An educated bet pays dividends in business

April 13, 2009
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HOLLAND — At the grand opening of CityFlats Hotel, Chuck Reid’s father had a discussion with the Holland mayor about how Reid’s being let go from his teaching job was the best thing that could have happened to his son.

Chuck Reid, president of Charter House|innovations, which owns CityFlats Hotel, started his career in his home state of Pennsylvania as an industrial arts high school teacher. It was his dream to teach and coach — that’s what the self-described sports fanatic always wanted to do. Unfortunately — or maybe fortunately — Reid was laid off in 1984 after just one year of teaching, due to a strong decline in student population.

“I miss teaching, but I still try to teach today. I really do miss the sports and coaching, and I still have a hankering to get back to that,” he said. “Getting let go from my teaching job — it was the saddest, and yet it was best. There were a lot of things that happened when we ran out of kids at my first teaching job.”

His next job was running fiber optic lines for AT&T, the first of many things to happen after his teaching job.

“I thought, ‘What the heck, I’ll try that,’” he said. “Our job was to make sure the plow train didn’t hit any gas lines and blow up anything.”

His stint with AT&T also only lasted for a year, and in 1985, he stumbled across an ad in the newspaper for a job at a Swiss-owned company that was just starting up its U.S. operations. The company was Franke Inc., a kitchen equipment manufacturing company in the quick-serve restaurant industry, serving clients such as McDonald’s.

“I was brought in as a sales coordinator for about eight months. I learned the business from my boss; he abruptly left. We got a new president, and he brought his son in as my boss,” said Reid. “He came in — he didn’t know anything about McDonald’s, so I had to train my boss.”

Reid was assigned the southern U.S. as his territory and moved to Raleigh, N.C., in 1986. He spent the next six years with Franke Inc., and even though he left in 1992, the relationships he formed with his clients ended up lasting much longer.

His next career move took Reid and his family to Minnesota, where he became director of sales for Ram Center, a commercial kitchen automation equipment manufacturer that also sold to McDonald’s.

“They came up with a fully robotic french-fry station and needed somebody to sell it,” said Reid, who got the program off the ground.

“I learned the whole ‘up north’ type of thing.”

That translates into breaking his femur on a snowmobile in northern Wisconsin — 45 minutes from the nearest hospital. It was his first snowmobile ride.

“(I was) out in the middle of this trail … I still don’t remember how they got me out,” he said. “So my wife wasn’t really thrilled with me at the time, and things (at work) didn’t really work out.”

The product Reid had been hired to sell never reached the expected standards, and it wasn’t selling well. A year later, he landed a job that he actually had been eyeing for some time: national sales manager for Soft Play, a manufacturer of commercial playground equipment.

“I had originally seen their product in 1988. They were at a McDonald’s convention, right across the aisle from us. It was the introduction to the balls and tubes … that whole system of play,” said Reid.

“I remember talking to the president at the time and telling him, ‘If you ever need someone to sell, I can sell that.’ I’ve just always had this fondness for playground stuff.”

Soft Play’s president called him in the spring of 1993.

“He said, ‘Hey, I’ve got a director of sales job if you’re interested in it.’”

Reid moved his family out of the cold and back to North Carolina.

For four years, Reid worked for Soft Play, enjoying much success. Meanwhile, in 1996, he decided to put his industry knowledge to work by starting Base Design, a kitchen automation design firm. The company was formed by Reid and two partners, Brian Rudesill and Ned O’Brien.

“The Ram Center had a product that was just for McDonald’s and it wasn’t even going after Burger King. We came up with our own automated french-fry dispenser to sell to those guys,” said Reid.

For another year Reid continued to work for Soft Play while also managing Base Design. He left Soft Play in 1997 to work there full-time. The product had received its license for Burger King and all seemed well. But then the company was hit with a lawsuit. Reid and his partners went to Reid’s old employer, Franke Inc., for advice and help with legal services.

While the lawsuit was going on, Reid found he needed a second job to provide some income.

“I lost a year of selling,” said Reid. “I needed to go find some other work.”

Reid became regional account manager for ISI, a Milwaukee-based supplier of seating and décor. His territory was the Charlotte, N.C., market.

Around the year 2000, Franke Inc. hired Base Design to create some automation for it. Between the lawsuit and Base Design’s development work for Franke, Reid’s relationship with his former employer was rekindled.

“It was January of 2002 when I got a call from my old boss from Franke, who is now the president of Franke. He said, ‘Why don’t you come and be our director of sales for this company called Charter House.”

Charter House Inc., based in Holland, Mich., was, at the time, a small-scale furniture manufacturer for the quick-serve restaurant industry, which Franke had acquired as a tag-along company in a much larger deal.

“I said, ‘I don’t really want to do that. I don’t want to do competitive stuff with my present employer,’” said Reid. But his former boss convinced him to go to Holland for a visit.

“I came up here, checked it out, walked through the plant and met some folks. … It was intriguing, I’ll say that. It was a ground-up opportunity, because they weren’t nearly as sophisticated as my previous employer,” said Reid.

“I saw an opportunity for me to do it, so January 21st, 2002, was not only my youngest son’s birthday, but it was also my first day at Charter House. One part of it was, I could still live in Charlotte, which made my wife happy. We didn’t have to uproot the kids.”

Reid was given the task of making the fledging company competitive with larger suppliers.

“We had a long way to go. Those companies were seating and décor companies, and we, at Charter House, were just seating. We made chairs and there were no designers on staff.”

Reid’s main goal was to get McDonald’s approval to sell to its franchises, which he did in less than a year.

“Prior to getting to that point, the wheels were coming off the bus, so to speak, at Charter House. It just wasn’t so good,” he said. “The president asked me to come up to Holland and become the general manager, which, of course, would require me to actually move.”

The Reid family moved to Michigan in December 2002, “which began the worst two years of my life,” he said.

“2002 to 2004 were awful. Our sales were awful and all I was doing was cutting people left and right. How many different ways can I tell the owner at Franke, ‘You lost money and whatever you’re doing to try and make money, it’s just not working’? It was a pretty trying time.”

It’s amazing what your tongue can talk you into doing.

“It was July 21st. I was sitting in a car in Destin, Florida, at a McDonald’s show. It was 101 degrees and I was talking to the other president of Franke U.S. about what to do with Charter House,” said Reid.

“I just made an off-handed comment: ‘How about I buy the company?’ It just kind of got silent. We didn’t say too much after that, and it wasn’t until the next day that I got a call saying, ‘OK, we’ve got six weeks to get this deal done.’ I mean, when you talk about a ‘be careful what you ask for’ type of moment — that was that moment.”

Reid and his two Base Design partners used the product that Base Design had been developing for Franke as leverage to buy Charter House in 2004. He reorganized the company’s sales staff and brought in designers for an in-house interior design department. He also re-branded the company as Charter House|innovations.

“I based (the decision to buy the company) on the fact that I didn’t have a real sales force; I had two people. And I thought if I was able to put together a dedicated sales team and improve the quality of our design group, we could be competitive,” he said. “I bet it all on the team that we had put into place from 2002.”

Reid thought a boutique hotel would make a great stage for the company to showcase the products from its design talent. The company proceeded to build Holland-based CityFlats Hotel, where each of the 56 rooms is completely different. The LEED Gold-certified hotel also has a restaurant on the top floor and a bar off the lobby.

Now Charter House|innovations sales have quintupled and more than 100 new jobs have been created.

“From 2004 to 2008, we’ve quintupled. That’s a word you don’t often hear,” said Reid.

His bet paid off.

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