Bret Keisling is joined by TVF CEO Chris Fredericks, who shares its origins and path to becoming a highly successful 100% ESOP, and its culture of employee ownership.
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Mini-cast 121 Transcript
Bret Keisling: 00:06 Welcome to the ESOP Mini-cast. Thank you so much for listening. My name is Bret Keisling and as it says on my business cards, I'm a passionate advocate for employee ownership. Next Tuesday, on our primary EO/ESOP podcast, our guest will be Chris Fredricks. Chris and I discuss several cool and important topics. As you'll hear, Chris is the CEO of 100% ESOP TVF, formerly known as Top Value Fabrics.
Bret Keisling: 00:34 As a result of that company's success, they created Empowered Ventures, a holding company with a focus on creating and maintaining employee ownership through acquisitions. In the full episode, Chris and I spend a lot of time talking about Empowered Ventures. Because all of that is built upon the great work of TVF, I'm sharing this excerpt to thank, celebrate, and bring to your attention, the great employee owners at TVF.
Bret Keisling: 01:01 At the end of this episode, I'm going to share a discount code that will save you $25 on NCEO's virtual annual conference that takes place in April, 2021; but first enjoy this excerpt.
Bret Keisling: 01:15 I'm joined on the podcast today by Chris Fredericks who is the CEO of TVF, formerly known as Top Value Fabrics, and also the CEO of Empowered Ventures, which is an exciting new acquisition company. Chris, how are you today?
Chris Fredericks: 01:32 I'm great. Thank you so much for having me on the podcast, Bret.
Bret Keisling: 01:35 So TVF has a really cool story. We're going to include links to your website on our show notes. Can you just give us a thumbnail of the history?
Chris Fredericks: 01:44 Yeah, so it's a, it was a company started in 1974 by two guys, both named Dick, Dick Hanzel and Dick Leventhal. They had been working for a textile supplier in Indianapolis at the time, a family owned company, but they were not family and, but they both had aspirations to be owners and leaders, you know, take on more leadership at that company. It became apparent that the son of the owner was not going to be open to that. So Dick and Dick chose to basically go start a company on their own and the way they did that is the classic kind of out of your garage story. They literally went and put a card table in one of their garages. They put two phones on it and they bought a bale of canvas, a giant bale of canvas, and they started selling it.
Chris Fredericks: 02:39 So that was kind of the start of TVF and they did a great job and, you know, over the course of, probably about, well, up until 2000, they worked together. They hired, they grew, and they built a nice business together.
Bret Keisling: 02:56 You have so many cool products. We could the whole time just, I went to your print media site, their banner flags, indoor, I mean just amazing stuff, but why don't you describe the products, what you folks do?
Chris Fredericks: 03:09 Yeah, we sell a lot of different types of fabrics for a lot of different end uses. Really thousands, honestly, of SKUs, you know, in terms of styles and colors. We're probably one of the most diverse fabric suppliers in the country, if not the world! So we sell a lot of industrial heavier duty fabrics for things like luggage and outdoor gear. That's a big chunk of our product line, but we also sell a lot of athletic apparel fabrics. So this would be performance polyesters and things that would be similar to Nike or Under Armour fabrics. And then we sell a lot of other things too, like the signage fabrics that you're referring to. So a lot of printable textiles for home decor, signage, and then another, a whole other group for things like truck tarps and more really industrial fabrics. So we have a very wide gamut in terms of the product line that we sell.
Bret Keisling: 04:13 Your two founders started together in '74 when you came on board and I'm sorry, did you say '04?
Chris Fredericks: 04:19 That would have been '05.
Bret Keisling: 04:20 '05. About how many employees were there and how many are there now? Take us a little bit through the growth in terms of the people.
Chris Fredericks: 04:27 So, yeah, we were around 45 or so employees when, when I started.
Bret Keisling: 04:30 Excellent. And where are you now?
Chris Fredericks: 04:32 We're probably about mid-70s, 74, 75-ish. Yeah. We've got some long-standing VPs that just are tremendous experts in the industry. I've got a really strong CFO right-hand person. And we've got numerous other really strong leaders and managers who've come up over the years. So yeah, I'm super fortunate with the team that we have.
Bret Keisling: 04:59 Tell me about the cultural vibe of employee ownership.
Chris Fredericks: 05:02 I think we've had an experience that mirrors what I've heard from a lot of other ESOPs and in a very good way. You know, that first meeting, maybe some question marks, some -- a little bit of like confusion, because it's just so new and not something most people know about. And you know, the first year or two, the share price doesn't blow anybody's minds or anything because it's just, you're growing from zero...
Bret Keisling: 05:28 ...and they're not vested.
Chris Fredericks: 05:28 Exactly. But we, you know, we really, I think we had really good advisors, not just in terms of legal and structure and all that, but like advisors who have been through all this and seeing how to communicate early on and set the right foundation. So we were careful to make sure we educate a lot about how an ESOP really works, what it means.
Chris Fredericks: 05:53 It's not a lottery ticket, but it really is a big deal for the long term. And so we set a pretty good foundation at the beginning, our team that really got excited within a couple years because we also embraced change, you know, in terms of just making the business better for them and reflecting ownership as a mindset. So our team fully embraced it and now we've had a few retirements and some good-sized checks and yeah, we have the annual statement party, like a lot of companies do. And there's a lot of excitement about trying to guess the share price. So yeah, I'm personally this, I just find it very rewarding that our team, which is, you know, a lot of great people, are benefiting from what we're doing. So it's pretty, it's pretty awesome.
Bret Keisling: 06:41 I hope you'll check out the full episode with Chris Fredericks available next Tuesday, wherever you get your podcasts. And remember all of our archives, going back to September, 2017, are available on our website at www.ESOPpodcast.com.
Bret Keisling: 06:57 As I mentioned at the top of the episode NCEO's virtual annual conference will be held April 20th to 21st, 2021 and there's a pre-conference on April 16th last week on Mini-cast Episode 120 Ivette Torres told us all about the conference. I hope you'll check out that episode. I'm registered for the conference and I hope you will too. When you register online, use the discount code EOPODCAST25, and you'll save $25 on your registration.
Bret Keisling: 07:27 Thank you so much for joining me today, our country and all of us are going through a lot together right now. And that's how we'll get through it, together, which is in the best spirit of employee ownership. This is Bret Keisling; be well.
Bitsy McCann: 07:46 We'd love to hear from you! To contact us, find us on Facebook at KEISOP, LLC and on Twitter @ESOPPodcast. To reach Bret, with one "T", email Bret@KEISOP.com, on LinkedIn at Bret Keisling, and most actively on Twitter at @EO_Bret. Again, that's one "T". This podcast has been produced by The KEISOP Group, technical assistance provided by Third Circle, Inc. and BitsyPlus Design. Original music composed by Max Keisling, archival podcast material edited and produced by Brian Keisling, and I'm Bitsy McCann.
Standard Disclaimer: The views expressed herein are my own and don't represent those of my own firms or the organizations to which I belong. Nothing in the podcast should be construed as guidance or advice of any kind in any field and the fact that I mentioned an organizational website or an advocate or a company on a podcast does not reflect an endorsement, but if you've heard your name or your group's name mentioned on this podcast, I'd love to have you come on and talk about it yourself.
A note on the transcript: This transcript was produced by Temi, an automated transcription service. While it has been reviewed by The ESOP Podcast, we can not guarantee the accuracy of the transcription. Please refer to the original audio when citing sources.