#282 - TIADA Edition - Meet John Frullo

Foreign.

You are listening to the independent dealer podcast Texas Edition, with hosts Luke Godwin and Jeff Watson, a podcast by Dealers for Dealers.

We love to get talking about Texas things, and we're coming up on convention and we've got a new director to talk to here, Jeff, and all kind of stuff that's gone on since the last time we had a podcast for. For Texas Style. And so, Jeff, what we got going on?

Well, John, first off, give us an introduction to. I mean, there's probably very few people in the association of Texas that don't know you, but maybe some that are listening from outside the Texas Association. Give us a quick background. Where did you come into the scene? What's your background with used car dealers or the associations? Tell us where you're from, what you do. Okay.

Well, basically, the history of me goes back quite a ways as far as the car industry. My grandfather and his brother had a car dealership and believe it or not, they sold Plymouths and DeSotos. You ever heard of those?

DeSotos?

It was a while ago. Exactly. Yeah. I was actually looking them up there. Some pretty neat old DeSoto cars out there. But from there, I worked at a dealership in high school, partially through high school, and then in college. And so I'm a little familiar with that side of it. I think part of it is going back and just my background as far as being a small business owner. I know how businesses run. Of course, our industry is made up of small businesses for the most part. You know, there are large businesses out there, but by and large, they're mostly, you know, what we would call mom and pop shops. So that, along with my background as a CPA and then the work that I've done in finance kind of set me up for this. Also spent 12 years in the legislature. And that's where I became familiar with TIADA and how they work. I've helped them with bills, attended their conference in the past, and so I'm familiar with the organization from that side. And then also in my trade association actually went up, became a board member, went up through the ranks. And, you know, my last step was chairman of the board and had a printing association here in Texas. We ended up having, I guess probably at that time, about a thousand members in several different states. And so it was a, you know, somewhat similar to TIADA in scope. And so it's kind of a broad experience or group of experiences that come together and, you know, got me in this position.

John, that is a. That is a rare recipe that you mentioned. There you've got accounting background, you've got small business experience, you've got legislative experience, and you've got trade associate experience. Like that is sometimes when you see executive directors, they have one of a couple, right? Like, well, I know the law side or I know the legislative side, but I'm not really good at running a small business, or I don't know the pains of this, that or the other, or I don't understand the numbers. Like, that's a pretty good covering you've got there from your history.

That's. That's a great resume. And John, I would want to know, you know, being in the legislation, legislature in Texas, what did you learn there that really, you know, prepared you to be an executive director of an association?

Well, basically how the legislature works. So I started in March. Of course, we were, you know, pretty deep in the legislative session at that point, and it was just full speed going on. So I knew how things were, how things didn't work if you didn't want them to work, what you could do if you wanted to kill something, what to do. You know, I was in the battlefield down in the trenches there for 12 years, and so I know a lot about how that works. I know people that are in the legislature, both the House and the Senate. They're my friends, they're folks that I worked alongside with for a number of years. So we've got some great relationships. The few times I was over at the Capitol, we would literally, you know, it'd be like, frulo, what are you up to? It's good to see you. That type of stuff. Not who is this guy with this association or what are they wanting? I mean, it was like they wanted to talk about what I'm doing, what are your kids do? And that type of stuff. And so, you know, it's a neat deal. And so from that perspective, it was a lot of fun. And that got me ready for how that worked. And of course, as you know, the legislature and the laws that are enacted have a huge influence on what we can do, can't do, how we do it, costs that we incur things that people can do to us. And so it's, you know, just critical that we know and are apart and are at the table and those things are being discussed and we work.

So. So give us that insight, John, then from your side, you've been on both sides. How are dealers supposed to stay informed about that kind of stuff? Like, obviously being involved in the association is, you know, kind of the obvious answer, but are there Any other tips or advice you would for dealers in this situation?

Well, I think, you know, that's. I don't want to act like it's self promoting or something, but Tiada, as you know, is a great organization. They work hard, they're doing a lot of things for a lot of people that don't even know what's happening. They, you know, are getting the benefits of items that we're working on, discussions that we're having. The things that I would say is first off, be a member of Tiada because what that does is when the legislature gets going, it gives us power to go and talk to either those house members, the Senate members, 28 Senate members, 150 House members. When you walk into their office and you live in the same town or you're in their district, they want to meet you. They want to understand what effect these items are going to have for or against your business. And so that's critical. The way the association reaches out is we have an email blast on the first and third Thursday. We get information out that we have a great magazine, a dealer magazine that goes out both digitally and in hard copy. We've got the conference that's coming up that's kind of occupying all of our time right now. I think one of the best conference for automobile dealers in the independent auto industry that is out there. And it's right here in Texas. Just a super top shelf event, great resort. At times when we need, need help, we'll call up members or we'll call up our members. We'll also reach out with email saying, hey, go talk to these people. Here's what's going on. Let them know how this is going to affect your business, small business in their district. And you know, that's what I do. So I said pay attention to the stuff. We said, say, look at our blogs, go to the website. Got a great website. If you have questions, go ahead and look at what we have on the website. Call us up. If you remember, we add, we do this sort of stuff. We will work with you. So there's so many different things to stay informed.

Go ahead.

And also you have a podcast that people can listen to, dealers can listen to.

Absolute top shelf podcast. Exactly.

Also, though you were in the legislature for 12 years, do you, do you remember some instances where dealers reached out to you on some laws that were, that were trying to get pushed through that that really, you know, made you think more about what was going on in the auto industry?

Sure. No, it does. You reach out with that I know a number of dealers. I was out of Lubbock, based in Lubbock, and that's where the district, District 84 is located primarily. So I got to know dealers up there. Of course, our great members. You know, Paul Scott is also now on the DMV board. He was up there, learned about his business. The, you know, just, just you meet those people, you understand what's working, how they're helping people. You know, our deal isn't necessarily getting somebody a car. We want them to have transportation so they can go to that job, so they can go to the grocery store. You know, Texas isn't like living in downtown New York where, you know, everything you need is within three blocks. It's just maybe 10 stories, 20 stories up. You know, you may have to drive 15, 20 minutes to get to the grocery store, to your church, whatever. It. We, we need transportation and we provide great transportation.

Yeah. So you said a really great thing there about being involved early or being involved dealers, you know, to get involved early in the lettuce in a legislator's career. Right. So your local guys, when you start supporting them and you show up to the rallies and maybe you make donations. And I think that helps a lot more than just trying to come in at the last minute and try to get your legislators attention or your Senate, you know, try to get their attention at the last minute on a bill you don't like. So I like how you said that, like getting to know them early when you can actually get their attention and then supporting them as they, you know, go throughout their careers.

Well, it's like anything, building a relationship. And that's what we're doing. You're building that relationship. You get to know them. When they come up to you, you're not wondering, what is this person wanting? Why do they want me? Also, as you know, as a legislative session in Texas starts, it's kind of slow and you're wondering what's going on? Is anything ever going to get done? And then it just kind of crescendos. And at the end, especially like the last 60 days, it is crazy. And you can't even get in to see them. So, you know, at least if somebody is sending them a text and they know, oh, okay, this is. Yeah, I know Billy. Oh, wow. I didn't realize this was going to affect Billy this way. I need to look at this rather than, well, I'm hearing from all these people that are telling me, good, it is. Well, here's a guy that I know and he's saying, it's not good. And you know, it makes you look at things. And I think that that's what's important is building that. Building those relationships into pack is another. We have a great pack that we provide money to legislators that are friendly to our industry. We want to keep them there. We don't want them to be displaced by somebody else. And so it's important for us to be able to help them stay in office. And that's what we do.

Yeah, that's. I tell you, Tiada is really, really a great association. You know, there's. It's the cream of the crop when it comes to the associations for dealers in, in the, in the U.S. y' all have had a lot of activities and events so far this year. Can you talk about what y' all have done for dealers so far this year and what's planned for the. For the rest of the year with the iada?

Well, I think part of it is of course, right. Right now we're focused on the conference coming up. You know, one of the biggest conferen type in the country. Great reputation. To give you an example, our expo booths were sold out months ago. And you know, it's. It's good and it's bad when people come up and they were coming up to me as soon as I started, hey, John, I need to get a booth and I'm going, okay, we can get you signed up for 20, 24. No, no, no, this year. And it's like, we can't do it. We don't have any booths available, you know, so it's. I think there is that. We've been doing town halls to a town hall in Austin right about the time I was starting, had one back in Lubbock. Ironically, it was scheduled, so. And then we just did one at the Manheim auction in San Antonio. Real good turnout there. Probably over 50 people and talking about bringing information to them on some of the legislation that's happened. Had tax assessor resty out there. He did a great synopsis of what was going on. So again, it's just getting involved. The FTC course that everybody's required to have, we went and spent our money developing an online course. It's just gone. Gone Gangbusters is easy to use, has had great reviews and I guess one plug I'd put in is you. If people that haven't done that yet still sign up, take the course. There's a lot of reasons why, just because that date has passed, if you haven't done it, you need to do It So I think, you know, again, there's just a lot of different things that we do going forward. We're going to have more town halls. We're going to get out there and visit people. Me is in my new role. I want to get out and meet dealers. You know, I mean, the guys that we have are the salt of the earth folks out there. They're involved with the baseball teams, they're family folks, they're involved in their churches, small businesses. They're the community folks. It's just, you know, they're neat folks.

Yeah, the, the FTC safeguards that y' all put together, that course was great. Our whole staff did it. So it's not specific to Texas. Everybody can take it. It's really good.

Yeah, let's. John, let's give the listeners some meat and potatoes here. If you're a Texas dealer, I want to go through some of the legislation that you guys have either helped get through or block that was bad for dealers because I want to tell them kind of, hey, this is what you guys are working on. This is the power of the association. So talk to us first about this Crusher bill that I think you'd mentioned or it's been proposed before. And you guys are continually having to shoot this thing down because it's bad for dealers. Give us a brief, a brief recap of what it was and why you guys are crucial in it.

Well, what the crusher bill is and let me take a step back. So when you have legislation that's file, it's usually good for somebody and bad for somebody else. Sometimes overall it's a lot better to have it and sometimes we're not so sure that, you know, depending on where we're at, where it is, the system of making laws is designed so that bills don't pass. That's kind of. It's hard to get a bill to pass. In the past. This crusher bill does exactly what it says. It crushes cars. It takes the cars that our folks are selling or independent auto dealers and people, they get behind the payments for whatever reason, somebody takes the car. Other states have real problems with this, where they basically just grab the car, they take it off to one of these places that crush it and then they get a couple hundred bucks. Well, meantime, you know, we may have loans, our dealers, our members may have loans for several thousand dollars on those cars and they can't get it. So what happened was they were trying to say we had an agreed upon terms and this particular year it was on the Senate Side right before we were supposed to have a bill filing. A matter of fact it was on the night before. Basically late afternoon we found out that they were, they said no, your agreed upon terms are gone. We're going back to the original bill which we didn't agree on. We called up some of our members. We had two of them that literally got in the car that night from Houston, drove to Austin to be here the next morning to testify against the bill. You know, we went through that, we had other people, we as an association testified against the bill and that was on the Senate side. It ended up not going anywhere. It didn't even get brought up to a vote. On the House side it was also brought up, we heard testimony, TIA DA put together that testimony and fought a huge industry, the auto recyclers, the metal recyclers and ended up not that neither in neither the House or the Senate was that bill brought up for a vote. And it died. And you know, it's where we wanted it to be. So that was one of the situations where we last minute had to completely change what we were doing, be proactive. We were making calls all over the state getting people here and ended up, you know, in essence killing that bill.

Well, the second, yeah, the second one we want to talk about is the temporary tag bill. What is that? What is that and what's going on with that in the, in the committees.

And all that good stuff that. Yes. Earlier Luke, about what we're going to be doing for the rest of this year. We're going to be doing for the rest of this year and a lot of next year and that is they're getting rid, the state is getting rid of the paper tags. So Texas will no longer issue paper tags, will have metal plates. You get the metal plates that you have on your, you know, if it's a pre owned car, you'll use those old plates or you know, you can new car, you will get plates but there will no longer be paper plates and there's a bunch of other items that we're getting in there, you know that are going to be changed. Part of it's going on web dealer, you know, it's, it's going to have major changes and all of this is in response to the fraud that was occurring where a lot of people were just out there. They would go sign up as if they were a dealer and over a weekend issue 20, $30,000 or 20, 30,000 temporary tags to people all over the country.

Holy cow.

Yeah. So they could drive cars. Interesting Fact is, when we were again testifying on this bill, House Bill 7:18, we were talking about, and DMV did a great job of putting procedures in place to stop that. They changed things, things like fingerprinting, limiting the number that people could originate. But in the comparing quarter, the first three months, year over year, we saw $500,000 or $500,000 quantity reduction in the number of paper plates that were issued. So it went from 1.5 million down to 1 million. And so it kind of shows you the idea and the scope of the fraudulent activity that was going on.

A third, A third of temp tags issued were.

Wow.

Wow.

Roughly. Now, some of that could have been economic, but still, that's a huge number.

Yeah.

Yeah, that's, that's crazy. So, so our next one is the, the elimination of safety inspections. That's something they've done in my state a couple of years ago. What's going on with that in Texas?

They did that in South Carolina about 30 years ago.

Interesting.

Well, they got rid of the stickers a while back. We didn't have to have a sticker. And then this year they got rid of the safety inspection, so it's no longer required on just the normal old cars. So people are excited about that. What's the one thing your license plates run out and most of us keep our cars safe and running and you know, we make sure that they work. I mean, I don't want to drive in a car that the brakes don't work and you don't want me out on the road with one like that or that the tires are wore out. So, so they, they check for that and of course it's gone now. So I think that's a good thing.

Yeah, I think stance was. It's good to get rid of it.

Yep. Okay.

Yeah. You know, and it seems like years ago there was a real need for safety inspections. I don't think it's as, as much anymore, but I could go either way on that bill.

I would love for them to bring it back in my state, to be honest with you. All my cars met the safety inspection standard, regardless. Now the problem is all my trade ins are just blown out. You know, nobody's making them put ball joints on it. They ain't gonna do it.

So.

So, John, double edged sword.

Yeah, the, the last, the last one we have here is the Thompson bill. Can you explain that to us a little bit? And, and I really like what y' all did here. It's really nice.

Sure. Yeah. Ed Thompson, of course. Who's been a great, you know, friend of the industry. And, you know, personally, Ed is representative. Thompson's just a super guy. He's a, you know, sports referee and just a, you know, top shelf person. Has done a number of things for Tiada over the years. This year we actually went to him with this particular bill and said, hey, art dealers are owning, you know, they have cars. They have cars that have loans on them, debt that's outstanding. They get in an accident, the insurance company will write a check to the person that, you know that is registered as the owner of the car and not include our dealers on that check. So if the person goes and cashes the check and decides not to put that money into the car, but say, maybe go buy a new car from somebody else, our dealers are stuck with a car that's not worth much, that has a lot of damage. And in the past, we were able to sue that insurance company, but only up for the amount of the check. And then the fees for the suit and the court costs and associated fees we could not get back. And so in a lot of cases, if you're trying to get $2,000, it's going to cost you $2,000 to fight it. It you don't bother doing it, or even a thousand, you don't know if you're going to win, you don't do it. Now we can actually get the amount of the check plus the fees that are used. And everybody thought that was a good idea. Ed did a great job on it and, you know, it's just, just the right thing to do. The insurance companies, all they have to do is include a check. They didn't want to bother doing that.

They just got a check.

That's, it's, it's that. That goes on in every state. And I love this. Yeah, I love this. It's, it's so easy for the insurance company to do this way. It puts a little bite into it. If they don't do it this way. You know what? We're coming to the end here. And it's the best thing to talk about because I. I've been to the Tiada Convention conference the last two years. I will not be able to make it this year. I'm very sad. But y' all do a wonderful job, John. And you know, what's going on. What's different this year? I know it's a different spot compared to last year's. Just talk a little bit about that. Let's get more dealers there. Y' all need to come See this.

Thing.

It'S a really great conference. We have folks that are there from regulatory industry or regulatory agencies so dealers can talk to them if they want. The thing I want to do is take a step back and say it's at the JW Marriott Resort and Spa outside of San Antonio. Beautiful place. They've got the lazy river, the swimming pool, the golf course. Just a lot of neat things to do. Of course, San Antonio is not that far away if you want to go down to the Riverwalk. Just a, again, a top shelf event. Great classes, great education sessions, top speakers there an expo that is just unreal. As I mentioned earlier, it was sold out several months ago. We'll have the latest technology, finance, whatever it takes to run your business, the folks that'll be there to talk about it. And it's a neat way to get back and meet everybody that you've maybe haven't seen since the last convention and meet new friends, talk to people, run things by them. So it's just, and it's in a kind of a fun atmosphere.

Yeah, and this is Good. This happens July 22nd. We haven't mentioned the date yet, so this is very time sensitive, guys. If you're listening to this podcast, you've only got a couple of days to jump on, scramble, get your tickets, book a hotel. If you can't get into the jw, there's a ton of other options in the area, so don't let that deter you. And, and even if you're not a Texas dealer, you could still come to this. And you learn a lot. The times I'm attended, I mean, it's not Texas specific, it's industry specific. So you learn regardless of where you're at.

Yeah, we.

There's always been probably 20 different states represented. It seems like, Jeff, when we've gone and it's so great now I see that you're having an emphasis on the, on the Texas pack we talked about out earlier. Please explain to people why it's important for these people for dealers to, you know, contribute to the package back.

Sure. Well, first off, what we do is we have a neat auction there, a really fun auction. We have fishing trips, hunting trips, a day at the spa. You know, if the two of you want to get together and go have a good spa time.

Always do.

We always, you know, you could bid on that package. But you know, seriously, just a lot of fun things going on there. And what we do is again, we use that money to get to give to the folks that are friendly to our industry. That are good to us, that understand our industry and we want to keep in office. It's, again, having been a legislator for over 12 years, it is expensive to stay in office, and it takes a lot of money. And not only do we have to do advertising, but when, you know, there's a table at the local event in town that they want somebody to buy, they come to us. If they're having some type of an organization that wants money or donation, they come to us, the legislative officials. And so we have to get money to do those sorts of activities, plus let people know what's going on, communicate with the constituents. And that money that we raise for those auctions, it's all tracked by the state, goes into our pac, into pac, and then we write checks to the legislators. And of course, that money is recorded on the TEC website. So it's just another way to help us get in front and keep folks that, you know, are friendly and understand our industry in office.

Yeah.

If.

If you are not. If you're a Texas dealer and you're not signed up, go to the Tiada website. Sign up immediately.

Go.

Even if you just go for a day, I promise you, you will get every bit of money's worth out of it. Right, Jeff?

Stuff.

Yeah, absolutely. And, John, Texas is in good hands with you, I can tell. It's been so great to meet you. Fun to see you at convention a couple of weeks ago down in Vegas, too. And thank you so much for your time. Hopefully everyone listening has learned a lot from this and gotten a little more motivated to be involved. You know, get out there, get. Of course, it's. It's not even like you have to tell Texas dealers that. Right? I mean, you guys have got the strongest association, the most involved dealers. It's awesome.

Yep.

Well, it pays dividends. It just. It's kind of synergistic and people get together and, you know, our board is just super. I can't say enough good things about our board. They can't. You know, they will do just tons of things to make sure the organization works and is effective. And so it's just a fun group of guys to be with. And, you know, we have day passes available or for the whole time. Plus you'll have a super time. I mean, just a fun place to be.

I think that says enough, Jeff.

Awesome, John, thanks so much.

Thank you. Thanks for joining us today. Be sure to subscribe to the podcast and share it with a friend, the independent dealer podcast, Dealers helping dealers.