Never, Never, Never Give Up: Karl Schledwitz’s Billion-Dollar Journey Through Adversity | Manufacturing Series

Anthony Codispoti  : Welcome to another edition of the Inspired Stories podcast where leaders share their experiences so we can learn from their successes and be inspired by how they’ve overcome adversity. My name is Anthony Codispoti  and today’s guest is Karl Schledwitz, Chairman and CEO of Monogram Foods. Founded in 2004, Monogram Foods is a Memphis-based company dedicated to manufacturing high-quality protein snacks, corn dogs, pre-cooked bacon and other ready-to-eat products.

They focus on innovation and a people-first culture, aiming to deliver continuous growth for customers, team members and communities. Under Carl’s guidance, Monogram Foods expanded operations to 12 plants across seven states, grew its workforce to over 4,000 employees and reached a run rate of more than $1 billion in annual revenue. In 2004, Carl co-founded Monogram with five employees in the purchase of two local brands from Cerelli. Over the past 20 years, Monogram has enjoyed 30% compounded annual growth. Before co-founding Monogram, he gained extensive leadership experience in various entrepreneurial ventures. Carl has started three different companies that have made the Inc. 500 fastest-growing private companies list. His commitment to strategic growth and employee well-being has helped garner recognition for Monogram as one of the fastest-growing private companies in America. Before we get into all that good stuff, today’s episode is brought to you by my company, Add Back Benefits Agency, where we offer very specific and unique employee benefits that are both great for your team and fiscally optimized for your bottom line. One recent client was able to add over $900 per employee per year in extra cash flow by implementing one of our innovative programs. Results vary for each company, and some organizations may not be eligible.

To find out if your company qualifies, contact us today at addbackbenefits.com. Now back to our guest today, the co-founder and chairman of the board of Monogram Foods, Carl. I appreciate you making the time to share your story today. Glad to be on.

All right. So before we talk about present day, I’d like to hear a little bit about your path before Monogram. Went to college, got a law degree, and a license to practice law all the way back in 1978. When did the entrepreneurial bug first bite you?

Karl Schledwitz : Well, the entrepreneurial bug bit me when I was a teenager, and my father, who passed when I was 18, was an entrepreneur himself. And so I think that might have been part of the genes that he passed on. But I mean, I remember when I was in Boy Scouts, the first time I went to Scout Camp, everybody wished they had candy bars and stuff, which they didn’t sell at the commissary. So the next year, I took a locker box full of candy and set up a sign and sold candy, you know, to a fellow, and I had a captivated audience to the fellow troopers and would not be going and doing all the stuff because I was running my camp hours, tent hours, and made tons of money. And when I was in high school, I’m so much older than probably most of your audience. But when integration hit in the late 60s, public schools here in Memphis, they stopped allowing schools to have school sponsored proms and homecomings. And obviously, the fear was that if I got a black man, my dad’s were the white woman or vice versa, so they just banned having school sponsored dances. So a friend of mine and I, a woman classmate, we started a company and we would go to the schools and independently, obviously, not with school sanctions, and we would throw school dances and homecomings and charge admissions and made money. And both she and I paid our first year of college for the money we made for two years running proms and dances and stuff for other schools, including our own. So I’ve been an entrepreneur a long time. I worked through college and through law school, not so much for entrepreneurial, but I worked full time through both. Because as I said earlier, my father passed when I was a freshman in college. So part of it was that a necessity.

Anthony Codispoti  : But so it’s interesting. Oh, it’s been just yet you spot you spot an opportunity and you go for it. People who wanted candy bars, you brought candy bars the next year.

That’s right. There are high school kids who still want dances. You guys put on the dances and you charge admission. Did you get any blowback from the school or the community in setting those up?

Karl Schledwitz : Yes, we were a little aggressive at the time. Lickr by the drink was had just come into passage and it was the legal age at that time was 18. And so we had we made more money on our bars than we did admissions. And I don’t think there was a lot of checking IDs at the time. So the blowback was really from parents receiving their kids coming home and liberated. So that was how we got through that without any liability is amazing. But I guess all the statues have run for 50 years.

Anthony Codispoti  : So we’re free to talk about it now. OK. OK, so when did you start? I’m going to call it sort of your first big boy business post college, or maybe it was even during college.

Karl Schledwitz : No, it would have been. Post college, I. I work full time through law school. I actually ran political campaigns. And worked in presidential campaigns and statewide campaigns. And I did that for a few years, including my first year at a law school. And then I started a law practice and didn’t really ever want to be a lawyer, but didn’t know what else to do. And so I started in my law practice, syndicating properties because I didn’t have any money.

And so I didn’t have any credit, but I would see a piece of property and I would go get 10 people to put up a thousand a piece or 2000 a piece and syndicate it, manage it. So I started doing real estate deals, which I still to this day do. And I actually found a niche that is really kind of the basis of what we built monogram on 30 years later, which is I would go to the banks and and deal with their trouble loans. It’s funny how banks have an apartment that they call special assets and special assets are trouble loans and would try to identify workout situations where I could come in and take over a troubled loan and and work it out. So I started doing that contemporaneous with my law practice.

Anthony Codispoti  : And those were specifically for real estate or was it to take over like an entire business?

Karl Schledwitz : Well, both. I did better on real estate. I took over a couple of convenient stores one time, a liquor store one time, a beer distributorship, most of which didn’t work to be candid. But I later on, I just laser focused on real estate, but in the beginning, I did a prolifer of stuff that the banks will give away problems. The the issue is, can you solve the problems? Which I didn’t really have the operation experience to do what I was doing and and it bit me.

Anthony Codispoti  : And you said that this was something then that you sort of this idea that you relied on 30 years later to start monogram, were you buying distressed businesses at that point? Or was that you’re still sort of leveraging it to buy real estate that you used?

Karl Schledwitz : So when when we were when we started monogram 21 years ago, we were buying. What we said, somebody else’s problems. And so we built the company the first 10 years buying underutilized assets, which in this case were manufacturing facilities that weren’t full. So when I was raising money, I used my real estate background. And I remember I took up a picture of a strip shopping center that was two thirds vacant, all vacant signs up. And then I photoshopped and said, OK, if you turn those vacancies into tenants, grocery store, credit union, barbershop, nail salon, whatever, you take that exact same piece of real estate if it’s full of vacancies, you can’t I pop out, you can’t borrow against it.

It’s it’s got a negative value. You fill it up with credit worthy tenants and instantaneously, it’s worth exponentially amount more. So we were going in the first 10, maybe a little longer than that, going and buying factories that were 50 percent or more vacant. And the parallel that I would talk about is the tenants that we would go get would be our co-manufacturing partners are our major retailers that we were doing private label for, whether it be Kroger or Wal-Mart or the Conagras or Tyson’s of the world. And just like when you’re redoing a shopping center to take a vacancy and attract a tenant, you typically do tenant improvements. You you change the facade, you you you finish it out and you make it attractive for someone to come and want to lease that space. Well, what we would do is in these factories that were over half vacant, that when they’re over half vacant, they have the overhead is greater than their revenue and so they’re losing money, typically. And you fill that plan up and it changes. But the tenant improvements we would do is go buy new equipment, automate equipment that would allow us to go get a private label or retail customer because we could be competitive. It was the latest, greatest way to make corn dogs or to assemble sandwiches or sliced bacon. And. So our tenant improvements was was the equipment and.

Anthony Codispoti  : And so was it hard for you to get the clients then that to sort of fill this new capacity?

Karl Schledwitz : Well, sure, it wasn’t easy. I co-founded this company with a gentleman named West Jackson, who he’s younger than I by about 10 years, but he had spent his entire career in the food industry. So he had a very good Rolodex and a very good reputation that opened a lot of doors. And that’s, you know, half the people we hired early on were people that he had dealt with earlier in his career. And so that’s how we got a lot of doors open.

Anthony Codispoti  : So this is Monogram’s, the third company that you’ve had on the Inc. 500 list, right? What were the other two? How did those come about?

Karl Schledwitz : Well, the first one was a chain of pawn shops. I had. In my legal career, I had a client that owned a pawn shop. And he called me one day, he said, I got to sell the pawn shop and I need you to get it, get it out of my name.

And I said, well, why? And he said, well, I’m I’m applying for a new bank. And I said, well, I’m part of a group that’s starting a new bank and we got an application to the FDIC for approval.

And I think it’ll look bad for me to have had a pawn shop own a pawn shop while I’m applying for a new bank charter. And I said, well, OK, let me see if I can help you sell it. And I said, when do you when do you have to do it? He said, by Friday.

And this was like on a Tuesday. I said, well, you know, we don’t have a book together. We can’t sell it that quick. He said, he said, well, I want you to buy it. I said, well, you know, I don’t have any money.

So well, I’ll finance you. So within three days, I owned a pawn shop and I later. Sold it to a public company.

There was actually three public companies at the time that owned pawn shops, New York Stock Exchange companies. And I met a young guy that was 30 years old, that was an accountant by training that had been an auditor on the pawn shops and then had gone to work for this chain. And I was so impressed with him. And he is an entrepreneur extraordinaire. His name is John Fedford.

He’s written several books and is a speaker. He’s now started five different chains. But I was so impressed with him and he said, hey, I’ve got a dream of replicating and I can do it better than this company I’m working for and start pawn shops. And I said, well, I could raise the money. That’s what I did was raising the money.

And so he quit and we raised the money to start a chain of pawn shops. And we grew it to maybe 80 or 90. And about two thirds of them were DeNovo where we would start from scratch, Greenfield. And about a third were acquisitions. And my role was raising the money and helping and he too, he was the operational guy and had all the systems and knowledge. And I still talk to him regularly and he’s on his fifth, he has opened up and started over 500 pawn shop chains. And that would have been in 1981.

When we started the first one. You know, the biggest myth in pawn shops is people think that it’s where people take stolen merchandise and get an advance against it and never come back. The reality is the pawn industry is the bank for the unbanked, the painter who, when he comes and gets a chance to paint your house, the first thing he does typically says, had in a thousand dollars deposit so I can go buy the paint and stuff and upfront and then you paint the rest at the end.

Well, the reality is a lot of times he’s taken that thousand dollars to go get his ladders and stuff that he’s pawned out of Hock because he didn’t have a job in between and he had to keep living until he got another job. So we used to conduct a pawn shop IQ test and we would ask four questions when we were raising money to investors. And the first was, what do you think the average size of a loan is? The second question, I still remember this from 30 years, is what do you think the average interest rate that we charge is? Third is what percent of the merchandise do you think that a pawn shop gets identified as stolen? And fourth, what percent of the people come back and pay off the loans?

So Mr. Podcaster here, I’m gonna ask you, what do you think the answer to that question is? What do you think the average loan price is? How many loans are redeemed?

How many people come back and pay them off? What’s the interest rate? When we were raising money, we would go to investors and we had four questions. We called it the pawn shop IQ test. What do you think the average loan in a pawn shop is? What do you think the average interest rate is? And what percent of the loans do you think are identified as stolen, merchandise, and redeemed by the police? And fourth, what percent of people do you think pay off the loans and come back and redeem their property?

Anthony Codispoti  : So. Okay, so I’m gonna say the average loan value is $200. Okay. I’m gonna say the average interest rate is 19%. The percent reported as stolen, I’m gonna say is 10%. And the percent that’s actually paid off, I’m gonna say is 30%. All right, so Anthony. How’d I do?

Karl Schledwitz : You failed miserably, but you’re consistent with virtually everybody that took the test. Okay. So first, and some of this information’s a little dated, but the average loan, you’re pretty close. Back 30 years ago, it was 100, it probably is 150 or more now.

Most everything in a pawn shop is electronics, TV, being a big part, our computers, our jewelry. And what surprises everybody is what’s the interest rate and what’s the redemption rate. The interest rate varies from state to state, sometimes community to community, but on average, it’s 240%. Oh my God. So it’s 20% a month. And so everybody says, oh, that’s so luxurious, but let me walk you through how it’s not. The average loan’s $100. So I’m a pawn shop.

I take your ladders or your TV, I have to store it, insure it, I have to send you notices. So the average bank will not make a loan for less than $5,000. And they will tell you that their typical cost of setting up a loan on the books is $50 to $100. So if I was only charging 19%, which is what you said, which is $19 a year, I would be lending you $100 loans, securing that and only making $1.60 a month.

And I’m having to send you notices and stuff. 50% no, the math would never work. The reality though is for $20, it works for both sides. You can come back and you have now made an unsecured, non-recourse loan, I mean a secured, but non-recourse, there’s no recourse, and you can pay $120 and you can get your TV and everything back and you’ve used that $100 in the interim to make your house payment, your car payment or whatever, in between jobs or whatever. So as a result, because this is the industry that’s taking care of the cash constrained consumer, 80% of the people come back and pay off their loans. 80%. And then the other thing that blows people’s mind is less than one half of 1% ends up being stolen. So first of all, you thought 30%, but just think 80% of the people are coming back and paying off the loans. Well, if it was stolen, you wouldn’t come back and pay it off, right?

So now you’re just talking about the 20% at the fall. But if I broke into somebody’s house and I stole their TVs, tomorrow I could go sell it at any flea shop, I could put it on any social media site to sell, I could take out an ad in the newspaper and sell it with nothing. If I go to a pawn shop, which most of your listeners probably haven’t, but when you go to a pawn shop, and most locales are this way, you are fingerprinted your name and your ID with that TV and the serial number and it’s turned in daily to the police. Well, the only place that I would ever have my name and fingerprint and ID identified with that solar merchandise is a pawn shop. If I sell it at a flea market or online or whatever, there’s no tracing. So that’s the last place I wanna go.

So as a result, it is not what the perception of what it may have been 40 or 50 years ago. So we got way off into pawn shops, but I raised tens of millions of dollars to start that pawn shop chain by getting people to fail the test just like you did at, and then they get intrigued and then they, their eyes light up and go, I’ll eat it 240% APR, I’m gonna make a killing. The reality is the three pawn shop chains that are public, they do very well, but it’s not what you would think.

Anthony Codispoti  : And it makes more sense when you explain it like that, Carl. A loan has what I’m gonna call a significant amount of sort of fixed cost in it, right? And that kind of gets washed out in a larger, more traditional loan so that the interest rate doesn’t seem so high. I think in a pawn shop loan, if you were to sort of chunk out like the fixed fee, right? And then charge like a more normal interest rate, it would still be the same sort of net cost to the user, but it wouldn’t seem to use your word so usurious, right?

Karl Schledwitz : And that’s why the public pawn shop chains returns are comparable to banks. Because the dynamics of that are what you just said, there’s so much front end cost of putting the money out. So anyway, that was my first major deal. There was a…

Anthony Codispoti  : Hit the Inc 500 fastest growing list. Yeah, it got up to number…

Karl Schledwitz : Well, anyway, it was in the top hundred at one time. And then I met through that, John Thedford introduced me to a gentleman and he’s now passed Ed Stanko was his name and he was in the rent to own business. So rent a center is Aaron’s rent, you would think about.

And it’s the same customer many times that’s in the pawn shop that the three C’s that cash constrained consumer. And so that was something else we started. We opened up 90 something rent to own centers along these coast and called rent right. And we later sold it to rent a center, which was a public company still is. And that got up to be in the fourth, number four on the Inc 500 list one time.

Anthony Codispoti  : And so am I seeing, is there sort of a pattern of Carl is the guy that knows how to raise the money and then he partners up with people who understand the operational side of that business?

Karl Schledwitz : Yes, absolutely.

Anthony Codispoti  : And what made you so good at raising money?

Karl Schledwitz : Good question. Perseverance is one thing because you get told no to a lot. We used to have a joke and then when we were raising money for the value pawn in the beginning, I think we raised $5 million. But we used to say we raised 80 million the problem is we only collected five, because we would get so many commitments and then they wouldn’t come through or whatever. So you gotta be persistent.

You’ll hear this probably throughout this podcast. My signature line on my emails to this day is still the same as never, never, never give up, which is a Winston Churchill quote from World War II. If you look at my wall, which you can’t see up on that wall, it’s there, if you go to my house, then never, never give up. I modified it.

If you go to my wine cellar in my home, it says never, never, never give up drinking red wine. It was just with my name by it because everything else is just still plagiarizing, not plagiarizing, it’s just the Winston Churchill quote. So being persistent, having a good story and making it a story, when you’re trying to get people that have money to write a check, you only have their attention span for a short period of time and you’ve gotta be different. And for me, the pawnshop IQ test was a difference. For me, that showing the picture of the vacant building and telling the story of how we were gonna grow monogram by filling up stories that could relate to it and visualize and see it. So having a good pitch and working it and being prepared for it. And being. Where did you learn that?

Anthony Codispoti  : How did that come? You just born with it?

Karl Schledwitz : I don’t know. That’s a good question.

Anthony Codispoti  : I mean, some people like that’s just how their brains are wired. Maybe they just, they see that.

Karl Schledwitz : And it’s. Well, my dad was retired from the Navy, Chief Petty Officer. He was a, you know, and he sold insurance and first he sold pianos and then he sold insurance. And, you know, so he was pretty innovative. I think I’ve learned from him a lot.

Anthony Codispoti  : He was a pretty good salesman. Yeah, he was a great. He taught you some things before he passed.

Karl Schledwitz : Salesman, like I say, I was a month shy of my 19th birthday. When he passed away at age 48. So I didn’t have a long story, long history with him, but.

Anthony Codispoti  : Maybe some of it came about as just necessity. You’re a young guy and you’ve got it. You’ve got to figure out a way to earn pretty quickly. Right. Yeah. There’s some truth to that. Yeah. So let’s see. You guys purchased and relaunched the King Cotton and Circle B brands from Sarah Lee. Tell me how that came about.

Karl Schledwitz : Well, once again, when you get a reputation that you can raise money and you invest in businesses and real estate deals, you get a pipeline of referrals. And there was a guy that had started Monogram a year or so before we came along in 2004. And he was actually doing something entirely different. It’s hard to believe, but in 2004, 2003, a company like Sarah Lee did not have a dot com.

You could not go online and buy a Sarah Lee cheesecake. That was only 23 years ago, but it was at the forefront. And this particular entrepreneur had come up with an idea to take advantage of Memphis being home of FedEx, which at that point would not true today, but in 2003, if you sent a FedEx package anywhere in the world, it came through Memphis.

us. And so it was a good distribution point and so he went to Sarah Lee and said, hey, let me be your distribution arm. And he also had a gifting idea, which once again, he was a little ahead of his time, but he said, okay, copying the Harry and David’s or Omaha Steaks, he was going to have the Sarah Lee cheesecake of the month, all kind of ways to sell Sarah Lee products. And he was very active in some people called the trinket and trash industry, others call it specialty advertising. But you know, when you get a baseball cap with the name of your insurance company or a ballpoint pen or a ruler or whatever. And he was big in that network and had Kroger is one of his big customers and others.

And he came up with an idea hence the name monogram to go to a business. What’s the name of your insurance company again? Addback benefits. Go to add back benefits and say, okay, Anthony, every time you sign up a new customer, send them a thank you gift, which would be a box with a cheesecake in it. And it would be monogram hence the name on the front. Dear Bill Smith, car dealership, you know, thank you for your business, you know, Anthony add back benefits and the box would be monogrammed, be shipped out of Memphis FedEx next day, you get it, the business. And we’re going to get these specialty advertising people to have another thing to sell to their businesses, beside ballpoint pens and baseball caps. But here’s a thank you gift that you can send out every time you get a new business or if you’re something a little more unusual, which is more of an impact.

Yeah, you can get a every time somebody buys a house from your gives a listing with you. And so he had gone to Sara Lee. And they were intrigued and they had lent him some money to get this business up and going because they saw the benefit of it.

And he never could raise money. So he came to me and I lent him a little money while I had an option to buy it. And I met West Jackson, my co founder. And I thought he was the sharpest guy I’d ever met. And as an operations guy, coincidentally, his wife was from Memphis, he grew up in West Tennessee, he was living in in Cincinnati, where Sara Lee’s meet headquarters were at the time.

And he too had an entrepreneurial bent. And I said, when I’m thinking about taking over this little company said, Well, I don’t know if all that stuff will work. But I will tell you, Sara Lee is getting out of the regional brand business. And they’ve got two brands that I used to run in Memphis Circle B and King called King Cotton at the time. And you buy them on very reasonably and I could come down and run them.

And once again, I found my operator and so I went and raised the money to buy these. They weren’t troubled assets, but they were heavily discounted. They were off strategy. For Sara Lee, they only wanted to do national brands, Jimmy Deans and ballparks. And so they were getting rid of their regional brands. And so it was off strategy for them bought them at a discount. We started with five employees. We gave all of the gifting ideas we didn’t take. Larry Malone kept that none of that work for under his

Anthony Codispoti  : it’s it’s hard to do customize things like that, especially food at any sort of volume, I would imagine. Right. So now you guys had a different strategy. You had these brands that had some regional sway. Right. Let’s put those into the production pipeline. Use West’s operational expertise and see what we can do. And then the next year we

Karl Schledwitz : we met the Sara Lee people from buying that that was in their disposition, the equivalent of their special assets. And they had a factory in Chandler, Minnesota that they had bought four years earlier, intending to turn it around and get in the meat snack category. And they had paid 25 million for it. They were losing money.

They had changed their minds. It’s a little side note. It’s got a little bit of interest, but they were going to roll out Jimmy Deans jerky. And they thought that was a good category. That’s what they bought the plant for. It was going to become a Jimmy Deans jerky plant.

And they did some focus groups and studies. And they decided instead of putting Jimmy Dean in jerky, they would put him in the breakfast category on steroids. They had already had the Jimmy Dean sausage, but they decided we’re going to make him all breakfast. And we’re going to try to own the breakfast category. And by golly, they did.

You know, you see all the Jimmy Dean egg products and, you know, and to this day, Jimmy Dean sandwiches and etc. And so now they bought this plant that they didn’t have a use for it’s losing money. So we bought it from them.

Once again, the plant was less than half empty. It had 110 employees in it. This is 2006. We paid 9 million for it. They had paid 25 million for it in 2001. And we filled it up. We’ve got other business to go into it, other customers. And then we kept replicating that.

Anthony Codispoti  : Now, we say you did that multiple times. And that time is it like a distressed or an undervalued asset that you’re acquiring? Yes. Yes. That’s your specialty. You look for something that you can get a deal on?

Karl Schledwitz : That was this. That was the specialty for the that was the strategy the first half of our 21 year journey. The last 10 years is not been that. We have been trying to not buy distressed assets. They take so much time to turn around.

And once you get to a certain critical math, math, it makes it hard. So we don’t rule it out. But we don’t, we don’t really look at distressed assets anymore. But it bode us well. It was the right strategy for the time.

Anthony Codispoti  : It was a great way to get you started. Right. And now, and then once you got sort of to that halfway point, you stopped looking for those value assets, those distressed assets, were you then starting your own locations from scratch? Or were you still doing acquisitions?

Karl Schledwitz : A combination, but more organic growth than acquisition growth.

Anthony Codispoti  : And so how would you describe the landscape of products and services that Montagram offers today?

Karl Schledwitz : So we have a billion five revenue and it’s divided into three divisions. One is bacon, which we have two plants. One cooks the bellies and slices raw bacon. The second plant gets the bellies from that first plant and makes pre cooked bacon. So if you were to go into and I’ve got to be careful because our customers don’t like us telling their name, but we would recognize some of these brands. Yeah, if you went into one of these national coffee chains or fast food chains, many times we’re providing the pre cooked bacon that goes on their sandwiches. And if you go into a retail store, we might be making their private label. And the other thing we do is co-manufacture. So we make product for other people’s labels. So if you look at any of the public companies and we do business with most of them, but if you look at the Tyson’s, the Hormel’s, the Conagras, you’ll see that they, depending on the company, they’ll make anywhere from 50 to 90% of the products they make themselves, but they will have other people make 10 to 50% of what they sell.

Anthony Codispoti  : Why is that? Why do companies use that strategy? Why not keep it all, why not one extreme or the other? Keep it all in house or farm it all out?

Karl Schledwitz : Well, there’s a variety of reasons. One is let’s say company A has a small amount of meat snack business or they’re gonna, they’re gonna try to get in meat snack. They can’t justify having a factory for that small amount. So they’ll co-man and they’ll be at a factory that’s got 10 other companies doing it. Another is speed to market. Sometimes you say, hey, we’re gonna come out with a new frozen appetizer product.

We do this all the time. Well, they don’t, it takes 18 months to build a factory. And so if they don’t have a factory that can do it, they’ll have somebody else do it, speed to market, innovation, uh, economies of scale.

Now more and more of times they’re doing it because they want the capital investment to be off their balance sheet. Uh, and so there’s a variety of reasons, but it co-man is growing more and more of the big companies are having more of their portfolio co-manufactured by somebody else.

Anthony Codispoti  : Do they typically just do that when they’re starting up a new product line? And then if it’s successful, they’ll try to bring it back in-house to get some more economies of scale? Not necessarily. Once it’s running smoothly with Montagrand, like let’s just let them keep running with it.

Karl Schledwitz : And, and, and they also want redundancy. So for example, uh, we, we, we make a corn dog for, for a national brand and they have their own corn dog plant, but they don’t want everything under one roof. They like the, the, the, the safety and security of having a secondary location. So that, that can sometimes be a benefit and, and then it can flex too, you know, so if you, if you are running promotions and you’ve got more demand than your factory handle, having a secondary location that can flex, uh, can be a benefit. And so there’s, there’s a lot of reasons.

Anthony Codispoti  : Yeah, that makes sense. Carl, what is it that you guys are doing so well? I mean, obviously there are other companies out there that provide similar services. What sets you guys apart?

Karl Schledwitz : You know, uh, you hear this so many times that it, you know, it, it can become cliche or pride or whatever, but I truly believe that culture is our secret sauce.

Uh, we have a never give up attitude. We try to put the customer first. Uh, we try to have a reputation that, that, uh, of doing what we say.

We call it candor done right. A kind of Southern globalism of, of, you know, and so we, we, when we get with a customer, we grow with that customer. We got a great track record because they get comfortable with us.

They can depend on us to do what we say. Uh, food safety is critical in this space. You can imagine if you’re, uh, uh, and I’ve already mentioned it just so example, we don’t do any Jimmy Dean product. So I don’t want to do it, but if you, if you were Tyson and you own the Jimmy Dean brand, uh, you know, it’s a, you know, they got a, it’s a billion dollar brand. And they don’t want just anybody touching that brand.

Anthony Codispoti  : They don’t want their, they don’t want their name associated with some sort of a, you know, a Listeria outbreak for example.

Karl Schledwitz : Right. So food safety is critical and, and, and food quality is right up there as well. And dependability and, and so there’s just, you’ve got to build reputation up and so.

Anthony Codispoti  : So with so many employees, I mean, you’ve got a few thousand employees spread across several different locations. How, how do you instill and build that culture across such a, a, a diverse set of workers?

Karl Schledwitz : Yeah. So it’s, it’s something that’s an everyday project. You know, you, you start with communications and, uh, you know, you, you’ve got to have constant communications and you got to have an air of transparency.

Your team members need to believe what you say. And, and, uh, we try, we have a, a goal not to have any secrets, uh, our surprises. And, and so I, you know, I tell people this isn’t, you know, bad news is not like wine.

It doesn’t age well. You know, it’s better to get the bad news out and get it over with and, and let everybody know because if it’s held back, then people think, well, what else are they holding back or, uh, and, you know, it’s, then it becomes a surprise. So, uh, try to be no secrets, no surprises, constant communication, uh, and getting everybody to, to believe in the values.

We have behaviors that we value and they’re, they’re not just on placards, which they are everywhere, but we start meetings out a lot with them. You know, uh, one of my initial shareholders still is one of my largest shareholders, uh, started the company, Pet Hyde started the company, Autozone, and he had his grandfather and actually started a food distribution company and, uh, called Malone and Hyde. It was the second largest in the country or the world. And they, uh, asked Pet, he was an original, still around Mr. Hyde is, and he was a founding initial board member of Sam’s and Walmart’s. And later when Walmart started getting into food business in the beginning, there wasn’t food in Walmart stores. Pet Hyde had to resign because now he’s a competitor and he looked at what Sam had done and gladly in his books that I copied his ideas, which started Autozone because if you go back 30 years, the auto repairs and auto parts stores were all mom and pops. And it was a very fragmented industry, just like the pawn shop was a very fragmented industry and, and, and few chains came in with the auto parts was a very fragmented industry. And he wanted to streamline it. Well, he took all of the warnings that he had from Sam’s and including the wearing the uniforms, having the, having the pledge and having the charge in the morning meetings.

And so he borrowed all of that and I’ve tried to borrow that from him and, and Autozone and you go to our offices here in Memphis. We try not to ever call ourselves a headquarters. We call ourselves the support center.

If you go to Autozone’s office building downtown Memphis, it’s called the store support center. They don’t want to be thought of as the ivory tower or the headquarters where decisions are being made and, and shoved down into the stores around the country or in our case, the plants around the country. We wanted to think, Hey, we’re here to support you. We started our meetings out reminding everybody in the support center here that if it wasn’t for the hardworking men and women working in much worse conditions in, in, in plants, temperate weather or temperate temperatures and that are doing manual labor, we wouldn’t have a job. We’re here to support them and we want that mentality. Now it doesn’t always work that way, but you got to start that way. So it’s constant, never ending.

Anthony Codispoti  : I like that. You know, you see another company that has a culture that you want to emulate. And so you learn from them, right? You’re not trying to recreate the wheel. What can, what can we borrow? What lessons can we pull from there that we can institute for ourselves?

Right. So I want to shift gears on your for a moment, Carl, and ask you about a serious challenge that you’ve overcome in your life, whether it’s personal, professional, maybe a combination of the two. What was it? How’d you get through it? What did you learn kind of coming out the other side?

Karl Schledwitz : Well, I’ve had a lot. I would start when I was a freshman in college and 18 and my dad passed away and my mom was not in the workforce. And I had a sister that had just graduated from college. So I had to start working to pay for college and help my mom.

And I learned a lot there in that quickly. And when I got out of law school, in college, I’m once again older than most of your audience, but I was an anti-war protester in the Vietnam War. You know, I’ve organized protests around the country and marched and more protests than you can shake a stick at. My hair was shoulder length and I was a professional protester is what some people would say. But I got involved in politics through that process registering students to vote and getting involved in political campaigns and working with labor unions and the like and continued that through law school and managed campaigns in law school.

And right after and result of that in 80 when I graduated from law school to 78, I managed a campaign for a year and then started my law practice a year later. And one of my first clients was a local congressman here. Your viewers would recognize his son if you watch Fox, Harold Ford Jr. because he’s the the lone Democrat on Fox News, the number one watch program in America, absent sports. And his father was a very prominent congressman.

He, Jr. obviously later succeeded him. And the one of the campaigns I’d run was the Butcher campaign for governor and he lost and then later get had his banks go under and I was doing legal work for the banks. I was doing legal work for the congressman.

And next thing you know, I get caught up and the congressman gets indicted and I get indicted as a COVID spirit or because I’ve been his lawyer closing his loans. And that started in 83. First indictment was 86. One trial lasted five months. One trial lasted three months. I went through three trials. I was facing 110 years of prison. And so I went through some rough times and then in 80, it’s still going on in 85, my wife gets diagnosed with a terminal disease that fortunately was a misdiagnosis.

But we went through months of thinking she only had two years to live. So I’ve been through some adversity. You know, my mother used to say adversity builds character. And I finally told her, I said, we’ve got enough character.

I don’t need any more adversity. And so I’m literally, I took my fundraising talents, whatever I had them and raised money for my own legal defense. I mean, I had to spend, you know, my lawyers were on my case 16 years. So from 83 to 99, I was fighting my legal problems while at the same time I was building businesses. And in a very high profile legal situation with a sick wife. So never, never give up was, vote me very well. You’ve got some battle scars.

Anthony Codispoti  : I do have battle scars. Yeah. So you’re building businesses, your wife gets a terminal diagnosis. Fortunately, later proved to be incorrect. But in the moment, that’s what you’re believing it to be. And your, your names being dragged through the mud, you’re, you’ve got these court cases going on. Like any one of these things is enough to like fully consume or occupy or bring somebody down. What were your sources of strength during these times? How did you get through all of this chaos?

Karl Schledwitz : Well, I, I remember my father was a disciple of now forgetting his name, Carnegie, and the power of positive thinking. And I read that book in high school and in college.

And, and my father used to take those motivational quotes and put on his bathroom window when he shaved in the morning. Cause he, he said, I got it. I got, he knew he had to knock on 10 doors for every potential life insurance sales he made, you know, and it, it, it, it isn’t easy.

He would say coming home one day where you knocked on 13 and you got 13 no’s. And so he was, he was believed in the power of positive thinking. And he preached that, uh, the Dale Carnegie and all of the, uh, I’m forgetting the name Dale Carnegie courses, but also whoever was the author of the power of positive thinking. But so I would like to think that I kept my commitment to positive thinking throughout all of it. I also had a goal to never get bitter. Uh, you know, it would have been easy to hate the prosecutors. Uh, and I used to always believe that if you let bitterness sink in that they had won. And so I was always trying not to be bitter at, at those, uh, who I was going up against. Uh, but hey, listen, it’s the power of positive thinking. And I think, uh, uh, it’s something that you can learn.

I don’t think it’s, uh, given that it’s just something you inherit. Uh, no, we all know we don’t like being around negative people. Uh, so one of my things that I’ve told people as I’ve tried to build these businesses is I don’t want to hire anybody with a negative attitude.

Uh, and, uh, if I do, I want to get rid of them quick. Uh, the, I think it was Rick Patino, uh, used to talk about building his basketball teams. He called it the, he called it the brotherhood of the miserable, you know, if he got a basketball player with a bad attitude, you know, it’s like cancer, it grows. And so you got to cut it out. You’ve got to get rid of that person. Uh, so positive energy is, is, is one of the behaviors that we value at monogram. And we, we say if we got somebody with a negative attitude, let’s get rid of them.

Anthony Codispoti  : Norman Vincent Peel is the, thank you very much.

Karl Schledwitz : I’m sorry. My father was a Norman Vincent Peel disciple and I actually went to New York and heard him preach a couple of times because he had his, a church and, uh, but, uh, I never, I never heard him speak, but it don’t invincible. Thank you.

Anthony Codispoti  : And I love what you said there. You know, the power of positive thinking, it can be learned. I think sometimes we fall into this trap of like, oh, I’m just naturally an ornery person. I’m naturally, you know, pessimistic and I’m just going to, I’m stuck to be this way. That’s how God made me.

Karl Schledwitz : Um, you can be naturally introverted. A lot of great leaders are introverts. Everybody is naturally, I think can be an introvert or extrovert. I think it’s harder for an introvert to learn how to be an extrovert and it’s almost possible for an extrovert to learn how to be an introvert, but to have a positive outlook, it can be universal.

It doesn’t matter whether you’re an introvert or an extrovert. You control that whether you wake up in the morning, determined to try to have a, uh, a good day. Uh, you know, one of the Boy Scouts, which I was fortunate enough to grow up, Boy Scouts is, you know, to do a good deed daily. And you know, if you have that attitude, you can achieve it, you know, uh,

Anthony Codispoti  : uh, Carl, I’ve just got one more question for you. But before I ask it, I want to do two things. First of all, everyone listening today, you love the show. You love this interview.

You want more of it. Go ahead and hit the follow or subscribe button on your favorite podcast app. Now I’m also going to let you know the best way to get in touch with or follow, follow Carl, Carl story.

Easy for me to say. We’ve got his website, which is monogramfoods.com. Anything else you want to point folks to either as a way to get in touch with you, to get in touch with the company, to follow any of your brands or causes?

Karl Schledwitz : No, I’m open. My email is Carl with a K K a R L at monogramfoods.com. And, uh, I love telling the monogram story. I’m very proud of it. I’m transitioning to chairman of the board, uh, going to be announcing my successor in the, in the next week or two.

Uh, what’s he, it happened to be a heat, uh, transitions out of where he’s at now. And, and so I’ll, I’ll be spending a lot less time on the day to day. Uh, that process already begun here at monogram, but hey, you, you get a lot of pride of authorship when you start something in. I’m very proud. So always happy to share the story.

Anthony Codispoti  : That’s great. Carl, last question for you as you look to the future, obviously your role is going to change somewhat, but still very passionate about monogram. What is it that you’re most excited about for the future of the company?

Karl Schledwitz : You know, uh, I’m really excited about continuing this legacy of giving back to the communities where we live and work and being considered a right place to work. Uh, and, uh, I’m also excited about the money that the shareholders and team members that own the company are going to make.

I don’t mind being bashful. I, I’m a capitalist. Uh, and so I enjoy making money and, and enjoy making money with and for other people. So that, that excites me when we, we’ve made a lot of money so far. We’re going to make a lot more.

Anthony Codispoti  : That’s great. And Carl, I want to be the first one to thank you for sharing your time and your story with us today. I really appreciate it.

Karl Schledwitz : Well, and, and, uh, I’m going to look up what, uh, add back benefits does because, uh, uh, you know, every company can benefit from, from finding little ways to make a little extra and have a competitive advantage. And it sounds to me like that’s what you’re offering people. So hats off to you as well.

Anthony Codispoti  : I appreciate that little plug there at the end, Carl. Thank you. Thanks. All right, folks. That’s a wrap on another episode of the inspired stories podcast. Thanks for learning. Appreciate it.