Up In Your Business is a Radio Show by FlagandBanner.com
EPISODE 152
[INTRODUCTION]
[00:00:08] GM: Welcome to Up in Your Business with Kerry McCoy, a production of flagandbanner.com. Through storytelling and conversational interviews, this weekly radio show and podcast offers listeners and insider’s view into starting and running a business, the ups and downs of risk-taking and the commonalities of successful people. Connect with Kerry through her candid, often funny and informative weekly blog. There, you’ll read, learn and may comment about her life as a 21st century wife, mother, daughter and entrepreneur.
Now it’s time for Kerry McCoy to get all up in your business.
[INTERVIEW]
[00:00:44] KM: Thank you, son, Gray. This show, Up in Your Business with Kerry McCoy began as a calling. After four decades of running a small business, I felt I had something to share. I wanted to create a platform for not just me, but for other business owners and successful people to pay forward their experiential knowledge in a conversational way.
Originally, my team and I thought it would be easy. It would take about an hour or two a week, but we were wrong. This hour a week has turned into much, much more. As with every endeavor, every new endeavor, it’s harder than you first thing. Once again, I find myself on the onset of starting and running yet another new business, this podcast, and doing exactly what this show is about, creating a new business, taking risks and working hard. Podcasts are the new business. After interviewing over 100 successful people, I’ve noticed some reoccurring traits among many of my guests, belief in a higher power, the heart of a teacher, creativity, because business is creative.
Before we start, I want to let you know if you miss any part of today’s show or want to hear it again or share it. There’s a way, and Gray will tell you how.
[00:01:54] GM: Listen to all UIYB past and present interviews by going to flagandbanner.com and clicking on radio show, or subscribe to our podcast wherever you like to listen by searching Up in Your Business, with Kerry McCoy. Also, you may simply like flagandbanner.com’s Facebook page to watch our live stream and receive timely notifications of upcoming guests.
Back to you, Kerry.
[00:02:16] KM: Thank you, Gray. If you’ve visited Arkansas or live in Arkansas, then there is a good chance that you have patronized one of my guest establishments. Mr. Frank Fletcher Jr., owns restaurants, steakhouses, car lots, Wyndham Riverfront Hotel, Fletcher Realty and Fletcher Fur. But the first company he founded that he cut his teeth on was Cheyenne/Silverwood Industries.
This little startup that Fletcher founded in his garage grew to become the largest lamp company in the United States. He expanded its manufacturing to Taiwan and mainland China and grew this business to over 100 million in annual sales before selling the company in December of 2010.
In preparation for this interview, I began writing a paragraph that just grew too long. So paint a quick picture or a quicker picture of how interesting this man is, I just made some bullet points, and they are; he was adopted. He grew up on a farm in Tamo, Arkansas with a population of five. He married his high school sweetheart. At the age of 14, he was 6 feet, 4 inches tall. Frank is a graduate of the University of Arkansas in Fayetteville and a fraternity brother of Dallas Cowboy owner, Jerry Jones.
After college, he joined the army. After the army, he supplemented his income where he was working at Worthen Bank by working at Shakey’s Pizza Parlor. That’s going to bring up a lot of memories for people. He met Mr. Sam Walton at Walmart II in Harisson, Arkansas, and he owns race horses all with some variation of the name Rocket for his once beloved dog, Rocket.
It’s not every day you get the opportunity to sit down with a self-made millionaire and hear how it all unfolded. It is a pleasure to welcome to the table the tall, hard-working, intuitive businessman and philanthropist, Mr. Frank Fletcher.
[00:04:14] FF: Hello! Thanks. I’m glad to be here.
[00:04:16] KM: We’ve had a great time talking before the show.
[00:04:18] FF: Yes, we have.
[00:04:20] KM: Tamo Arkansas, I did not ask you about this before the show. Population, five. Is that true?
[00:04:25] FF: One of my grandmother was there. Yeah, we had a water tank, a cotton gin and what we call a general store. We were farmers and I worked in the cotton gin, drove tractors, and that was how that I was able to graduate. My father said, “Your mom and I –” neither one of them went to school, “So you’re the only child. You’re going to go to college. If you make a C, you will be back here in this cotton gin the rest of your life.” So they forced me to study some school. So it was a little bit how I figured that I got out of school in four years. Not being smart, but I didn’t want to go back to Tamo.
[00:05:04] KM: Tamo, is that how you say it?
[00:05:05] FF: Yeah. Tamo is still – You go to Florida, everybody drives by Tamo. You see the water tower. It’s about 25 miles south of Pine Bluff on the way to Grady. You’re going down to Grady, [inaudible 00:05:19] Lake Village, you go right by Tamo.
[00:05:22] KM: Who put up the water tower?
[00:05:24] FF: I don’t know. It was there when I first remember it, but it has been there a longtime. There was just a lot of people that were in the farming business, but my parents moved there in the early 50s, I guess. I remember growing up and riding horses and just I went to Grady until I was 10th grade, and they asked me to come play basketball in Pine Bluff. That was an opportunity for me to get a car carry. So I never was a star in Pine Bluff, but at Grady, I was all state every year because I was a lot taller, and it was no talent, just tall.
[00:06:04] KM: That’s good. You could just set the basketball into the net.
[00:06:07] FF: Yeah. I could get it in there.
[00:06:10] KM: What age were you adopted?
[00:06:12] FF: I was adopted when I was two, three weeks old. Back in that time I understand you just went to the doctor and kind of show them your driver’s license and ask of any baby. So it wasn’t a long process like it is today. So, I’ve been asked many times, “Have you ever tried to find your real parents?” The answer is no, because the people that adopted were my parents and I had a wonderful, wonderful life. So that was never a concern, but I do like to talk – When I’m asked about being adopted, because there are many kids that are adopted that really are afraid to talk about it or think that they’re different or something, and I always say, “Man, you’re lucky.”
[00:06:50] KM: Yeah. That’s right. When I read that you’re adopted, the first thing I thought was, “Have you contacted your parents?” Then I thought, “Boy! That could open up a can of worms.” Because I have had friends find their parents for health reasons. They want to know their genetics, health reasons. So I bet if you found your parents and they found out that you were a self-made millionaire they would be like, “Oh! Darn! I can’t believe I gave that baby away.”
[00:07:17] FF: Well, I always tell my friends when we’re laughing. I go, “I know my dad worked in New Orleans as a hawker out in front of the strip clubs, because I’m a pretty loud and always –”
[00:07:27] KM: Oh! I thought you were going to say because I like to go to strip clubs.
[00:07:30] FF: No! I always say, “Come on in, buy something.” So I figured that has something to do with my DNA.
[00:07:36] KM: Yeah, you are a salesman from day one. You got your degree from the University of Arkansas in business and you pledged –
[00:07:49] FF: I pledged Kappa Sig and had some great, great friends that they’re still around, and Jerry Jones and I were friends. I’ve been looking up to maintain that friendship and get to go on a lot of trips with him in NFL locker rooms and special places because of his kindness. So that’s been an extra treat. But I just have so many friends.
This guy here in town named Charlie Whiteside. He was from Fort Smith and I’m from Tamo and he said, “Buddy, what are you doing in school?” I had no idea. He said, “Well, the first thing we’re going to do is burn all your clothes, because my mother has sent me with a black and white shoes, a black and white belt and some really corny clothes.” So the fraternity burned all my clothes on my arrival and then they took me downtown and bought all new clothes.
[00:08:40] KM: What were you supposed to have? Blue jeans or something?
[00:08:41] FF: Oh, I don’t know. I think she went to Pfeiffer’s and thought she was dressing me up. I must have looked pretty funny, because they had a bonfire, and we’ve laughed about that ever since. Charlie went to work for Meryl Lynch and kind of took care of whatever money I made. So he’s been a great friend and he’s still here in Little Rock.
[00:09:01] KM: That’s probably why you are so such great alumni to the University of Arkansas. I read a lot about how you really love the University of Arkansas and have done a lot to support them.
[00:09:12] FF: It’s one of the great things that happened to me and I got a chance a few years ago with Jerry. Jerry contributed a little money and I said – They said, the university people said, “Frank, what would you do different if you were going to school.” I went, “Well, I really didn’t learn anything about real business when I was there.” So we got together and started a class for students called SAKE, students acquiring knowledge through enterprise.
We’ve been doing it about, I don’t know, 8 or 9 years now. The SAKE class actually runs, gets credit and tons of people want to sign up for it and they run a business where they sell stuff on the internet, take credit cards, take returns. So they’re actually operating a profit for business and they’re able to get all the alumni names that most people couldn’t get. So they sell merchandize on the internet and learn how the accounting process, but mainly the marketing process. So I would have given anything to take a class like that.
[00:10:11] KM: You mean they actually have products that they sell in the class?
[00:10:14] FF: They actually have products. I sent the first class over to China, and we had moved from Taiwan over into China. We had our own factories in mainland China. I sent the first class with some chaperones, and then we took them to factories over there, and they have come back and talk to all the other classes, those kids that have gone on, graduated, and we just kind of opened our eyes to what could be made overseas. So then we developed products, and we have some domestic products too.
[00:10:45] KM: So you developed products with that class that are being made in China and then there’s –
[00:10:47] FF: With that class and then they sell through alumni.
[00:10:50] KM: Oh my gosh!
[00:10:51] FF: For instance, like the sidewalk has all the graduates on it. So they sell a picture of Old Main and then your name and script it on full in a beautiful four-inch frame. It’s one of their number one seller.
[00:11:05] KM: I guess so.
[00:11:06] FF: They custom make it for everyone that order from them.
[00:11:08] KM: Who’s idea was that?
[00:11:09] FF: Well, it’s just –
[00:11:10] KM: Yours?
[00:11:11] FF: A little bit. I do.
[00:11:13] KM: Oh! He’s grinning, if everybody can’t see. It’s your idea.
[00:11:16] FF: That’s been one of my real pleasure, is to help the school a little bit.
[00:11:21] KM: That’s a real money maker I bet.
[00:11:24] FF: Well, I wanted to – Each time they ask me what else can you do for us? I go, “You keep expanding this class and I’ll figure out a way to do more. It’s about 400 people applying. Only 32 get in.
[00:11:40] KM: Wow!
[00:11:41] FF: So a lot of kids want to be in that class.
[00:11:42] KM: That’s less than 10%.
[00:11:44] FF: Yeah. They need to have more teachers. It’s just something different than books.
[00:11:50] KM: People don’t realize – We talk about this right at the intro. How creative businesses, and you just told the most creative, great business story about why people love business. Why people they’re in business like you. Love it because of the creativity of it.
[00:12:03] FF: They need some experience in college. They don’t need to wait till they go down on their first interview. Because I went to work for Worthen Bank, because I couldn’t find a job and I only worked there – I walked down the unemployment bureau and said, “Can you find me a job?” They found me a job with DuPont.
So my first call at 22-years-old, I called on a guy named Sam Walton. I always say, adoption, number one. Meeting Sam Walton, number two. Sam Walton, number two. When I was a very young person, he was my first call I made. This is a good story. I walked in to see him. Of course right there in the store. He said, “Who are you? What do you have?” I said, “I’ve got loose sight paint.” He said, “Oh my goodness. We’d love to have a brand name.” I said, “Well, I like to sell you 300 gallons.” He said, “How much is it?” “I said, “$1,500.” He said, “No. I’m not paying $1,500.”
So we talked a little bit and he said, “Come on, go to the –” I think it’s the Lion’s Club. So he takes me as a young kid and I guess he was 38 or 40. So we go to this luncheon. He’s passing yellow pass back and forth to me and he goes, “I don’t want 300 gallons. I want 50 gallons.” I said, “I’ll lose the only other customer DuPont has in Harrison if you buy it.”
Anyway, after much arguing, I went to a payphone, because we didn’t have mobile phones then. I got him 120 days dating and I pushed it across the table on the yellow pad and he said, “What does that mean?” I said, “It means you don’t have to pay for it for four months.” So finally got an order.
[00:13:33] KM: $1,500?
[00:13:33] FF: $1,500.
[00:13:35] KM: Spaced out over four months.
[00:13:37] FF: Yeah. He didn’t have to pay for it. So, sold. People don’t realize that Walmart was begging for merchandise in those days. The factories, he sent me. Anyway, to make a long story short, after about six months he said, “I want you to quit DuPont and I want you to become a manufacturer’s rep.” I said, “I don’t know what that is.” He said, “Well, you go to work on a commission and just go ask people to sell their products.” I said, “Where do I go?” He said, “Chicago.” I said, “How do I get there?” “ He said, “You get on a train to Memphis , it stops in St. Louis.” So I got off in Chicago, but he forgot to tell me to wear a coat, and it was about 30 below on the lake. So my contacts stuck to my eyeballs and I knew I was in Chicago.
So I went to a place called a Navy Pier, which had all the merchandize. It’s a famous tourist place now. It used to be a merchandizing mart. I walked up to everybody and said, “I’m Frank Fletcher. I’d like to represent your company,” and I came home with about 50 companies of junk.
Anyway, I started calling on all the Walmart stores. You sold each store individually. By that time, you’d open 15 or 20. So that was the start of my –
[00:14:43] KM: Wait. He hired you away from DuPont.
[00:14:46] FF: He hired me away from DuPont.
[00:14:47] KM: He prowled me away from DuPont.
[00:14:49] FF: I left my $600 salary, which I was very proud of.
[00:14:52] KM: That’s right.
[00:14:53] FF: Now, I wasn’t working for Walmart. I was working for a company.
[00:14:55] KM: $600 a month. Let’s just say that was $600 a month.
[00:14:56] FF: Yeah, $600 a month. So I went to work for companies that paid me a commission only if I sold something. So no salary.
[00:15:03] KM: I got you. I thought you said when he hired you away, you became a sales rep for –
[00:15:10] FF: No, not for Walmart. I was a – What they call, a manufacturer’s rep, which means we represented different companies. If you had a company and I was selling your flags, you’d pay me a commission if I sold one. If I didn’t sell anything, I was of no cost to you.
[00:15:25] KM: You’re kind of like a buyer for him.
[00:15:27] FF: No, not really. I was just one of many, many salesman calling on Walmart selling products, except that I didn’t work for one company. I worked for multiple companies.
[00:15:37] KM: Did you get to keep your DuPont job?
[00:15:39] FF: No.
[00:15:39] KM: You had to completely give up you $600.
[00:15:41] FF: I had to give up my job.
[00:15:42] KM: You had to take this big risk of going out.
[00:15:44] FF: Yeah, that was the first big risk.
[00:15:47] KM: There are not manufacturer reps like that anymore.
[00:15:49] FF: Well, there are a few of them, but not many. But it’s a commission job. I always love commission. Today, everyone who works for me, I pay very low salaries and high commissions. Because I think that if you can reach for the stars, no one needs to put a cap on what you can make.
So, even like people that are managers at my restaurant, for instance, we give them goals ahead. If they get those goals, they keep making more and more bonuses. So you know what? They don’t close at 10:00 when the door says 10:00. They stay open till 11:00. But I’ve always believed in never telling someone, “This is your salary and this is all you can make.” I always say, “Make as much as you want, as hard as you want to work.” It’s always been good for me.
Then Mr. Walton fired me when I was about 28. He called me and he said, “Frank, come to my office.” I said, “Sir, what’s wrong?” He said, “There’s nothing wrong with you. We’re going to get rid of all the manufacturer’s reps.”
[00:16:47] KM: But you didn’t work for him.
[00:16:48] FF: No, but when he said fire me, that is kind of confusing. He said, “You’re no longer going to have a job. Walmart is going to contact all the companies that you and all the other people represent and we’re going to tell those companies we want them to give us your commission.
In other words, if I was selling you to it for a dollar, he would get them to sell it to him for 95 cents, and Frank would lose that. I said, “Well, Mr. Walton, I got two kids and a wife and I’ve been working for a long time for you. It’s your stores.” He said, “You got paid for every day, son. He was really nice.” I said, “I’m thinking about a suicide. He said, “Well, go out in the front lobby. Don’t do it here in my office.” I said, “That’s not really funny.”
Anyway, he said go home and rent a garage and make something. I’ll try to buy it from you. I said, “Mr. Walton, I could barely turn the key in my car. I’m not very inclined.” So, I did. I went home and rented a garage, and that’s the birth of Cheyenne, which was a lamp company. We didn’t make anything. We just assembled parts. We’ve bought parts, and we actually made shades. So you know something about sewing. We bought sewing machines and we sewed our own shades, but we bought all the parts from all over and we assembled them.
So we started and Mr. Walton bought the lamps. When other people would leave Walmart and go to Target, I’d follow them to Target. When they went to Kmart, I followed them there. When they went to Lowe’s or Home Depot, I followed people that left Walmart all over the United States. So I broadened my territory from Arkansas to the U.S.A.
[00:18:22] KM: So it sounds like when Sam Walton pulled the rug out from under you, that, he also funded your venture. He said he would buy from you, but I think maybe he bought parts for you too.
[00:18:38] FF: He just told me if I made something good and for the right price, he would buy. I knew what the right price was. But he did help us by buying that merchandise.
[00:18:49] KM: Why did you pick – How did you pick?
[00:18:50] FF: Well, I was one of the companies. That’s a good question. One of the companies I represented was a company called Jimco Lamps in Jonesboro. So I knew about lamps and I had sold them for a long, long time. So I really had a big business with that company. I actually went to the owner of that company and asked him if I could make some different kind product that he made. He agreed. Anyway, that’s why I started in the lamp business.
[00:19:19] KM: He agreed. So he supplied you parts?
[00:19:21] FF: He agreed, and I kept selling his product for a while, and I made different kinds of lamps. But eventually my business started growing good. So, I had to resign from his business. But I had sold Mr. Walton so many different products over the period, years. One of the funny things was that I taught myself how to make up ads.
Back in these days, we’re talking a long time ago, Walmart was advertising in newspapers. So I went to a newspaper and said, “Teach me how to layout an ad,” and they said, “Okay. If you look at a newspaper, a customer reads from the top left. So whenever you put an ad in – So if you open up a newspaper like he said, you want your products on the top left.
[00:20:06] KM: I always thought it was the top right.
[00:20:07] FF: No, it’s the top left.
[00:20:08] KM: Oh, darn!
[00:20:09] FF: I would learn how to cut and paste all the products that I had. I would make up an ad and put Walmart logo on top. I would cut all my products and put them in the top and then I would put other products that Walmart had and I would hand the manager a makeup of an ad. They loved it because they didn’t have to do it. Guess what? My stuff was always on the top.
I’ll tell you one funny story of Mr. Walton in pricing. When I first sold him paint, he said, “Okay. I didn’t want to buy that much, but how much the loose sight paint cost?” I said, “It costs $3.70.” He said, “What are we going to sell it for?” I said, “3.97.” He looked at me like I was crazy. He said, “Son, we can’t make any money.” I said, “Mr. Sam, please. Let me ask you about your toothpaste. What do you sell your toothpaste for?” He said, “What’s that got to do with paint?” I said, “You sell your toothpaste for less then you pay for. You know why? Because you want to drive everybody and mediate. Then they buy all kinds of other stuff. I’m going to make your paint department famous and then they’re going to buy paintbrush, pan and roller sets and you’re going to have the best paint department in the world.
[00:21:18] KM: Loss leader.
[00:21:18] FF: He went, “Okay.” So one of the stories in sales is the least of match you can sell your product for the, the faster the sale. In other words, instead of – If it’s 3.97, it’s going to sell a lot faster than it was 5.97.
[00:21:34] KM: But I’ve known people to make prices so low they run themselves out of business.
[00:21:37] FF: Well, he wasn’t going to run himself out of business. All I was doing was learning from what he had done when he started was to help mediate for his first big loss leader. So I would just work – I would always try to get him to promote my products.
I’ll tell you a funny story about Mr. Walton. I mean, I could just write a book. He called me one morning, about 6:30 and I woke up and he said, “What are you doing?” I said, “I’m asleep. Who is this?” He said, “It’s Sam Walton,” and it scared me. I said, “Where are you, Mr. Walton?” He said, “I’m at Dothan, Alabama.” I said, “Sir, the stores are not open at –” He said, “I got a key in the guard.” He said, “Don’t ask me about where I am. I’m going to pick your item for my item for a year’s contest.”
So he picked an item and he told me and I just got real quiet. He said, “What’s wrong?” I said, “How do I tell you, sir, that’s the wrong item.” He said, “How could it be the wrong item? I picked it.” I said, “Well, you saw it in Sam’s wholesale, and they work on a 10% markup. You’re going to put it in Walmart. I work on 35% markup. Once we go past the Sam’s retail, it’s not going to sell me against the dollars that you want it to.” He said, “Okay. Pick out another item.” So I got to choose an item. Anyway, we just had a lot –
[00:22:54] KM: That was long after you had started your business, because Sam’s Club.
[00:22:59] FF: Yeah, this is many years later. But just to have interaction with him. He would just so much detail. He asked me to meet him at a tennis one morning, 6:00 in Dallas, 6:00 AM, and he wanted me to talk to him about a promotion. He was constantly meeting with individual people. It’s just hard to think back then when you think of the corporation it is now.
[00:23:24] KM: Yeah, he was just always thinking.
[00:23:24] FF: He’s so detailed. Always, “How can we sell more? How can we sell more?”
[00:23:28] KM: Just in a close relationship with everybody it sounds like. So you pick Cheyenne/Silverstone Manufacturing. How did you come up with that name?
[00:23:35] FF: Well, Silver is actually Silverwood. We live on 808 Silverwood. So being a smart guy like I was, I looked at the signpost and said, “I need a name for a mirror company.” Cheyenne, I just always had a fascination about Indians. Anyway, that’s kind of crazy, but it’s how I picked that name. Yeah, I picked Silverwood, because I could see the sign.
[00:23:57] KM: So you put them together.
[00:23:58] FF: No. Well, one company came after the other. Silverwood was like the company where we made mirrors. We had an actual mirror machines long as a football field. You put glass on it. When it came out of the other end, 100 yards long, it was mirrors. So it was two different companies. The lamp first, and then the mirros.
[00:24:16] KM: How long did you do lamps? Before they were off –
[00:24:19] FF: Probably 5 or 10 years. I don’t know. A long time.
[00:24:21] KM: When did you add the mirrors?
[00:24:23] FF: Then the mirrors. Then we sold them all as one company when we –
[00:24:28] KM: How long did you work out of your garage in your home?
[00:24:31] FF: Oh, maybe a year. I still work today. I work my office in my home. I don’t have a garage anymore, but I still – Every morning, I go downstairs and I have five other people that join, my son being one. He’s in business for me and a car business and we have three other people that support us every day, just like your sons.
[00:24:50] KM: Yeah, just like my son is here.
[00:24:51] FF: So I don’t go to some big building. I go one fly down, and Rocket III. I have a third dog now. They all look alike, all German Shepherds. So Rocket III is sitting there by my desk waiting for the day to start.
[00:25:04] KM: You don’t feel like you need to get up and go to the office. I feel like I have to get up and go to the office.
[00:25:07] FF: I can wear shorts and whatever I want to downstairs. I don’t have to put on a tie to go down the stairs.
[00:25:13] KM: Do you have people come see you? Do you invite people over?
[00:25:15] FF: Yes, absolutely. Absolutely. It’s always been that way, so I guess I’m just comfortable.
[00:25:22] KM: You started that way, so you stayed that way.
[00:25:23] FF: So now we’re just – We’ve moved on. We’re only in the hotel and the restaurants, but the car business is our main deal. I got to tell you, what made me stop being in the lamp business for 30 – I don’t know how many years. 30 years. I don’t know how long I called on Walmart, forever.
One day I walked in and this new buyer said, “I don’t like anything you have. I’m going to show you some pictures in the magazine.” He was 25-years-old and she showed me pictures and I said, “That doesn’t sell in Walmart.” She said, “I’m the buyer and you’re the seller. Be quiet.” So I said, “Have you ever been to Poteau, Oklahoma?” She said, “What that got to do with this conversation?” I said, “Well, you can’t sell chrome in Poteau.” I said, “You can’t sell brass in Florida,” because of the salt water.
So she looked at me and she said, “You and I don’t get along very well. You’re going to sell me what I want.” So I did, but I wrote her a letter and I wrote the merchandise manager a letter and said, “I’m not standing behind these products. I do not believe in them. They’re not the right thing.” She bought them anyway.
Then she got fired and six months later another lady called me and said, “Hey, I don’t like these lamps we have.” I said, “You and I are going to get along beautifully.” She said, “Great.” She said, “I want you to take back the three million dollar.” I went up to Walmart and showed her the letter and the merchandize manager and the vice president supported me and I didn’t have to take them. That’s when I decided it was time for me to retire.
[00:26:47] KM: Was that hard to let go of your baby?
[00:26:48] FF: Yeah, but I realized that I passed my time. In the early days, what Mr. Walton always did, and the reason I come, nothing to do with myself, but for many, many people. Mr. Walton would say, and everybody he personally talk, “Ask the vendor what their best products are and ask them how we can sell more than I can purchase.” Very simple.
[00:27:12] KM: Very simple.
[00:27:12] FF: They moved past that.
[00:27:14] KM: Listening is a lost art form. People don’t listen anymore.
[00:27:21] FF: Absolutely.
[00:27:21] KM: They want to tell you what they like and what they want to do and they don’t listen, and I tell people all the time, “Listen to your customers. Your customers will tell you what they want. They’ll tell you what the trends are. They’ll tell you everything.”
So you decided to import. To me, that is the scariest thing in the world. How do you learn the business of importing and the language barriers and come to trust your foreign partners. How did you overcome all of that?
[00:27:47] FF: Well, I’m glad you asked me those questions, because for somebody who’s listening tonight, and I hope they’re thinking about importing, because it is a great business, but very dangerous. You summed it up perfectly.
So what I did and what I recommend to anyone else is to find a person who’s maybe educated in the United States, but at least speaks perfect English. Not only speak, but understands English. Because a lot of people will say yes to anything you ask them. But I met a young man who went to school in California, but he was a Taiwanese and he wanted to go back to Taiwan to marry.
So he said, “I was young,” and he was young. His name was Frank Wong. I said, “Frank, I want you to be my agent over there and I want you to find a factory for merchandize. I want you to inspect all of the merchandize for quality. I want you to put it on the containers.”
So he did everything. He was my right arm first in Taiwan, and then [inaudible 00:28:45] moved into China. So he made – I don’t want to stay in it, because – Anybody who’d listening to this program. You got to pay an agent, but you have to have an honest agent. I paid him 3% of everything that he’d put on the shield. But if something went wrong when he got over here, he would go back to the factory and make it right over there. So I can’t just call up and say, “I’m going to sue you in mainland China.” It’s very poor that no matter what you do, if someone asked you for certain pay scale, you got to pay your agent or your partner.
[00:29:20] KM: Yeah, pay them well.
[00:29:22] FF: I mean, I went to Asia maybe 35 times. But I was as lost as they would be if they came down to Tamo and want to look at the cotton gin. I mean, I didn’t know anything about it, except that I was just trying to judge my agent and I find him to be very credible. He would call us up and he’d say, “You’ve forgotten. We got a price reduction on an item.” Where he could have cheated me out of that money.” So he was a wonderful guy. He’s still alive. He moved back to Taiwan.
[00:29:52] KM: How did you meet this man?
[00:29:54] FF: Well, he was here in the United States. He just graduated school, and he was trying to learn the American culture and I ran into him. He was selling ceiling fans.
[00:30:06] KM: You met him through a Walmart connection I guess?
[00:30:08] FF: In between the time, but I got into the big lamp business. I had 26 ceiling fan stores. So this young man, Frank Wong, sold me ceiling fans that were made oversees. So once I met him, I knew he knew about China. I sold to ceiling fan stores and we started importing.
[00:30:24] KM: What were the name of your ceiling fan stores?
[00:30:26] FF: Well, they were called Factory First.
[00:30:28] KM: I bought one.
[00:30:28] FF: Okay. Well, the reason we call them Factory First, because our first store was over behind the Sheriff Department on Roosevelt. We’ve got to think of a name. We said, “We can’t call it Factory Second. So we’re going to call it Factory First.”
[00:30:43] KM: You have done everything. You just create businesses. How did you find that niche?
[00:30:48] FF: Well, I love laying in the bed and have the ceiling fan blowing on top of me. You remember a long time ago that people love fans in their house. I don’t know if they use them today. But we just started off. Then this is what happens to some business. We thought we’re the king of the ceiling fan business, and then Home Depot decided to get into the ceiling fan business, and they sold them for low costs. This is what we were talking about.
[00:31:13] KM: Loss leader.
[00:31:13] FF: Home Depot used it as a sales leader to bring people in.
[00:31:19] KM: To sell it to close the business.
[00:31:21] FF: I couldn’t compete with them.
[00:31:22] KM: You sell the business or close the business.
[00:31:24] FF: I sold off the retail stores that I had. I have some in Louisiana, Texarkana. I sold all the stores and just got out of the business.
[00:31:32] KM: So you got in the car business. How did that happen? That’s your favorite one, isn’t –
[00:31:37] FF: It’s my favorite story. One of my very best friends who’s passed on, knocked on my door one day, he came knocked on my door and he said, “Hey, I’m J.D. Wilson. Do you remember me?” He said, “I sold you some car for [inaudible 00:31:50].” I said, “J.D., I do remember you.” He said, “Well, I want to get a job driving a forklift.” I said, “J.D., you ever driven a forklift?” He said, “No.” I said, “What do you do?” He said, “I’m the greatest car salesman in the world.” I said, “Well, buddy, if you need a job, let’s get in the car business.”
So we bought an 80-foot mobile home and we rented some property next to Russell Chevrolet, and we opened up the first car business called Car Plaza U.S.A., which was the used car lot. So that’s how I started in 1989 and that was my first lot was a used car lot that J.D. Wilson taught me into.
[00:32:28] KM: So you had your Cheyenne/Silverstone Company you start in the 70s. Then you started Factory First.
[00:32:33] FF: Yeah.
[00:32:34] KM: Then you started a car business. Would that be the order?
[00:32:36] FF: I started in 1989. I was still in the lamp business at that point.
[00:32:41] KM: Yeah, you’re still in that.
[00:32:41] FF: Still in the lamp business.
[00:32:42] KM: That’s where you’re making money.
[00:32:43] FF: I didn’t know we were going to have one store in the car business. J.D. was a wonderful man. Then he said, “We need to get a new car business.” So went down to Lone Oak, Arkansas, probably a population of – I don’t know, 3,000 to 4,000. Great town. Bought a little Chevrolet store and learned about the new car business.
They phoned me from General Motors, from the financial and they said, “Mr. Fletcher, did you know that you’re losing $20,000 a month?” I said, “Am I losing that much?” They said, “Yes.” I said, “Do I owe you all anything?” They said, “No.” They said, “Would you mind coming over? We’d like to see you eyeball-to-eyeball.” So I go over to West Little Rock where their office was and they said, “Why are you staying in this business? You’re losing so much money?” I said, “I’m going to school.” They said, “What does that mean?” I said, “What if I bought a big store in Little Rock? I’d probably be losing 200,000 a month.” Anyway, I had to learn the new car business, because I didn’t know anything about it.
[00:33:41] KM: So you wanted to lose it where property was cheap in Lone Oak.
[00:33:44] FF: I want to lose the least amount I could lose. Anyway, it was like starting all over again. So I had learned everything –
[00:33:50] KM: How long before you moved to Little Rock?
[00:33:51] FF: First store was in Jacksonville and it was a Dodge store. So they didn’t have a Dodge store in North Little Rock. So I talked to them and I said, “Let me build a new store in North Little Rock. We’ll move the store from Jacksonville to North Little Rock.”
Anyway, that’s probably 1991. I got in a new car business. Since then –
[00:34:14] KM: How many? How many do you have?
[00:34:16] FF: 47 dealership, bought and sold. We have 12 different stores now, but we’ve had a lot of others stores in different states for one reason and another, that I’ve made a mistake, and I bought a store and sold it in six months. You want to hear that story?
[00:34:36] KM: Yes. Then we’re going to take a quick break. Yes, I want to hear that one first.
[00:34:39] FF: I bought a store in Memphis and I was really proud of it. It was in a good part of Memphis. So I called the media people and said, “I’d like to get a contract for radio and for TV.” They said, “Sir, we don’t need your business. Do you know about Tunica?” I said, “What” They said there’s 14 casinos down there and they’re taking up all our time, and goodbye.” So they didn’t really want to event talk to me. So the newspaper was ridiculous, the radio stations didn’t want to talk to me.
Then a guy walks in and he goes, “Do you know this is the bankruptcy capital of America?” I said, “Surely Detroit is.” They went, “No. Memphis is.”
[00:35:11] KM: Memphis is?
[00:35:11] FF: Memphis is.
[00:35:12] KM: It’s the bankrupt capital of America.
[00:35:14] FF: Of the United States.
[00:35:16] KM: Oh, wow! Okay. Go ahead.
[00:35:17] FF: Anyway. I thought it was time for us to leave Memphis. Couldn’t advertise, it was the bankruptcy capital. So I was just – We got out of the store for the same amount we paid for.
[00:35:26] KM: Well, Memphis has a lot of population. But the size of the business community it seems like to me is about the size of the Little Rock community.
[00:35:33] FF: It is.
[00:35:34] KM: Even though the population is huge.
[00:35:34] FF: Some parts of Memphis are great, but the products we were selling, they were – The people had so slow credit. We couldn’t get them financed. Anyway.
[00:35:43] KM: This is a great place to take a break. When we come back, we’ll continue our Frank conversation with Mr. Frank Fletcher. Sorry, I couldn’t resist that. Entrepreneur extraordinaire. We’ll talk about his passion for ponies, yes, and why all his race horses had some variation of the name Rocket, and about his philanthropic arm. Well, we’ve already talked a little bit about that, about how he’s using his learned business skills to empower others. He told me a story. What was that term you told me on the story?
[00:36:13] FF: Joint and several.
[00:36:14] KM: We’re going to tell that story. We’ll be right back.
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[INTERVIEW CONTINUED]
[00:37:08] KM: You’re listening to Up in Your Business with me, Kerry McCoy, and I’m speaking today with Mr. Frank Fletcher. Founder of a diverse empire of successful businesses, some of which we’ve been talking about today, and we’re going to continue to talk about. I feel like I’m going down memory lane when you talk about Factory First.
[00:37:24] FF: Yeah.
[00:37:24] KM: We talked about you working at Shakey’s Pizza Parlor. I mean, everybody loves those stories, and Worthen Bank. It’s no longer around, that you worked there for a little while. We always talk about how there’s no secret to success. It’s hard work, and you’re paying it forward today.
We’re going to not forget what we came back to talk about. Something that you teach when you go and talk to the University of Arkansas’ business department. It’s something that kind of jumped up and bit you and that you know what. It’s called joint and several partnerships. All right. Tell us that story.
[00:38:04] FF: Okay. This is probably the scariest thing that have ever happened to me in business, but I was approached many years ago, 40 years ago along with a bunch of guys. We owned a little piece of land [inaudible 00:38:17]. We had maybe $10,000 in it.
So, this man approached us and he said, “I own 19 Hiltons, and my name is Roy Cycle. I’m from Oklahoma City and I’d like to acquire your land, and you guys can have a percentage of the Hilton and you don’t have to put any money up, and you’ll get a big tax check back from the government.” I said, “Would you like me to hug you or what would you like me to do?” The other guys, who were smarter than I said, “We don’t want any part of this. Give us a little money and we’ll be gone.”
[00:38:47] KM: So money down.
[00:38:48] FF: So no money down and I got a big six figure check back from the government.
[00:38:52] KM: And you’re going to be a part owner in Hilton.
[00:38:54] FF: So I was going to be partner to Hilton with no money down and I was going to own 5%. Mr. Cycle and his friends own the rest of it. So I didn’t pay attention to what kind of loan he got. I didn’t pay attention to anything. I just drove by the hotel and went, “Hey, we own a little bit of Hilton.” Hiltons, where [inaudible 00:39:12] is now. A lot of people remember when it was the Hilton.
So about 10, 11 years went by and one day I got a phone call and this gentleman said, “Is this Frank Fletcher.” I said, “Yeah.” He said, “Well, I’m with the Republic Trust Corporation. Do you know who we are?” I went, “I don’t.” He said, “We’re a government agency, and we’ve taken over some banks and you guys owe us $11 million.” I said, “I think you’re talking to the wrong person.”
He said, “So we’re going to sue you for $11 million.” I said, “Sir, I don’t know who you are and I don’t know anything about the government being involved in this, but I only own 5%.” He said, “Well, you need to go see a lawyer. You signed a joint and severally liable partnership.” I said, “Well, I never heard of those words. I don’t know what that is.” He said, “Well, a lawyer will explain it to you.”
So I went over and saw Mr. Ernie Harper at the [inaudible 00:40:02] farm and I said, “Mr. Harper, could I possibly owe them?” He said, “Yes. They can hold you liable for –” I said, “Well, what happened to Mr. Cycle and all the other people?” He said, “Mr. Cycle had gone bankrupt in the meantime.”
So there were partners who did have some money, but the Republic Trust Corporation decided they were going to go after me. So I called this gentlemen back and I said, “Sir, we could sell our house, and we don’t really owe you $550,000 if you multiply 5% times 11 million.” I said, “We’re going to scrape up a million dollars and just go out of business,” and he hang up. I called him back and I said, “Did you hear me?” He said, “We’re not interested.” I tried to offer him 2 million, 3 million, he kept saying no.
So I finally went to Dallas after this one, over a year and a half, and they going to sell the hotel at auction. Let’s just say, it sold for 3 million. He would have sued me then for 8 million, and I would not have had the hotel.
So since we don’t have much time, I finally made a deal with him after two years that I would pay him 6 million, and I found out they had written this loan down from 11 million to 6 million, because one bank sold it to another bank, and they sold it to another bank. I learned that it actually went on the books for 11 million. They already written it down.
So I bought the hotel for 6 million. So I never intended to be in a hotel business, but because I signed a joint and several partnership. So if Mr. Rockefeller asked you, the listeners, to sign. Don’t ever sign anything that’s joint and several liable, because it’s a bad partnership.
[00:41:40] KM: You said you went through all the business schooling.
[00:41:43] FF: I never heard of those words.
[00:41:44] KM: Never heard those words.
[00:41:45] FF: Every time I speak to a class now, I write those words on the board. One time I was taking Bobby Petrino to lunch and he goes – He called me back after we had lunch and he said, “Hey, I just met you today. Would you ever mind texting me.” So I found a law and I made up a little gold plaque and I sent this to Bobby Petrino, and he still has it. By the way, he’s coming to Little Rock in September –
[00:42:09] KM: For what?
[00:42:11] FF: For the Touchdown Club. I invited him. I’m still friends with him, and he’s in Florida now. So I invited him to come. I think it’s going to be probably the biggest touchdown club meeting David Bazzel’s ever had.
[00:42:22] KM: Tomorrow, I’m buying tickets. I’m so glad you told me that.
[00:42:25] FF: Yeah. He said it’s going to be something –
[00:42:27] KM: I never wanted him to leave.
[00:42:27] FF: When I called him, I said, “David is my friend. I want you to come do this.” He said, “Frank, I’d love to.” I said, “You don’t even want to argue about it?” He said, “Everybody in Arkansas was great to me.” He said, “I was the one who made a mistake.” He said, “The people in Arkansas treated me great.”
[00:42:42] KM: Where is Bobby Petrino now?
[00:42:43] FF: He lives outside of Orlando, Florida.
[00:42:45] KM: Everywhere he goes, he makes a good team.
[00:42:49] FF: He’s no longer employed now.
[00:42:50] KM: I heard that.
[00:42:51] FF: So, anyway.
[00:42:52] KM: All right, let’s talk about your horse racing. It’s your passion for ponies.
[00:42:57] FF: It is what I’m doing now that I get really excited about.
[00:43:04] KM: All your horses are named Rocket.
[00:43:05] FF: They’re all named Rocket, except I had my first filly that she just ran this weekend in New York. Came in second. Her name is Frank’s Rocket. So I still got to name him and it’s kind of hard to deal with.
[00:43:14] KM: How many horses have you had?
[00:43:20] FF: My wife’s name is Judy, and I’ve been thinking about naming a horse after her, but she doesn’t really want that.
[00:43:26] KM: Why not?
[00:43:27] FF: Oh, she just lets you – She got a lot of nicknames.
[00:43:31] KM: You could name one Judy Rocket.
[00:43:33] FF: Yeah. She just tells me to name them what I want to, but leave her out of it. So, anyway. We love the horse business. We have a manager, a young lady named Cathy Morehower. She used to be a jockey. Now she manages. We have mares. We have babies every year.
[00:43:51] KM: Where are they?
[00:43:52] FF: Well, the mares are in Kentucky, and our horses are in New York and in Kentucky. Different places. We race at different tracks.
[00:44:01] KM: How many horses do you have?
[00:44:03] FF: I’m not sure.
[00:44:04] KM: Oh, now. Come on! Really? 20.
[00:44:06] FF: We have more than we can afford that’s definitely.
[00:44:08] KM: 20?
[00:44:09] FF: No. Not that many. But I talk to Steve Landers every day and I go, “Steve, do you like any money in the –” I know he’s making money in the car, “Making money in horse business.” He goes, “Frank, you know we just spent our money on this.”
[00:44:22] KM: That is true, isn’t it?
[00:44:24] FF: But it is fun. It is fun to go – It lasts maybe a minute and 20 seconds, and it seems like a lifetime.
[00:44:33] KM: Oh! Well, okay. If you got the money. Are you ever playing to retire?
[00:44:36] FF: No. I’m going to work till the day that – Till God calls me home.
[00:44:41] KM: You’re very religious.
[00:44:42] FF: Yeah. Well, I think we’re all parts of God in heaven and I’m thankful for everything I have.
[00:44:48] KM: This is the funniest story to me. He told me right before –
[00:44:51] FF: I’ve been baptized when I was – Of course, when I was small. Then again I think when I joined the First Church early on. But I’m now friends with a pastor who thinks that you need to be under the water. So I’m going to be baptized again.
[00:45:10] KM: Submerged.
[00:45:10] FF: Submerged.
[00:45:11] KM: But that’s not the funny part. You said, “No, pastor. I’ve been baptized. I don’t want to be submerged. I don’t want to mess up my hair.” He said –
[00:45:18] FF: I don’t have any hair when I get wet. He said, “Hey, I’ll come to your house. Do you got a swimming pool?” I went, “Yeah.” Myself and some of my friends are going to be baptized again.
[00:45:28] KM: At your swimming pool.
[00:45:29] FF: Yeah.
[00:45:29] KM: I love that story. Thank you for sharing that.
[00:45:33] FF: Thank you.
[00:45:34] KM: What do you want your legacy to be?
[00:45:36] FF: That’s a hard thing to say.
[00:45:39] KM: I know. It is.
[00:45:39] FF: I’m proud of my family. I’m thankful for my family and I always said I’m thankful for all the opportunities I’ve had.
[00:45:47] KM: You’re a great person. I have so enjoyed meeting you. I have a gift for you. It’s a desk set. U.S. and Arkansas flag desk set. Do you have one those?
[00:45:56] FF: That will be on my desk, I promise.
[00:45:57] KM: Do you have one of those?
[00:45:58] FF: No. I’ve never had one.
[00:45:59] KM: I’m amazed how many people do not have a state and American flag desk set sitting on their desk, especially –
[00:46:06] FF: This will be there.
[00:46:08] KM: Good! Think about how much fun we had on the show every time you look at it. I want to thank you again, Frank.
[00:46:12] FF: I had a great time. You’ve been great.
[00:46:14] KM: Thank you. For our listeners who might have a great entrepreneurial story, they’d like to share, send a brief bio and your contact info to me, kerry@flagandbanner.com and someone will be in touch. To all, thank you for spending time with us. We hope you’ve head or learned something that’s been inspiring or enlightening, and that it, whatever it is, will help you up your business, your independence or your life. I’m Kerry McCoy and I’ll see you next time on Up in Your Business. Until then, be brave and keep it up.
[END OF INTERVIEW]
[00:46:45] GM: You’ve been listening to Up in Your Business with Kerry McCoy. For links to resources you heard discussed on today’s show, go to flagandbanner.com, select radio and choose today’s guest. All interviews are recorded and posted the following week. Subscribe to podcasts wherever you like to listen.
Kerry’s goal is simple, to help you live the American dream.
[END]
