Richard Farmer took over his father's 1929 laundry startup at 21 with $180,000 in revenue and 12 employees. He transformed it into Cintas, a $75 billion company that rents uniforms and supplies to businesses. The Farmer family still owns about 18-20% of the publicly traded firm.
So in 1929, there's this guy and he starts this company where it's very odd. He basically is cleaning the rags and uniforms for circus performers. Very strange start, but that's how this company starts. And he turns that into a business and he calls it ACME Industrial Laundry. And he kind of scales that up, but not a lot. It's a very small business, but he scales it up to where he starts doing laundry for other uniform businesses. Now he started that in 1929. By 1960, his son, who's in it like 21 years old, comes into the business and he's like, hey dad, I would love to work for you and maybe take this over one day. And the dad's like, yeah, sure, let's do it. And it does okay, but inevitably there's a little argument between the father and the son. And so the father calls the son into the office and he's like, hey, look, man, this isn't working. And the son's totally expecting him to be like, You know, you're fired, you're out. And the dad goes, look, this isn't working. Here's the keys, man. You run it. Let's see what you can do. I'll step out your way. Let's see if you could pull this off. And so this son, he's at the time 21, 22, 23 years old. His name is Richard. He takes control of this business and he's like, let's grow this sucker. And so in 1960, when he takes it over, it's doing $180,000 in revenue, which is something like $2 million today. It has 12 employees. And he is like, look, we're going to like focus on doing laundry for companies who need cleaning supplies. So like extra rags, they're basically just washing rags and he grows it and it works out well. And he grows it to the point where after, I think, 8 years, the business grows from $200,000 a year up to $1.6 million a year, which is the equivalent of like $15 million a year. He's growing this business and it's a, he's now expanded into laundering company uniforms, which is a very strange thing to get into. I didn't even know that existed. But he grows this sucker for the next 50 years, and now they've renamed the company to Cintas. Have you heard of Cintas?
Yeah, I see their trucks.
I see their trucks all the time too, and I'd have no idea. Okay, so do me a favor, go to Cintas market cap. Just Google that and look at what it says.
$75 billion.
It's a $75 billion company and their main business is still, uh, now they, they launder uniforms, but they also supply the uniforms. So they make uniforms for all types of businesses. You know, like you'll see, like if you see like a typical janitor outfit, that's a very easy one, but it could be restaurants, it could be anything. And then they, uh, rent you your uniform and they'll launder it for you. But then they've expanded. So like if there's a fire extinguisher in the bathroom of a restaurant, it probably has come from them. If there's cleaning supplies, it probably comes from them because once they made inroads into a business. They're like, hey, along with your uniform, we're going to sell you all these other things. And so I think they do something like $8 or $9 billion, uh, a year in revenue, and it's subscription revenue. So it's like a huge company.
Why is it subscription revenue?
It's uniform rental.
Oh, nice.
Yeah, they got you. Uh, it's called, uh, RaaS, uh, uh, you know, like rental as a service. I don't know, it's just— that's just what they do. Uh, they, they sell uniforms. Or they rent uniforms and so they're able to get like these subscription businesses and then it's also like real recurring revenue because they'll sell you all this other stuff and they've got inroads. But as the business was taking off, Richard Farmer, his name, he starts getting old and he's like, I need to figure out a way how to like keep this within my family. And so to this day, the family, the Farmer family still owns something like 20%, I think maybe 18% of the business. And like, he was like, I made it my mission to create this like generational thing and I've trained my children to help take this over. To make decisions as, as it comes to, uh, giving away our money, but also governing the, the, the company. I don't— a family member isn't the CEO, but they're still like involved. And so the reason why I looked this guy up is I'm very fascinated with how you could pull this off where you could keep your family in the business. I think that it's very hard and it's high risk, high reward. And so I've been like studying all these families who have pulled it off, and these guys have. And from the outside, there's A dozen other examples of people who have crashed and burned, and this has not worked. My question to you, is this a thing that you aspire to have? All right.
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