By Pat Pape
C.J. Laughlin, general manager of Laughlin Oil Co., got his first job when he was three years old. “My parents paid me a penny a stick to pick up sticks in the field,” said Laughlin, who grew up on a 350-acre cattle ranch in Oregon.
Laughlin’s parents, Charles and Jere, also owned the commercial fueling business, but C.J. did his after-school work on the ranch. After attending college and watching friends land corporate jobs, Laughlin returned home to the family oil operation. “I wasn’t looking to get into the corporate world,” he said.
Starting at the bottom as a fuel truck driver, Laughlin worked his way up through the business and eventually convinced his folks to add convenience stores to the portfolio. It was a venture that paid off.
Last year, the family sold Laughlin Oil, along with three of its five retail outlets. While C.J. assists the new owners with the transition, his parents have been able to semi-retire, enjoying their vacation home four hours away. The new family company is C & J Laughlin Co., which includes two Circle K convenience stores, one with a carwash, in Aurora and Woodburn, Oregon.
“It has been a blessing for us,” Laughlin said of the family business. “We enjoy working together.”
It is estimated that nine out of 10 small businesses start out as family-owned operations, and those businesses make a huge contribution to the U.S. economy. According to the University of Southern Maine’s Institute for Family-Owned Business, family businesses account for approximately half of the U.S. gross domestic product, provide 60 percent of the country’s existing jobs and are crucial in creating new employment opportunities.
Seamless transitions from generation to generation are necessary in order to maintain that outstanding economic track record and to help family businesses thrive. Each transition demands thoughtful planning, good communication and a heartfelt enthusiasm for the work involved.
Ted and Kris Rees became franchisees in 1973, opening the first 7-Eleven store in Carlsbad, California. Their son, Richard, was in the eighth grade when he began stocking shelves, filling the cooler and emptying the trash at the neighborhood store.
“I was the front. I did all the stuff no one else wanted to do,” Rees said. “I was in my junior year before I didn’t have to work with my parents.”
Like his two brothers and two sisters, who also spent time working at the store, Rees moved on to other jobs. He graduated from college and took a job in the Los Angeles garment district. Later, he spent three years on the Frito-Lay sales team. “But the convenience store business was in my blood,” he said. “I eat, sleep and breathe retail.”
Eventually, Rees returned to Carlsbad to manage his parent’s franchise. Unlike some business owners who work with their children, Ted and Kris gave him full rein as the store’s manager and allowed him to invest in new ideas. “I told them that the day they wanted to retire, I’d buy it,” he said of the store.
Ted was 70 when he chose to retire. Today, the 7-Eleven store has been in the family for more than 34 years, and Richard has been the franchisee for the past seven. He loves the business and working with customers, but he also values the education he received from his other jobs, particularly the time spent with Frito-Lay.
“That was a great experience,” he said. “It enabled me to visit a lot of stores and to see how owners treat vendors. I treat all my vendors with respect. I give them guidelines, and I never have any problems.”
Rees admits that there are certain franchisee qualifications that cannot be acquired through either formal store training or parental guidance. “This is a 24-hour business. You train your staff to handle all situations, but when the phone rings, be prepared to go to work,” said Rees, who typically rises by 3:00 a.m. “As long as you accept that, you’ll be a happy person.”
Occasionally, his father Ted drops by the store to purchase a lottery ticket and take a look around. “If he sees something that needs attention, he’ll tell me about it,” Rees said. “Otherwise, he says the store looks nice.
Steve Stuck, vice president of Jacobs Petroleum in Waynesburg, Pennsylvania, believes in detaching business from family, even when his office colleagues are the same people who show up at his family reunion. “We try to separate business from family things,” he said. “But it’s hard to do.”
Stuck’s father, Richard, purchased the Exxon distributorship in the mid-1970s. Today, it includes a heating oil distribution division, a carwash operation, four Subway restaurants and six convenience stores currently being converted to ExxonMobil On the Run locations. While Stuck’s mom, Ellen, handles the financial areas of Jacobs Petroleum, his sister has chosen a career in education.
“There are so many different things we’re doing,” he said. “There are tough business decisions to be made, and we don’t always agree.”
It is a similar situation in Laughlin’s family operation, with his parents still active in the company and his sister, Michelle, handling the business’ financial accounting from her CPA firm.
“We are constantly together, and we talk about business,” Laughlin said. “But when we get together on weekends, we try to put business behind us. We’re pretty open with each other. If he [Charles] feels something is wrong, he’ll tell me, and if I feel something is wrong, I tell him. We may agree to disagree, but we get along pretty well.”
Convenience retailing has helped create jobs at Devin Oil Company, a family business based in Oregon. Glen Devin founded the company as a Chevron supplier in 1952. His son, Richard, joined the company in 1970, and today three of Richard’s children are active in the business.
Experts at the Baylor University Institute for Family Business recommend that if multiple siblings are involved in the family operation, everyone should sit down together and determine who will do what job and handle what responsibilities. The Devins have that issue under control.
Son Rich supervises the petroleum side of the business, the carwashes and the AAA towing service. Daughter Renee works part-time in the office. A second son, Doug, handles the company’s growing convenience store operation. Recently, Devin Oil became an area licensee for Circle K, and the family’s nine outlets are being converted to the Circle K brand.
When Doug was a kid, he would “go down and help my dad,” he said, but he had no plans to join to the oil company when he enlisted in the U.S. Marine Corps in the 1990s. After his discharge in 2000, he took a new look at the expanding business.
“As the company grew, opportunities appeared,” he said. “Over the last eight or nine years, it’s grown a lot.”
Converting the convenience stores to a name brand is a positive step in that growth trend, Devin said. “Circle K is a good, national brand that fits into our business model. Everything they bring to the table complements everything we do. They are a good marketing company, and they’ve been helpful in remodeling the stores.”
Doug also sees many advantages in working side by side his family members on a daily basis. “Having family members you can count on — that’s the biggest thing,” he said. “I don’t have to worry about operations because my brother does that.”
Dad Richard Devin remains president of the company and fully active in the operation. “We drive to work together a couple of times a week,” Doug said. “He makes suggestions about what we ought to do.”
Sonja Hubbard and her sister, Stacy Yates, became aware of small, important details about the family’s business at an early age. When they were children, their dad, Jim Yates, founder of E-Z Mart convenience stores and 1993 NACS chairman, would have them check gasoline prices every time they drove past a competitor.
“As soon as I turned 16, I was working in the office,” recalled Hubbard, now CEO of the Texarkana, Texas-based retailer. She earned her CPA and held an accounting position in another company, as did Stacy, who is currently the E-Z Mart CFO. Sonja’s husband, Bob, serves as president of the 300-plus-store chain.
“We’re lucky,” said Sonja. “We don’t have the problems some families have. And if the business is an obsession, at least we all have the same one.”
Currently, the succession is not clear. Sonja and Bob have a daughter, Lauren, who studies creative writing in college. When she was 18, she started working in the office during her summer vacations.
“Her view is that this is way too much work,” said Sonja. “But I wouldn’t be surprised if she were to change her mind.”
Yates has two children, ages 13 and 8, who Sonja describes as “organized and detailed people. And the youngest one could sell anything.”
7-Eleven franchisee Rees is thinking to the future, as well. He has four offspring, ages 15 to 8, and the 15-year-old is already on the store’s payroll.
“All my kids are good at math. I’ve trained the oldest to do paperwork, which frees me up to do orders,” Rees said. “I’m applying for a multiple-store package. I’m thinking ahead for the children. The 7-Eleven franchise system is exceptional with the support you get.”
Stuck of Jacobs Petroleum has children ages 10, 8 and 6 and “we’re still trying to have fun,” Stuck said. As for them joining the company in a decade or two, “I’d like them to do what they really want to do.”
At Devin Oil, all third-generation Devins are parents of young children. Occasionally, Doug takes his children, ages 3 and 6, with him to the office, and if they want to join the team someday, “they’ll have an opportunity to do so,” he said.
Business consultant Roger Fritz, Ph.D., is the author of Wars of Succession: The Blessings, Curses and Lessons That Family-Owned Firms Offer Anyone in Business. He advises business owners to give their offspring an overview of the family business at an early age, assigning them simple responsibilities and gauging their capabilities and interests. Children should also work outside of the business, he adds, to acquire skills and insights that a family business and co-worker relations can’t provide.
Scott Hunt, a second-generation leader with Hunt Brothers Pizza of Nashville, Tennessee, liked Wars of Succession so much that he bought copies for all family members in the business. They later met to discuss the author’s recommendations. Of the 300 Hunt Brothers employees, 25 are family members.
“The first generation was entrepreneurial,” Hunt said of his father and three uncles who got the pizza distributorship off the ground. “But there comes a time when you have to set up procedures and policies. That’s what the second generation has brought to the business. We have tried to set ourselves up for growth.”
In the last five years, Hunt Brothers Pizza has added formal IT, marketing, training and purchasing departments, which are mandatory for an operation with 6,000 in-store locations throughout the Southeast.
“And we hired people competent in these areas,” Hunt said. Family members aren’t automatically promoted up the ladder. “We try to provide training, but if people aren’t qualified, we don’t promote them,” he said.
There are many challenges in a family business, and family dynamics impact the company, Hunt admits, but there is no other work he’d rather do. “The job of the second generation is to give this [business] to the third generation and to have the third generation prepared for it,” he said. “That’s 100 percent of our job.”