Promoting Family Values

Franklin Empire

Franklin Empire is one such success story. The company began with the merger of two independent family owned electrical distributors in Montreal, Quebec in 1992 – Empire Electric which began in 1942, and Franklin Electric, launched in 1946. Franklin Empire’s President, Bob Shapiro, relates that his father founded Franklin Electric and Bob’s partner’s grandfather established Empire Electric, making Franklin Empire over 70 years strong with 12 branches in Quebec and eight in Ontario.

With 450 employees, Franklin Empire is Canada’s largest independently owned electrical distributor serving customers in the residential, commercial and industrial sectors.

“We’ve done well,” states Bob. “An electrical distributor can do for our suppliers what they can’t do for themselves… the challenge is to be aware of what those needs are on both sides, what their expectations are and being able to deliver those expectations.”

Growth through Acquisition

Through a series of acquisitions, the most recent being Ontor’s ISD (Industrial Systems Division), Electra Supply and DS Tech, Franklin Empire strives to uphold its reputation as an investment-driven, exclusive, valued added distributor for its customers and suppliers. Additionally, Franklin Empire is Siemens’ Exclusive Industrial Distributor for automation and control products in both Quebec and southwestern Ontario and it is this partnership with Siemens that has influenced Franklin Empire’s approach toward acquisitions. “There’s very little exclusivity in the electrical distribution business,” explains Bob. “We were the Siemens exclusive partner for all of the province of Quebec plus Ottawa. Electra was their partner in southwestern Ontario; Ontor was their partner in the greater Toronto area. So when both of those seemed to become available, that was really what drove that decision.”

When discussing Franklin Empire’s growth strategies, Bob relates that market share is not one of them simply because, “Market share in the industry has not proven to be of very much value… However, one of the driving issues for Siemens, going to this exclusive arrangement, is to grow market share. So for the Siemens part of the business we have an obligation to grow market share. For everything else we don’t look at market share at all.”

What Bob believes is of value to Franklin Empire growth is the question of critical mass in that, “You want to have enough critical mass to be able to afford the resources to serve your customers and not to be put in a position where you lose customers because they don’t believe you have the resources to serve them. So it’s really a certain critical mass. We’re there. We don’t need any more critical mass in order to do that.”

Bob certainly believes in taking advantage of opportunity when it presents itself as was the case with the Electra and Ontor acquisitions. “If the kinds of opportunities arise like Electra or Ontor, for whatever reason, we’ll look at it,” he says, noting that, “We can move pretty quick when an opportunity presents itself, but we have no master plan to get bigger and bigger… that was not our goal. It just happened. What it does indicate is that we’re big enough to have the resources.”

Building Relationships

As a private company with three working partners involved with all aspects of daily management, Franklin Empire believes in total involvement in relationships with customers and suppliers. The company acknowledges that as an electrical distributor it is in the middle of the supply chain and doesn’t have exclusivity for most of the products that it distributes. For this reason, “We have to bring value to our suppliers,” says Bob. “We want to have closer working relationships with those suppliers that are important to us.”

Customer loyalty is also a key driver of Franklin Empire’s success. Bob explains that the smaller family owned electrical contractor “may have an inclination to favour us.” Larger contractors operate more like industrial corporations and will do business with more than one independent electrical distributor. “In the instance of the large industrials you’re looking at the suite of services that we can provide,” he says.

Bob goes on to explain that market behaviour can be and often is dictated by geographic differences. “Quebec City doesn’t function like Montreal, Montreal doesn’t function like Toronto, even though we’re talking [about] the same products. Every marketplace has its landscape, in part because most often there are different competitors in those market places.” Business must be flexible and adaptable to meet the needs of diverse markets.

Changing Landscape

The direction Franklin Empire takes into the future will be determined in part by a shifting technological landscape. “It’s an interesting time from a technology point of view,” Bob says. “At the end of the day, whatever business you’re in, you have to understand your customer; you have to understand what his business is all about… We can provide guidance and we can help customers get in to new market segments by virtue of training and supporting them technically, if they give us a chance to share.”

It’s also important to be fully aware of the changing landscape that mergers and acquisitions dictate. Mergers and acquisitions happen constantly and this is, Bob says, “true amongst our suppliers, it’s true amongst our competitors and it’s equally true amongst the largest industrial customers out there that buy and sell on a global basis. Often the decision making point moves out of our sphere of influence… ultimately you’ve got to be able to do what the customers need you to do.”

As an independent electrical distributor, Franklin Empire is a member of Affiliated Distributors (AD), a marketing group based in Philadelphia offering support and the required resources to independent operators so that they may better compete with larger national chains. “The majority of family owned businesses are part of Affiliated Distributors,” says Bob. “The organization fosters best practices… that is really the value of the organization to us and we’ve learned all kinds of things. You never stop learning.”

Ultimately, Franklin Empire’s continued growth and success is not only the result of strategic acquisitions, adapting to ever changing markets and customer loyalty. Its success is also found in its style, its hands-on approach to doing business. “The challenge is sustaining,” says Bob. “It’s insufficient just to improve a system if you don’t keep at it and make sure you train people to execute. You want to be error free so that the customer has confidence that you can get whatever they need – on time, without errors.”

July 21, 2018, 3:37 AM EDT

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