Kennewick nonprofit purchases companies
A Kennewick nonprofit has acquired a longtime Tri-City pizza franchise and a bottled water service company to grow its mission-based organization and expand its headquarters to accommodate a new social services outreach program.
Columbia Industries, a nonprofit committed to supporting and empowering individuals with disabilities and other challenges, acquired the Tri-Cities’ four Round Table Pizza restaurants and Kennewick’s Paradise Bottled Water Co.
“We think we’re a great fit for them and they’re a great fit for us,” said Columbia Industries CEO Brian McDermott. “They’re both positive members of the community.”
CI is planning to fund and expand its community programs with revenue generated from the businesses.
“We decided last May as we went through our budgeting and strategic planning process for this year that we wanted to start pursuing acquisitions in this vein, and it’s been a whole long process of looking for the opportunities,” McDermott said.
The purchase of both businesses will be finalized this month. Purchase prices were not disclosed.
“There’s a great deal of overlap between their existing customers and the people we deal with,” McDermott said. “We’re a family- and community-based organization and Round Table is very much a family restaurant. And with Paradise, a lot of the customers are people we already go to for our shred and records business.”
CI already owns two businesses and has owned others in the past, including a commercial laundry, wood shop and thrift store. It currently operates CI Shred, a document destruction business, and CI Information Management, which offers record storage and digital image scanning.
“We consider ourselves to be a social enterprise. We don’t just rely on traditional nonprofit funding sources; we actually operate commercial businesses to help fund our mission programs,” McDermott said.
Those mission programs include employment services, specialized job training, career opportunities and centers for social enrichment and community resources. CI’s primary client base are people with disabilities or other “life barriers.”
A plan is in place to expand the nonprofit’s current services, along with an actual expansion of CI’s building on South Dayton Street, near Kennewick High. The expansion will create a Community Resource Center, which McDermott described as “an ombudsman for a whole variety of benefits and services.” This will include computer kiosks and an expanded reception area for intake appointments.
“We’ve found that when people start their journey the right way, so they know what the resources are, what the requirements are, what might apply to you, what might not apply to you, what insurance might be available to you, whatever services, whatever benefits, that kind of thing, if we get them started off right, it makes a huge difference,” McDermott said.
A stable funding source to support the Community Resource Center is where Round Table and Paradise Water come in.
“These two in particular were companies that we basically found through networking,” McDermott said.
Round Table owner Chuck Stack said his wife, Gayle, learned of CI’s desire to buy a business through her connections as owner of EverStar Realty. “She said, ‘Get in the pizza business,’ ” Chuck said.
After buying his first Round Table Pizza in Pasco 31 years ago, the 63-year-old Chuck said he was ready to sell.
“I’m wanting to retire while I’m still young enough to enjoy all the things that we have. I don’t want to be one of those guys that sells my business at 75 and dies at 76,” he said.
The Round Table franchise hadn’t been listed for sale at the time.
“We got together and agreed on a price and I said, ‘Yeah, I’d love to sell,’ because I was thinking about it anyway,” he said. “Now we had an actual buyer that was qualified. I hadn’t looked at selling in the past.”
It was a similar story at Paradise Water, which also wasn’t listed for sale, but was identified through networking.
“For a sale to happen, it was imperative for us to find an organization that had a similar ‘family business’ atmosphere and value for both our customer base as well as our employees, and who was also involved in being active in our community. We found this in Columbia Industries and knew right away that this was the perfect fit,” said Jordan Hays, general manager of Paradise Bottled Water Co.
CI hoped to close the sale of Round Table in early July but the deal was held up by the approval process for a liquor license from the state to continue selling beer and wine at the restaurants. The purchase of Paradise Water also was set to be completed by mid-July.
All parties expect customers won’t notice a difference as ownership is handed from one to the other.
“It will be business as usual as far as the actual operations and we’re going to try to take it to the next level,” McDermott said.
“CI is a great organization,” Chuck said. “They want to grow the business. They don’t want to stagnate and just run four restaurants and glean the profits off them. They want to grow these and it will be interesting to see how well they do.”
Hays agreed, saying, “I look forward to the continued success of Paradise Bottled Water and see great things to come with the infrastructure and community care that Columbia Industries brings to the table.”
Operating and growing the businesses would allow CI to advance its current mission, which includes serving about 250 to 300 clients yearly, with a goal of touching upward of 1,000 people through the new Community Resource Center, targeted to open this October.
“We want to make sure we can pay for all this stuff. The whole idea is we want to expand our mission services, and we need to find ways to support those mission services. We’ve got a successful formula with running commercial businesses already,” McDermott said.
This month, CI is graduating its first class from a new program called Opportunity Kitchen, a 12-week food service vocational training program.
“We take persons with employment barriers. And that can be our traditional clients with disabilities, or it can be low-income people or people who have mental health issues or possibly rehab from addictions, and we basically put them through this course, and by the end they are fully qualified to work in virtually any restaurant, catering, contract kitchen or hospitality environment,” McDermott said.
This could mean Opportunity Kitchen graduates may eventually be employed at Round Table, but neither business purchased this month will exclusively employ CI clients.
“We run these businesses as full-on, competitive commercial businesses,” McDermott said. “So if there are opportunities to place people in them, obviously we will do that. It’s a fine balance you have to strike between creating specific, direct opportunities, but if you’re counting on it for funding, you still have to be competitive. Your customers still want you to do all the right things at the right prices.”
Making customers happy has been Chuck’s mission for decades and he admits it’s bittersweet to let the business go, though he will retain ownership of all four buildings, which CI will lease back from him.
Chuck’s first restaurant was in Chapter 11 bankruptcy when he bought it. “The Pasco store now does as much volume in one weekend as that store did in a whole month. When I first bought that store, I ate a lot of macaroni and cheese and Top Ramen because I had to pay employees, I had to pay rent, and now that store has paid for the growth of all the rest of them, so it’s kind of tough to let it go,” he said.
McDermott said CI respects the hard work the current owners put into their businesses.
“They’ve really done a great job to establish these businesses and now we get to bring them aboard and have them help us with our mission, and that’s really neat,” he said.
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