BUILDING, ACQUIRING, AND MANAGING QUALITY COMPANIES FOR OVER SIXTY YEARS
What started out as Frandsen Log and Lumber Company in 1951 is now a major holding and management company with interests in several manufacturing companies and a bank holding company spanning three states, with over $1.5 billion in assets. Today, Frandsen companies employ over 1,000 people in Minnesota, North Dakota, Wisconsin, and Kentucky.
Frandsen Corporation and its entities have purchased nearly fifty companies in the past sixty years. We focus on companies that bring synergy to our current businesses. We believe we can offer a great deal to a business’s owners, its employees, and its customers while honoring and adding to their history of success.
While we do not focus on any specific industry, the Frandsen acquisition model follows a simple, proven philosophy:
We are business operators, not just financiers.
We hold onto our businesses indefinitely.
We move quickly, finance our own transactions, and make strategic decisions.
“We look to buy successful businesses with successful people, and to keep them running well. We have very little employee turnover within the businesses we acquire,” explained Greg Frandsen, president of Industrial Netting.
Why does the Frandsen model work? First, Frandsen Corporation finds a profitable and successful company to purchase, and pays cash for it. Then, we retain the management team and invest our capital in long-term growth strategies. The businesses gain access to capital and to Frandsen Corporation resources such as accounting, human resources, IT, finance, marketing, and experienced strategic thinking.
AN ENTREPRENEURIAL LEGACY
Dennis Frandsen has been an entrepreneur his whole life. As he continues to enjoy the adventure, he’s not slowing down.
Frandsen grew up on a dairy farm outside of Luck, Wisconsin, with a mother and father who had eighth-grade educations. He attended school in a one-room schoolhouse. After graduation from high school, Frandsen’s entrepreneurial instincts led him to the first of several significant decisions he would make in his life. Having pondered a job offer to work as an office boy in the Twin Cities for the company that would become 3M, he decided that he could earn more money logging on his family farm and selling the lumber, just as he had done during high school. He already owned the requisite chain saw, and he invested in a truck. When the family farm ran out of logs, he began to contract with neighbors to harvest their trees and pay them a portion of the proceeds. Before long, he was earning much more than he could have made in corporate America.
In 1953, at the age of nineteen, Dennis was faced with the next significant decision of his young career, a situation that taught him the value of a little pluck and a little luck. Upon hearing of 200 acres of virgin timber that might be available across the border in Rush City, Minnesota, he hopped on a plane (for the first time in his life) and traveled to Chicago (for the first time in his life) to drop in—with no appointment—on the woman who had inherited the land. Using a combination of pleading and charm, Frandsen emerged with an agreement to purchase the land for $13,000.00. Not that he had anywhere NEAR the capital required to fund the deal.
BANKING ON AN OPPORTUNITY
Next moment of significance: Dennis Frandsen, now doing business as Frandsen Lumber Company, applied for a loan at his local bank in Luck to purchase the Rush City property. Upon being turned down, he walked out of the bank and vowed that someday he would own that bank (a prophecy that came true thirty years later). He was similarly turned down by a bank in Rush City. But as he drove home after the second try, fate seemingly guided him to the bank in Grantsburg, Wisconsin, where he met a kindred spirit, banker Walter Jensen, who decided to fund the lumber venture.
Within five months, Frandsen Lumber paid off the note in full at the Grantsburg bank—with half the timber still remaining unharvested, which would mean a very healthy profit. When that was sold, he would turn the real estate into another level of profit. Dennis relocated to Rush City, where he soon met his wife, Jeanette, an RN at the local hospital. He then purchased more land than he needed for a home on Rush Lake, started a family, turned that excess land into lakeshore lots, and sold them at a profit. In the mid-1960s he acquired a thousand acres of land in Mora, Minnesota, through a bank foreclosure, subdivided that land into five-acre lots, sold them, making more than a million dollars profit on that venture.
Certainly many more details contributed to the rapid growth of Frandsen’s holdings at the time, but it’s enough to say that hard work, good timing, and a good business sense all played a role. In 1963, ten years after joining forces with Jensen, Frandsen would once again turn to the banker friend to help finance his purchase of what is now Plastech Corporation, a leading manufacturer of injected plastic moldings. Then, in 1982, he kept his promise to himself by purchasing Fidelity State Bank in Luck and launching what is now Frandsen Financial Corporation.
But Dennis Frandsen wasn’t nearly finished. Since that time there have been over fifty corporate acquisitions of banks and manufacturing entities. More than sixty years after launching his business, he still isn’t finished. He has surrounded himself with a loyal group of talented business people who are charged with running his companies with the same entrepreneurial spirit.
THE FRANDSEN PHILOSOPHY
Frandsen Corporation has earned a reputation as a unique, innovative company that values honesty, fairness, and accountability. Frandsen’s unique management style holds senior management accountable but allows them freedom to run the businesses. That style has earned him recognition as one of the state’s leading entrepreneurs, and a well-earned reputation for treating people right. “When I first started here, Dennis told me the quickest way to get fired is to treat a vendor or employee badly,” noted Dan Ferrise, COO of manufacturing for Frandsen Corporation.
As the corporation continues to grow by expansion and acquisition, Frandsen’s uniqueness stands out—such as his model for buying profitable businesses and keeping them intact, from top management right on through employees on the assembly line. Dennis believes that well-run enterprises can benefit the employees, the shareholders, the communities, and the customers. Tony Johnson, who sold Dennis his first bank in Luck, Wisconsin, stayed on to run that bank and is now a senior vice president with Frandsen Financial. He repeated a core Frandsen business tenet: “If someone’s doing a decent job, let them do it!”
Frandsen’s acquisition philosophy has earned the company the moniker “the benevolent acquisition company,” according to Bill Richardson, founder of InterNet, Inc., now Industrial Netting, which Frandsen purchased in 1999. “The sale process was beautiful, no bumps at all, and the business has plowed ahead. I still have lots of friends at the company, and they’re very happy with how things turned out.”
Employees describe Dennis Frandsen as creative, a keen listener, and naturally curious. Frandsen’s son Greg, who now serves as president of both Frandsen Corporation and Industrial Netting and works closely with Plastech, says, “We’ve been successful because we’re willing to try things and see if they work.” Greg also credits his father’s positive attitude as a huge factor in his success. “He believes that every day is another wonderful day and that there are a lot of good people in the world.”
STEERING AN ENTERPRISE, ONE TURN AT A TIME
Dennis Frandsen has adopted a favorite maxim, which is not original with him but which embodies his lifetime of accomplishment by building success one layer at a time: “Inch by inch, anything’s a cinch.” The simple formula that Dennis began some sixty years ago and continues to follow today was to start small, make his first business profitable, and use those profits to fund additional ventures and expansions. “People always ask me for my secret,” he says. “There isn’t one. You’ve just got to keep a level head and stay away from greed, which is the worst thing that can happen to a successful person.”
Frandsen’s lifelong passion for stock-car racing exemplifies the changes as well as the continuity that have marked his career. He drove his first stock-car race on a local dirt track in 1955, behind the wheel of a 1934 Ford he named V2. While he gave up race-car driving years ago, today he sponsors a state-of-the-art modified stock car—also named V2—that places well in national USMTS circuits. Stock-car racing has come a long way since the days of the hometown dirt tracks, and the Frandsen enterprises have seen even greater changes in the world of industry and finance. But the values that steer the Frandsen Way have transcended those changes and resulted in a solid organization that has thrived and grown regardless of recessions and crises that have come and gone.
Frandsen’s achievements have not gone unnoticed by the larger community. He was named 1999 Manufacturing Entrepreneur of the Year™ for Minnesota and the Dakotas, nominated by U.S. Bank for the award, which is sponsored annually by the Ernst & Young accounting firm. In 2003 he received the John F. Cade Entrepreneur of the Year award sponsored by the John M. Morrison Center for Entrepreneurship at the University of St. Thomas. He was inducted into the Minnesota Business Hall of Fame sponsored by Twin Cities Business magazine in 2009.
Today, Dennis Frandsen isn’t ready to retire, nor is he a workaholic. He makes time to enjoy his extended family: two sons and two daughters—all of whom have had considerable business success—and ten grandchildren and three great-grandchildren. During the winter months Dennis and Jeanette spend time at their second home in California. He tries not to miss Minnesota Timberwolves games (he was a former minority owner), plays golf whenever he can, and continues to find ways to grow his business and better the communities within Frandsen Corporation’s footprint.
Among Dennis’s favorite pursuits is his more-than-substantial support of Lakes Region EMS, the nonprofit ambulance service that serves east-central Minnesota and northwest Wisconsin. He began his relationship with Lakes Region EMS in 2015 when he donated a hangar at the Rush City Regional Airport to them. The hangar now houses a medical helicopter dedicated to the area. At the same time he remodeled and outfitted the building to become the new home base for the ambulance and crew that were formerly housed in a pole building in Rush City. Since that time he has provided remodeling, redecorating, and all new furnishings for four more ambulance stations. In 2016 he provided a new, fully equipped ambulance, as well as retrofitting the remaining nine ambulances with hydraulic gurneys. Numerous other donations of equipment have been made or are in the works. The entire Frandsen family is enthusiastically supporting this effort and will continue it long after Dennis and Jeanette are gone—at which time, by the way, 80 percent of their estate will go to charity.
Dennis can sleep well these days, thanks in part to the people he trusts to run his enterprise. “You have to hire the right people and put them in the right position,” he says. “Show them that you expect them to perform and deliver, and then compensate them well.”