By Fran Duskiewicz
Every day, the trade journals’ e-news announce more privately-owned, mid-sized convenience store chains being purchased by one of the large, growth-oriented industry giants.
Always, the acquirers are the news. Take for instance the recent announcement of the proposed acquisition of Tedeschi Food Shops.
It makes sense. Companies like 7-Eleven are growing and provide a real story to tell, but I submit that their story is relatively bloodless—a compilation of strategy, opportunity, geography and, in some cases, their own survival and viability. If the EBITDA multiples are right and the properties are clean, the decision to buy is easy and emotionless.
What about those on the selling side? That’s another story, and one that can be very emotional.
Almost all great privately-owned companies in our industry are regional, serving geographical areas linked by proximity to the company’s hometown and its environs. These companies might have been built by great entrepreneurs or they might be multi-generational, having served their communities for many years.
In any case, they are usually well known and a possible source of local pride for having invested in many small towns and neighborhoods overlooked by national chains. The emotional link between these companies and their customers runs deep. Loyalties run both ways.
And when it comes to the employees who helped build a company from nothing? That emotional connection is off the charts.
So many great entrepreneurs had to start with nothing and attract great people to help them with not much more than their own charisma, a vision of what was possible, and an opportunity to grow and succeed. Any sale that puts these people’s jobs at risk is a bitter pill, and if you live in the same community as they do, it’s even worse.
John MacDougall had many opportunities to sell Nice N Easy Grocery Shoppes over the last 10 years. He had turned 60 and wanted more time away to enjoy himself. The offers were terrific, but John could never make that decision to say “yes” and sign the papers.
We investigated ESOPs, private equity, internal financing. Nothing worked. The simple fact was that it was not within his heart to sell and walk away. He was Nice N Easy, and Nice N Easy was John MacDougall. I would wager he was not alone in that regard within our industry.
We send our customers off to work with their coffee and breakfast. We feed them lunches, snacks and, sometimes, dinner. We provide drinks when they’re thirsty and sell them beer for weekend fun. We employ their children and help with their educations. We are on the lists of every local organization in our towns and we sponsor just about everything.
HEART OF THE COMMUNITY
We could not go anywhere with John without people coming up to us, thanking John for sponsoring their little league, a concert they enjoyed, their favorite DIRT driver, or simply for building a store in a town with 300 inhabitants. Maybe they just liked his TV commercials or wanted to tell him about a favorite employee. He belonged to the community and he took that seriously. I don’t think he could imagine life in our area without that.
Is there ego involved here? Sure there is, and there’s nothing wrong with that. When you build a company, it becomes the living embodiment of your personality, your priorities and your identity. It’s tough to put a price tag on that. It’s tougher to walk away.
Ultimately, John’s hand was forced by failing health, but he still held on until he finished his quixotic quest to build the “perfect store” and received all the accolades that came with that achievement. Even then, he made sure that any sale would protect his people and his legacy. We believe we did that for him and that we made a very good decision.
So, when a newsflash pops up that MegaStores Inc. just purchased a 20-store chain in Pocatello, Idaho, for example, remember that there is probably a former owner there who feels as if he just sold one of his children. That story probably won’t garner big headlines, but there’s plenty there, if you read between the lines.