman with Morgan Stanley. Your line is open.
Simeon Gutman: Good morning. Hi, Jonathan. Hi, Tiffany. My first question is a two prater on the Car Wash segment. The first part of it is the penetration. Tiffany, I think you said 47, I think we had 45 on the Wash Club last quarter. Can you talk about seasonally is there normally an uptick from Q1 to Q2. I don't know if we have the numbers but how that compares to a year ago. And then bigger picture, can you talk about any updated thoughts on franchising Car Wash or rebranding to a single banner.
Jonathan Fitzpatrick: Hi, Simeon. It's Jonathan. I'll start and Tiffany can certainly jump in. Look to what -- in terms of Wash Club seasonality I think you know this is a bit of a weird year because you know people are now getting out and driving and that kind of stuff, so I think there is a natural seasonality to the business, but because people are now getting out and driving and all that kind of stuff. So I think there's some natural seasonality to the business, but I don't want to give any sort of deeper color commentary on sort of seasonality with Wash Club subscriptions. We are continuing to execute our plan which is focused on great operations, simplified menu, better selling techniques at the stores and we're reaping the benefits there. So I think it's hard to comment on seasonality regarding Wash Club descriptions. And in terms of rebranding, I mentioned in my comments that we're testing, rebranding some of our stores to take five car wash, it’s very early in the test. We think that having a unified banner potentially in time makes sense from a brand equity and consumer perspective, but very early stages of the test and we'll look forward to updating you guys in future quarters.
Tiffany Mason: And Simeon I think the only thing I'd add is we're making great progress on Wash Club penetration, subscription penetration right. So you've seen that of course that penetration percentage pick up just about every quarter. And more importantly even in the penetration because that bounces around based on the mix of Wash Club and non-Wash Club is that we're adding members every month, right. 50,000 this quarter, I think it was 50,000 last quarter. So the team is making great progress.
Simeon Gutman: And is their seasonality in general not saying what the numbers are, but is there a seasonality to Wash Club penetration or it shouldn't work that way, given that it's a loyalty program and it should build cumulatively over time?
Jonathan Fitzpatrick: Yeah, though the later said they build cumulatively over time.
Simeon Gutman: Okay. That's fair. And then my follow up question is thinking about the incremental margins or the flow through for the remainder of the year. Tiffany you mentioned that you're not fully staffed in some places and in some businesses. How should we think about it even on maintenance this quarter, our model we flow through was I think a little bit better last quarter and yeah, the company is even stronger. And so we're trying to think about. We get the guidance and it's better in the back half, but how do you think about flow through and some of the considerations you mentioned around labor?
Jonathan Fitzpatrick: Yeah. So listen, I want to be really clear here. I don’t want to overplay this card, right. We are certainly not immune to the labor challenges, the nationwide labor challenges. We’re facing the same challenges as everyone else. It’s important to note that in the maintenance segment in particular while we are facing those challenges and it did give us a little bit of incremental flow through. If I just give you order of magnitude here, the company operated store four-wall margins for 40% in the quarter. That’s a combination of car wash and maintenance. If you look at maintenance, maintenance was about 43%. The impact of the labor shortage was about 50 basis points. So with $700,000, it’s 50 basis points. It’s not a large number, right. So it gives a benefit. But the bigger benefit those incremental margins is just sheer car count, right and the fact that consumers are driving more and are pushing more cars through the boxes and those incremental cars are driving incremental margin. So, I don’t want to overplay that point though we are facing some labor shortages.
Simeon Gutman: Okay. Thanks. It’s helpful. Take care.
Operator: Your next question comes from the line of Liz Suzuki with Bank of America. Your line is open.
Liz Suzuki: Great. Thank you. Are you starting to see any pause in the recovery in areas that we are starting to see spikes in COVID cases from the Delta variant. Or does it seem like that recovery in driving activities really still chasing you along?
Jonathan Fitzpatrick: Hey, Liz. This is Jonathan. I’d say that we’re not seeing any detrimental moves in traffic or demand in those areas. But look, this is a moving target. But so far, we are not seeing that.
Liz Suzuki: Okay. How is the breakup in performance in areas that have really reopened I think in the US versus Canada that's still pretty tightly locked down?
Jonathan Fitzpatrick: Yeah. I think I mentioned it and Tiffany mentioned it in our prepared remarks, Canada is hard to say exactly but two to three quarters maybe behind the US in terms of opening. They really started opening up in early July. So still a bit of softness there. And then, obviously we mentioned some of our European markets, I don't want to go through all 13 countries, but you've got various degrees of sort of normality in Europe. So we definitely think the US is ahead in terms of consumer behavior, consumer spending was sort of a lag certainly in Canada and then parts of Europe. That's how we think about it.
Liz Suzuki: Okay. Great. Thank you.
Operator: Your next question comes from the line of Kate McShane with Goldman Sachs. Your line is open.
Kate McShane: Hi. Good morning. Thanks for taking our questions. You had mentioned in the prepared remarks that being in stock when others weren't was a driver of market share during the quarter. I wondered how big of a driver this was and how it looks as the year goes on just give us some of the challenges we're seeing within the supply chain?
Jonathan Fitzpatrick: Hey, Kate. It's Jonathan. I'll start and Tiffany can certainly jump in but then I think I mentioned we were very proactive on this sort of area really back in Q1 late Q2 of 2020. We feel very good about our supply chain and inventory availability and access to inventory for the balance of this year and beyond. There certain certainly pressures there in terms of actual availability in some of the shipping costs we're certainly seeing that. As I mentioned we've successfully passed that on to our customers. And we're seeing sort of active customers at an all-time high. So I don't know exactly when this thing sort of relieves itself. I think we're probably looking at another maybe two to three quarters of this sort of being an impact. But we feel very good about where we are today.
Operator: Thank you. Your next question comes from the line of Peter Benedict with Baird. Your line is open.
Peter Benedict: Hey guys good morning. Thanks for taking the question. I guess, my first is around car wash. I was just curious any comments qualitative or what are around that competitive environment. Just within the carwash segment around M&A multiples where they may be landing and related to that just your thoughts, you talked about the rebranding. Is that something that could be a precursor to franchising within that segment monitoring, just curious your thoughts on that.
Jonathan Fitzpatrick: Sure, thanks Peter. Good questions. In terms of multiples I think, we've talked before that tuck-in M&A acquisitions are sort of in that mid-to-high single digit and no change in that guidance. In terms of rebranding, it's something that was part of our underwriting thesis when we first looked at this business back in August 2020. We do think there's power and having potentially one brand for our car wash business. I think I've also mentioned on previous calls that like we did with the quick lube business we owned that business, company stores for about a year. We sort of worked on the model made some tweaks to it and then obviously we started franchising it. No commitment to franchising the car wash business but I think it wouldn't be unfair to look at that playbook. What we've done in the past and say that we would do it again. So more to come on that.
Peter Benedict: Okay great that's helpful. And my thoughts would be just around the cross segment engagement by your customers you mentioned kind of still I think less than 5% maybe crossover. Just can you maybe build a little bit on how you plan to grow this timeline? Is this something that can see meaningful traction in the next 12, 24 months or is it just a longer term I guess? Thank you.
Jonathan Fitzpatrick: Yeah. I think we mentioned less than sort of 5% on average or sort of visiting one service to it. It's part of our digital journey. It's part of our data journey. We're very early into it. Obviously that overlap matters in terms of proximity from one store to another. So we think this is a multi-year journey. We're super excited about it. And I think we would hope to obviously grow that less than 5% to weigh more than 5% over a multi-year basis. So just an important opportunity for us that we're sort of leading into now.
Peter Benedict: Okay. Fair enough. Thanks so much.
Operator: Your next question comes from the line of Sharon Zackfia with William Blair. Your line is open.
Sharon Zackfia: Hi. Good morning. I guess I wanted to delve a little bit deeper on the implied second half guidance. I guess there is some conservatism it appears in the comp guidance. I know you said July was off to a strong start. I'm wondering if July is ahead of that included kind of 4.5% comp for the second half? And then, also on the margin, I think there's a bit of a step down in the implied EBITDA margin. Is that just seasonality in the business or are you expecting any kind of incremental pressure and margin in the second half?
Jonathan Fitzpatrick: Hi, Sharon. Thanks for your question. So as I said the guidance implies about a 4.5% same store sales guide in the back half. We're pleased with where July's trending. We're going to stay qualitative they're not any quants to share. Look, I think we continue to be somewhat cautious, right, there we are still -- we are not post-pandemic yet, right. There are still some -- some variability in the market. We feel good about our level of execution certainly, as we talked about in our prepared remarks we played offense last year when others were playing defense, so we feel good about how we entered 2021, the way we set ourselves up as the reopening takes shape, we are certainly seeing it in our -- in our first and second quarter trends, but with delta variant out there you know we have certainly taken that -- taken that into consideration and we want to remain prudent as we think about the back half. But we are excited about 2021 and we are going to continue to execute at the top of our game. And hopefully come back with some great news for you during the back half of the year.
Sharon Zackfia: Really helpful. Can I ask a follow up question on the staffing levels, are you fully staffed now, and did it impact any -- any of the top line results from the second quarter.
Jonathan Fitzpatrick: Yeah. Hi, Sharon. We're -- we're staffed to deliver the results that we delivered in Q2. Look there is -- there is constant set of staffing pressures but we're optimistic that that will ease a little bit as some of the you know the employment stimulus sort of eases off in the back half of the year. But you've got to remember that our company-operated stores both Car Wash and Quick Lube are highly efficient labor models, right. They're not a lot of people working in those stores. So, we use great operational procedures and technology to sort of limit the labor exposure there. So, I'd say that there is staffing pressure. But you know you don't deliver the comps that we delivered in Q2 if you don't have a really -- really excellent sort of staffing levels in the stores.
Sharon Zackfia: Thank you.
Operator: Your next question comes from the line of Chris O'Cull with Stifel. Your line is open.
Chris O'Cull: Thank you. Good morning, guys. Jonathan, my question relates to the company’s M&A strategy for the Car Wash segment, and Is the company trying to get into a dominant position that it acquire stores or operate locations and it’s the focus on acquiring change with an express format. Maybe talk a little bit about that? And then I had a follow up.
Jonathan Fitzpatrick: Sure. Thanks, Chris. Yeah. Good to have you on the team. We buy stores in quick lube or car wash because there are accretive transactions. We have a machine that's been built since 2016 in order to execute against that. We acquire at accretive multiples, we integrate make the businesses better. So the last thing I'd say in terms of your dominant position, sure we want to have a dominant position in every single segment that we operate in. And I think scale really matters in this industry. So getting to a scales position in our segments is important to us. So there are some things to think about from an M&A perspective. And the other thing I would point you to is, our quick lube business really provided an amazing playbook in terms of car wash. So we're sort of repeating to some extent that the playbook we've done in our quick lube business. In terms of the type of assets that we're acquiring we are very focused on the express tunnel car wash business. So that's our core focus in terms of acquisitions and greenfield stores.
Chris O'Cull: Yeah. I know you mentioned there were no changes to your valuation assumptions and that acquisitions are still highly accretive. But are you concerned at all that if the number of players increase in PE backed players, I guess, that it could impede your acquisition plans?
Jonathan Fitzpatrick: It's a good question. We have a M&A muscle and experience over the last 10 plus years that second to none in the industry. We have a reputation because we are a known buyer in the industry. And I would say that we continue to do highly accretive transactions. We're not worried about whether there are some smaller type PE groups. We have a mission and we're going to continue on that. And I think it's validated by 50 units have been acquired so far in 2021 and 67 total units since we acquired the business in August of 2020. So we feel very good about our M&A strategy both in terms of what we've delivered so far and in the future.
Chris O'Cull: Great. Thank you.
Operator: Your next question comes from the line of Lavesh Hemnani with Credit Suisse. Your line is open.
Lavesh Hemnani: Hi everyone. Congrats on the strong quarter and thanks for taking my questions. So I had a follow up question on the strategy behind rebranding the car wash at five locations. I'm trying to understand if this is just a strategy because market wouldn't allow for two separate locations. Or is this just being viewed from the customer angle where it might drive more marketing synergies over time.
Jonathan Fitzpatrick: Thanks, Lavesh. I think I said in my prepared remarks we're testing it. So I think we've got a thesis around the benefits for it, but we will come back to you in future quarters. But from a big picture perspective having a single brand which we present to the customers is probably long term a positive for our business so that's what we're testing. And we'll come back to you with more results. But again early in the test and we're excited about what we're seeing so far.
Lavesh Hemnani: Got it. Thank you. I just had a quick follow up on the margin. So you guys are benefiting from the renegotiated chemical contract on model. Is it certain time this year or next year when the anniversary. Is that changed or is it something that it constitutes already the current business…
Jonathan Fitzpatrick: …your question but I think you're asking about the renegotiated chemical contract that was specific to the Car Wash segment. That contract was renegotiated at the end of 2020. So, we lapsed the benefit of that renegotiation in the fourth quarter.
Lavesh Hemnani: Got it. And -- and what about the Take 5 labor model, it’s at the same tank rate.
Jonathan Fitzpatrick: So, the labor model was Q2, sorry, the Take 5 labor model was Q2 of 2020. So, we just lapsed that the anniversary of those changes.
Lavesh Hemnani: Understood. Thank you so much.
Operator: Your next question comes from the line of Karen Short with Barclays. Your line is open.
Karen Short: Hi. Thanks for taking my question. I had a couple of questions just in terms of the crossover shopper, what do you actually think the potential is relative to just under 5% that you cited. And then what is the actual physical overlap in the store base within the appropriate trade area, and then just trying to gauge what the opportunity is on that crossover.
Jonathan Fitzpatrick: Sure. Thanks, Karen. Less than 5% today. So, a bigger number than that in the future. So, let's say that's a starting point for potential. We've got 4,000 locations. There is significant overlap within the businesses but we've got businesses that have different intervals with customers. Some of our customers come multiple times a month when Car Wash, multiple times a year with quick lube and so on and so forth. So, I would say that we have the data because we capture data across all of our businesses, so we know the habits of the customer. We also understand lifetime value of a customer in the automotive aftermarket spend. So understanding where we have the opportunity to capture more of that wallet share is important to us. But in terms of potential I would say we're less than 5% today. We believe that it will be much bigger than 5% in the future.
Karen Short: Okay. And then with respect to elasticity, obviously you commented that you're seeing inflation. Can you just give a little color on what -- where inflation is today and what level if you think there is a level where that may -- you may get some pushback from the customers?
Jonathan Fitzpatrick: Yeah. I think it's a good question. We've talked about this before. But if you look across our businesses take our Car Wash for a second which has an average check of about $10 or $11. Our next smallest average check is about $80 in our quick lube business. So the ability to pass on price either because of commodity pressure or labor and pressure -- labor pressure is very doable. And in fact, and across all of our segments we've done that over the last 12 months and we've seen no negative impact to consumer traffic or consumer demand or no negative impact to NPS scores, Net Promoter Scores, which is the customer satisfaction. So we have a unique position where because of our higher average check because of our needs based services that we offer to consumers that we have very successfully passed on any sort of incremental inflation -- inflationary pressures that we’ve endured over the last 12 months. So I think inflation in summary is a net positive for Driven Brands. And then, remember from our franchisees perspective, they do a great job of passing on price and obviously we get paid royalties off the top line on franchisees. So I think inflation generally is a net positive for Driven Brands.
Karen Short: Okay. Last question, your longer-term algorithm was obviously for low-double digit revenue growth and low-double digit EBITDA growth, but you're obviously a much wider gap on EBITDA growth versus the top line. Any thoughts on that algorithm longer term in terms of whether EBITDA growth actually can be higher?
Jonathan Fitzpatrick: Well, we're certainly not going to change our long-term growth algorithm two quarters into being a public company. So we're certainly sticking with The long term growth algorithm obviously we want to be prudent in terms of how we manage expectations but we're very pleased with what our long term growth algorithm is. And remember that's organic that's before we think about any M, A which is definitely upside to the model.
Karen Short: Great, thank you.
Operator: Our last question comes from the line of Peter Keith with Piper Sandler. Your line is open.
Peter Keith: Hi, thanks guys, nice results. Jonathan two quarters into being a public company, I'm curious what the conversations are like with potential franchisees. Now that your results are public and we can see the attractive for a while EBITDA margins, are you tracked potentially more institutional money or more well capitalized franchisees that perhaps want to own portfolio of the Driven brands?
Jonathan Fitzpatrick: Hey Peter, great question. It's a really good one. I would say that you know look at our franchise pipeline, I think it's up to 750 units. It grew by about 100 units from Q1 to Q2. Demand for our brands is strong. I don't think the public entry of Driven brands is really affecting that demand. I think if the demand is different because these are great businesses, needs based essential services with really strong and unit level economics. So I don't think the average franchisee really cares whether Driven brands is public or not or potential franchisees. And in terms of larger institutional type franchisees, how we think about our franchisees is we want equity that is highly correlated with the term of the franchise agreements. So I don't necessarily want private equity. I want patient equity or typical franchisees in 15 years. And I want people that are investing in our business to marry towards that franchise agreement. So that's how we think about that.
Peter Keith: Okay, fair enough. And then I didn't want to flesh out a little bit more around that cross marketing And then I didn't want to flush out too a little more around that, that cross-marketing. Maybe a basic question but you've pointed out that the premium oil customers kind of mirror customers. Maybe that high level provide some characteristics and what those overlaps are. And then as you're starting to get into this cross-marketing are you finding it easier to drive to oil change or to drive the Car Wash or is it pretty comparable?
Jonathan Fitzpatrick: Good question. So when we said the oil change customer and the Car Wash subscription customer mirror each other that's around demographics, that's around high sold income, that's around proximity to the store likely around the car that they drive as well. So those things sort of line up very well, and not surprising like the folks that are buying sort of the premium oil may have a little more disposable income more likely to buy a subscription for the car wash. So I think that’s -- but again we know that because we capture data from both sides of the businesses. So then we can actually marry up the data to understand which customers are buying both services. That then in turn leads us to, if we have premium oil customers that are not buying Car Wash subscriptions and live within relative close proximity. That's definitely a target opportunity for us to invite them to come to with Car Wash. So that's how we think about that. This is all data driven from our Data Lake which we've talked about before. So I would say just a big opportunity for us, and I think Karen tried to push me on and as well. Less than 5%, what's it going to be in the future? We think it's going to be bigger than 5% but it will take time.
Peter Keith: And that goes mostly taking those oil customers to Car Wash not vice versa.
Jonathan Fitzpatrick: Oh. I think this is an absolutely it's not a sort of one way traffic. So I think it works across all of our businesses. So when you think about our collision businesses, our quick lube businesses our Meineke businesses, other businesses, all those customers are spending money and sort of their lifetime -- what we think about sort of the lifetime value of their spend in automotive aftermarket. So there's opportunities not just with quick lube or Car Wash but across the entire Driven Brands ecosystem.
Peter Keith: Okay. Thank you very helpful.
Operator: I will now turn the call back over to Mr. Patrick.
Jonathan Fitzpatrick: Thanks, Tamina. And I think we're out of questions, but I just wanted to say thank you to the Driven team and especially to our franchisees for just having a phenomenal first half of 2021. And just to reiterate, how optimistic and excited we are for the back half of the year. Thank you, Tamina.
Operator: You're welcome. This concludes today's conference call. You may now disconnect.
