Our 27 entrepreneurs manage their way to great years, then this COVID-19 thing: ‘You want the good, the bad, and the ugly?’
NEW MILLIONAIRES: Gus Bates divvies merger proceeds among staff
JONATHAN MORRIS’ FULL YEAR: Hotel Dryce groundbreaking, new TV show, and managing his Fort Worth Barber Shop through COVID-19
September / October 2020
2020 The fourth iteration of Fort Worth Inc.’s annual EOE competition features 28 honorees — representing industries ranging from hospitality to technology — who’ve each had to overcome their own unique set of challenges along their entrepreneurial journeys. But 2020 brought on a challenge no one saw coming — COVID-19.
4 Publisher’s Note
Bizz Buzz
7 Bizz Buzz: First the barbershop, then the hotel, and now a spot on national TV — Jonathan Morris talks about his next big gig.
10 Face Time: How a Stop Six barbecue joint tripled its business in the middle of COVID-19.
Executive Life & Style
14 Distinctive Style: Local brands turn face masks into fashion statements.
20 Health and Fitness: Inside Southlake’s tech-smart fitness studio.
22 Wine and Dine: No shortage of toilet paper here at this downtown Fort Worth grocery store.
26 Office Space: M2G Ventures designs a workspace that feels like home.
58 Analyze This/Wealth: Opportunity Zones are causing a buzz in real estate right now. Here’s how you can take advantage.
60 Analyze This/Real Estate: Tips for avoiding traps in a commercial real estate lease.
62 EO Spotlight: A car wreck inspires a young entrepreneur to launch an app that dishes out rewards for undistracted driving.
64 Day in the Life: Gus Bates on the merger that turned some of his employees into millionaires.
On Sunday, a day after the 2020 Kentucky Derby, I watched the 2010 film “Secretariat,” the story of what many consider the greatest thoroughbred racehorse of all time. While I was moved by the story of the horse, I was even more inspired by the emergence of a secondary theme — Penny Chenery, Secretariat’s unlikely owner.
The movie starts with Chenery, a housewife and mother of four, with little knowledge of horse racing, receiving a life-changing call with news her mother had passed, leaving her to care for her aging father with Alzheimer’s and his cash-hemorrhaging Meadow Stables Thoroughbred farm. Chenery’s family was pressing to sell the farm and the horses to pay the large estate tax. Chenery wants to keep the farm and return it to profitability.
All Chenery had to do was sell Secretariat, a promising 2-year-old, and they could have kept the ranch and had money left over to keep it going. Chenery, however, sees something that they don’t and believes Secretariat is special. If she’s wrong, she places her entire family in ruins.
Instead of selling, she goes all in, doing whatever it takes to hold on to Secretariat and ensure she is in a position to be an integral part of her horse’s legacy. She comes up with a creative solution to syndicate the horse by selling shares of his future stud fees to raise $6.08 million, enabling the Chenery family to pay estate
taxes. The risk, however, is huge. For her plan to work, she has to guarantee that Secretariat will win the Triple Crown, which hadn’t been done in 25 years.
I suspect Chenery spent many sleepless nights, wondering if she was doing the right thing. After all, her decision not only affected her life but her family and employees. Can any of you relate to this? That’s the reality of being an entrepreneur and owning a business. We have to make hard decisions, and many times, they go against the popular vote.
“Secretariat” is a story of a horse, but also the perseverance of Chenery through hardship and struggle. While history tells us the outcome, (Secretariat goes on to win the 1973 Triple Crown) the film also tells us that failure isn’t in losing the race — it’s in not running. It reminds us to never give up and to live life without regret.
Going all in is something that all of our 2020 Fort Worth Inc. Entrepreneur of Excellence Awards finalists and winners know all too well. This year, we recognize 27 finalists, with one winner each in nine categories. Please join me in congratulating each of them on making it to the finals of this prestigious business competition.
Hal A. Brown owner/publisher
Entrepreneur Jonathan Morris Slogs Through COVID-19, Gets Ready to Open Hotel, Host New TV Show BY
SCOTT NISHIMURA
Jonathan Morris has had a full year — even before COVID-19 socked his Fort Worth Barber Shop. Morris and a partner broke ground in mid-March on their 21-room boutique hotel, Hotel Dryce, on the site of an old dry ice warehouse across from the new Dickies Arena in west Fort Worth. Opening is still scheduled for January. Morris, who grew up in Denton, was working for a marketing agency when he broke onto the Fort Worth entrepreneurial
scene in fall 2014, sinking personal savings into the opening of Fort Worth Barber Shop in an old West Side building and offering an old-fashioned-style barbershop with modern touches like the serving of beer, spinning of discs on the record player, and opening the shop’s garage doors to the outdoors in season. Morris in January consolidated his Foundry shop, The Lathery, into Fort Worth Barber Shop and managed as COVID-19 forced a temporary closure and vibe-altering changes as he
reopened. Most recently, Morris announced this summer he’ll anchor a TV series on Chip and Joanna Gaines’ new Magnolia Network, debuting early next year as a replacement for the DIY Network. Morris will travel the U.S., interviewing entrepreneurs for the show, being produced by Fort Worth’s Red Sanders (see Entrepreneur of Excellence bio, page 44) and including eight-10 episodes in its launch season. Morris met up with Fort Worth Inc. in August for a quick Q&A.
Morris was visiting his sister in Argentina in mid-March when COVID hit. “I closed the barbershop. Soon after, the mandate to close occurred. We applied for [a payroll protection program loan] for our front desk team. A lot of our barbers applied for PPP as independent contractors. It was still just tough. We had a little bit of cash, but you can’t spend anything.” Texas Gov. Greg Abbott announced barbershops could reopen May 8, but Morris gave it an extra week. Customers upon entry are directed to wash their hands and queue up in their barber’s “zone.” Wearing of masks is required unless the mask must be removed as part of the service. For now, no more beer, spinning of records, hugs and high-fives, opening of the garage doors, and walk-in traffic. Toughest part early: managing expectations for his staff of 10. Traffic picked up through the summer, even though a lot of loyal customers hadn’t returned yet, Morris says. “Our barbers are staying busy right now.”
“My landlord, Shannon Wynne, I reached out to him when I was in Argentina. He’s an entrepreneur as well. He was very, very accommodating. He said, ‘Don’t worry about rent right now; we’ll figure that out down the road.’ [Wynne this summer announced he was closing his Bird Café in downtown Fort Worth’s Sundance Square.] If we would have had a few more months of not being open and I was left holding the rent bag, cash-wise, we might not have made it through the end of 2020.”
“In 2018, the old dry ice warehouse came up for sale. I had just had a conversation [after I] ran into an old buddy. I said I’m ready to add to the portfolio of businesses. I said I’d love to add a boutique hotel. My buddy [Allen Mederos] said he’d just gotten back from a boutique hotel in Florida. The next week, he and I got together and started talking. I started looking online [at property]. I noticed Gary Vasseur had a “for sale” sign at the ice building. I inquired. We offered. One of the unique things about the property [is its location]. There’s going to be 14,000
people coming through Dickies Arena for a concert and show. Within the Cultural District, there’s just not very many places to stay in proximity.”
Morris and Mederos won a 9-0 rezoning vote at the Fort Worth City Council and secured financing through CapTex Bank in Fort Worth. Bennett Benner Partners is the architect, and Fort Construction, the general contractor. “They’ve been great partners. We felt we came up with a design that honors the old building, but a large portion of the building is brandnew build. We’ve got a great lobby bar and courtyard. Really lean into the future of Fort Worth: diverse place that is forwardthinking. We honor our past at the same time.”
Rack rates will likely be $165-$170 per night. “As of right now, our timeline is still mid-January. We’d like to be open, in a very ideal world, before the rodeo comes into town. It could very well be one of our larger audiences during the year. We don’t know what the rodeo’s going to look like. We don’t even know whether our bar will be able to be operable.”
Morris says he and Mederos are studying hotels worldwide on how they’re dealing with the pandemic. “We do think business travel will be one of the last key factors in business to return. [But] we’re seeing a lot of staycationing happening. As much as we want to welcome a lot of new people to Fort Worth, I anticipate a lot of people from Fort Worth who want a different space and unique staycation experience.”
“I will be traveling around Texas talking to entrepreneurs about their successes, their challenges, how they’ve responded to the pandemic. We start shooting that this fall. The network launches in the spring of 2021. Red Sanders reached out to me last summer. Said he was meeting with Magnolia. We started coming up with some ideas. After a year of potential iterations, it very naturally turned into this idea that Jonathan, an entrepreneur, would talk to other entrepreneurs about their experiences. It’s authentic, and that’s what I just really love doing.”
In light of the COVID-19 pandemic, Global Entrepreneurship Week Fort Worth (GEW FW) is going virtual this year, scheduled for Nov. 16 – 20.
While the agenda had not yet been finalized as of press time, the event plans to highlight local entrepreneurs, offer networking opportunities, and educate the general public on the importance of entrepreneurship. There will also be an emphasis on how entrepreneurship can help lift people out of poverty, including in minority and underserved communities.
The event is a collaboration among GEW FW founders Texas Wesleyan University and The University of North Texas Health Science Center (HSC), community partners, and The DEC Network, which organizes Dallas Startup Week.
Last year’s GEW FW featured 54 in-person and virtual activities at 35 locations throughout Tarrant County, attracting over 2,200 participants. As a whole, Global Entrepreneurship Week takes place each November in more than 180 nations.
More information is available at gewfortworth.com.
Business has surged amid COVID-19 for the owner of the little Jube’s Smokehouse in Fort Worth’s Stop Six. Why? “I guess they like the food.”
BY TERESA MCUSIC / PHOTO BY OLAF GROWALD
Patrick “Jube” Joubert has been perfecting his barbecue technique for 30 years as a hobby, starting before he attended seminary and began his career as a pastor. Joubert combined his love of both in opening Jube’s Smokehouse in Southeast Fort Worth’s Stop Six neighborhood more than two years ago.
Turns out COVID-19, which hit in March, has been a challenge for Jube, only in testing his ability to meet higher demand. Business has tripled, Joubert says.
“The amount of orders has gone through the roof,” Joubert, 50, said one morning before opening his tiny 750-square-foot shop at 1900 S. Edgewood Terrace. “Some days we sold out in 2 1/2 hours. We doubled up everything on the weekend.”
Why the surge? “I wish I knew,” Joubert says. “Maybe because we were already a grab-and-go kinda place. I guess they like the food.” When the price of brisket doubled in the spring, Joubert says he did not raise prices.
“I couldn’t be happier. It’s therapy for me,” Joubert says. “It’s an opportunity to meet people, and I love people.”
Born in tiny Plaisance, Louisiana, Joubert was reared in Houston, then attended seminaries before becoming pastor of Corinth Baptist Church in Waxahachie, then Fellowship Church in Crawford. Joubert is popular on the national evangelical circuit. He figured he was doing 270 sermons a year before he took a break. “I physically ran out of gas."
When his second church dissolved, Joubert changed direction and started cooking
at home for family and friends on weekends. In 2017, Joubert met the owner of the vacated building on Edgewood. “Everything I needed was in the building except for smokers,” say Joubert, now a tenant.
Jube’s has four employees and cooks five days a week, open 11 a.m. until sellout. “For a little place, I think we cook a lot."
That includes up to 20 slabs of ribs and 15 briskets a day, sausage and sides. Joubert is most proud of his community outreach through a backpack giveaway, scholarships, and 10% discount to school district workers.
“The food is not the only purpose,” says Joubert, who plans to hit the sermon circuit again next year.
“The food will get you here, but... this is a ministry to me as much as preaching and pastoring is a ministry to me.”
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COVID-19 has local fashion brands adding face masks to their catalogs.
BY SAMANTHA CALIMBAHIN
Phillip Maximilian, owner of Mener Grand Train Co., is in the business of bespoke suits, measuring, cutting, and assembling everything with his own hands. When the COVID-19 pandemic hit and forced retailers to temporarily close last spring — causing many to wonder how the slowdown would impact business — Maximilian
decided to shift his company’s focus toward what was then a more pressing need: face masks.
Little did he realize how busy he and his tailors would be.
At first, Mener Grand Train was making masks and donating them to hospitals. Word got around — with very little advertising, Maximilian says — and soon businesses were reaching out with
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of that, Mener Grand Train had a “buy one, donate one” policy, meaning the company would need to manufacture what was sold — and then one more, to be given to first responders.
And, as it is with suits, Mener Grand Train followed the same handmade philosophy with masks.
“We had to hand draw it, hand cut it, hand sew it. It’s like making a suit. I didn’t want to do it assembly-line style. It was individually made,” Maximilian says. “I really cared about how it looked and that it was functional.”
The demand soon got to the point that the company had to bring in family and friends who’d been laid off work to help. Maximilian says his crew “did not touch one suit at all” between April and May and focused strictly on mask making. He estimates they made at least 6,000.
“It was all around the clock — I really mean all around the clock,” he says. “We had a couple of weeks, it was, like, the whole seven days; it was nonstop from 6 a.m. to 6 a.m. and just changing out shifts.”
But it kept the company busy — and afloat. Mener Grand Train was one of several local fashion brands that opted to make masks during the lockdowns that occurred this past spring. Another company, Morgan Mercantile, introduced a mask with a “Hope” design that sold online while its South Main Street shop was temporarily closed.
“It was a thing that was a Saturday
we’re printing and sewing and doing all of these things and having them out to people by that Wednesday, so we worked pretty fast to get that started,” says owner Chance Morgan.
While Morgan says mask making didn’t necessarily generate a ton of revenue for the shop, it did help cover overhead expenses.
“[Making money] wasn’t the whole goal of that initiative,” he says. “But at the same time, in a time when we were slower from our B2B customer side and not really sure how to move forward … it got us mentally and emotionally through that first couple of weeks. Panic was overridden by manufacturing and working.”
In recent months, things have gradually shifted back to normal for both Morgan Mercantile and Mener Grand Train Co. Mask making has slowed, and Mener Grand Train is back to making suits, while Morgan Mercantile continues screen printing and creating branded merchandise for its clientele.
Maximilian says the pivot toward face masks last spring not only kept his staff busy; it also kept the company steady during a time of economic uncertainty.
But he also says he doesn’t see the shift to mask making as a business decision; it was his company’s way of doing something for the community.
“It felt like we were mask manufacturers, but it felt good,” he says. “We were doing something right.”
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Kent Eastman with the Simmons’ Fort Worth leadership team, at the Simmons Bank Plaza at Dickies Arena.
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WORTH INC. Join Fort Worth Inc. for the fourth annual “Best Companies to Work For” awards ceremony!
Fort Worth Inc. will announce the winners at the luncheon in conjunction with the magazine’s November issue. The magazine will honor the top companies in Fort Worth that go above and beyond when creating an enjoyable workplace and thriving culture for their employees. The company rankings will be revealed at the event, and the top winners in each category will receive special recognition and trophies.
Thursday, Nov. 12, 2020
Check-in and Reception at the tables: 11:00 a.m. – noon
Luncheon and awards program: noon – 1:30 p.m.
T & P Station
221 W. Lancaster, Fort Worth 76102
Table of 10 tickets: $2,250 | Individual ticket: $250
Roxo focuses on ownership, operations and financing of infrastructure, energy and real assets including renewables.
Southlake fitness studio offers a tech-smart alternative to the gym.
BY SAMANTHA CALIMBAHIN
Many balk at the idea of going to the gym for a number of reasons, whether it be the intimidating equipment or the insecurity that ensues when working out next to an obvious gym buff. When COVID-19 temporarily closed gyms and forced everyone to stay home, it only became easier to make excuses to lounge around on the couch and binge Netflix.
But a fitness studio in Southlake hopes to mitigate that aversion to exercise. Fitness franchise The Exercise Coach deems itself a “smart gym,” sporting computerized equipment that adjusts to the ability of the user,
creates new benchmarks each time the user gets on the machine, and tracks data so the user can get a feel for their progress.
The Southlake space isn’t very big (about 1,100 square feet), allowing the studio to focus on personal training, either one-onone or with small groups (currently no more than two people due to COVID-19). Best of all, says owner Mike Sims, sessions are only 20 minutes.
“If you know you don’t like to exercise, but you know you’ve got to do it, don’t you want to get the best exercise you can in the shortest time period you have to do it?” he says. “That’s what we do here.”
Strength training does more than just build muscle. A few other benefits:
• Promotes weight loss
• Increases muscle conditioning
• Lowers cholesterol
• Improves blood pressure
• Increases bone-mineral density
• Increases metabolism
• Improves posture
The Exercise Coach has four computerized machines: the chest press/row and overhead press/pull down, both for upper body; leg press for, well, legs; and nucleus for lower back and core muscles. As you complete reps, you’re instructed to follow two lines — a green line that remains static, representing your benchmark, and a yellow line that moves according to the amount of effort you put into each rep. The goal is to keep the yellow line as close to the green as possible.
Each client is given a pin number, so when they return, they can plug their pin number into the machine, and the machine will make the next workout slightly more challenging with each visit.
Like every other establishment, The Exercise Coach is adhering to safety protocols while the pandemic is still in play. Equipment is disinfected between sessions, and staff and clients are required to wear masks.
During the lockdown, Sims says he feared the studio would close for good had they not been able to reopen in May. So far, about 60% – 70% of clients have returned.
He advises people to not lose track of their workouts — COVID-19 may be the illness making headlines right now, but it doesn’t make strength training less important.
“The things that held true before we shut our doors still hold true,” Sims says. “How important it is to be as strong as you can be for as long as you can be — none of that stuff’s gone away.”
Downtown
Fort Worth hasn’t always been friendly to the urban grocer. Still, Neighbor’s House Grocery keeps kicking — thanks, in part, to the global pandemic.
BY SAMANTHA CALIMBAHIN / PHOTO BY GREGORY JAMES
Neighbor’s House Grocery in downtown Fort Worth had a funny thing to brag about back in March when COVID-19 put everyone on lockdown and set buyers in a frenzy, emptying supermarket shelves of disinfectants, meats, and perhaps the most prized possession of all — toilet paper.
Meanwhile, Neighbor’s House had plenty. “[Customers] were coming in and
discovering us as a grocery store, so we gained a lot of new customers even though the pandemic was going on,” owner Kyle Cowan says. “Our safety protocols, the size of our store, the comfortability of our staff — people felt a little more at home with us, so it was a good opportunity.”
That’s the benefit of a local — not big box — grocery store, Cowan says. Unique, often locally made items; personal
What to Order, According to Owner Kyle Cowan
Tejas street tacos
Gourmet grilled cheese
Mac and cheese bar
Fried catfish and shrimp
relationships with staff; and if you’re at Neighbor’s House, a chance to pet Cowan’s service dog and store mascot, Houston.
“I don’t think you see that personal tie in a big-box store,” he says. “Whereas people have a little more personal investment in this store because it’s their store downtown.”
Granted, downtown Fort Worth hasn’t had a great track record of successful urban grocery concepts, having lost previous iterations like Oliver’s Fine Foods and In the Sack within the past three years.
Neighbor’s House opened last October at 500 W. Seventh St. in the building known as First on 7th. The store continues to keep kicking through COVID-19, but apart from carrying items that may not be as readily available at a supermarket, Cowan believes Neighbor’s House’s dual identity as a grocery store and a restaurant — a “groceraunt,” as he likes to call it — sets his establishment apart. Customers can drop by for everyday needs and also pick up a sandwich or customized mac and cheese.
Cowan also pays attention to customer habits and feedback, intentionally carrying certain items per a customer’s request. Neighbor’s House carries about 4,200 items total, and Cowan says staying in stock is important.
“The folks that are living downtown, a lot of them have adapted to the European model of shopping where they come multiple times in a week, versus a big-box store where they get a $300 basket of groceries and don’t come back till the next Sunday,” he says. “We’ve made a lot of friends with our customers — we know them coming in Monday, Wednesday, Friday. If we don’t see them, we know to check on them, so it’s become a cornerstone here in the community.”
to Jawad A. Qureshi, MD, MBA
Finalist - Fort Worth Entrepreneur of Excellence in Healthcare
We’re proud to stand behind Fort Worth businesses to help them grow. With dedicated local expertise and comprehensive financial solutions, we know how to accomplish projects of any scale.
The homelike vibe of M2G Ventures’ office space is meant to make employees feel more comfortable — and productive.
BY SAMANTHA CALIMBAHIN | PHOTOGRAPHY BY OLAF GROWALD
The office of M2G Ventures is designed to feel like a house, a place where employees are free to pick up their laptops and work anywhere, whether it be at their desk, on the couch in the break room, or in the sunroom out back — the same way a remote worker can float about from room to room while working from home.
Ironically, the team found themselves doing just that this past spring when COVID-19 forced many offices to temporarily close. The commercial real estate company has since returned, resuming normal business hours about three months ago.
Thankfully, the office’s deliberately homelike design has made the transition back a little easier, says co-president Jessica Miller Essl.
“[The design] encourages productiv-
ity, but it also encourages people to not feel stuck in their space,” she says. “I can think of so many offices I’ve been to, where you’re assigned one space, and that’s really it. Then you reserve the conference room, and those are your two spaces that you go through. We really want people to feel like they’re in their house, where they’re transitioning room to room depending on their mood.”
Located along White Settlement Road in The Foundry District, one of M2G’s own projects, the 3,600-square-foot space was the former office of interior designer Joseph Minton, who’s since consolidated his work in Dallas, allowing M2G to move in and make its own mark on the design.
Essl credits M2G’s former director of marketing and innovation, Jenny Sanders, for her handiwork on the office’s interior.
The space takes inspiration from the homes of the company’s co-presidents, Essl and twin sister Susan Gruppi. Colors are kept generally neutral. Greenery from local plant shop The Greenhouse 817 freshens each room, while shelves carry books and trinkets from places the sisters have traveled.
Essl describes the space’s overall aesthetic as a cross between “a well-traveled author and an artist.”
“We’re not huge readers,” Essl says with a laugh. “But we do love the aesthetic of the way books look and how homey they make you feel … [we as real estate developers] truly are storytellers. Having books around, and just the thought of a well-traveled author being in this space, really gives resonance to what you do — how do you peel back the story for every single project?”
Being in a development like The Foundry District, whose claim to fame is a corridor of wall-to-wall murals dubbed Inspiration Alley, M2G would be remiss not to incorporate art within its own space. Artist and chief creative Katie Murray curated or created each piece at M2G. Two particularly notable works hang in the conference room — paintings by Murray that depict abstract yet feminine forms, a homage to the sisters and founders of the company.
While the office layout is mostly open concept, Essl and Gruppi have their own
private spaces upstairs, complete with large windows that allow them to see one another from across the floor.
The office’s exterior is relatively low key. There’s no large signage or life-size mural announcing its location, just a wall of lush, green foliage draped over the building’s white brick.
“A lot of our buildings are a little bit of a surprise for people,” Essl says. “Typically, you see something that’s kind of old and junky, and a lot of people don’t want to mess with it; we usually see something that has a new life and a new way of
using it … [our office] feels so on-brand with M2G.”
She says the space feels nothing short of a “dream office.” Then again, real estate developers have a tendency to be “nomadic,” so she’s not counting out the possibility they’ll move again.
But not anytime soon. Right now, this is home.
“It feels like you never have this transition moment from home to office,” Essl says. “You feel like you’re coming into another version of your house. It’s just so warm and comfortable.”
Our annual class of some of Fort Worth’s finest entrepreneurs is in. One thing these executives have in common: COVID-19 and its big test. Or, as one CEO asked us: “You want the good, the bad and the ugly?”
BY SCOTT NISHIMURA / PHOTOGRAPHY
Fort Worth Inc.’s 2020 Entrepreneur of Excellence class is in. These 27 entrepreneurs — in commercial construction, consumer and durable goods, energy, health care and life sciences, hospitality, professional services, real estate, residential construction, and technology and e-commerce — showcase some of our region’s fastest-growing and wellmanaged enterprises.
They’ve all been fire-tested by COVID-19 and believe they’ll emerge stronger than they were before.
Presented by Whitley Penn, this is Fort Worth Inc.’s fourth annual Entrepreneur of Excellence edition. As is the case each year, applications were judged independently of the ownership and staff of the magazine. The judges — business leaders from across the region — reviewed each application confidentially, based on sales and profit growth, best practices, ethical business practices, inno-
vation, perseverance, and community involvement. The judges made their decisions earlier this year, choosing finalists and winners in each of nine categories. Financial performance data in the applications is confidential and not made available to the magazine staff for use in the biographies in this issue.
The category winners’ identities were kept secret until they were revealed Sept. 10 during a dinner at the Fort Worth Club. There was no cost associated with applying for, or being considered for, this award.
Eligibility criteria included ownership or lead of a business in the Greater Fort Worth area, at least two years in business, and $1.5 million in annual sales.
Separately, the staff of the magazine selected an honoree for our annual Supporter of Entrepreneurship: Tony Ford, a successful longtime Fort Worth entrepreneur and cheerleader for entrepreneurship in Fort Worth.
Jeff Kenny Architectural Fabrication
Jeff Kenny’s company was a jack-of-all-trades and specialist in nothing when he was hired as sales manager more than 10 years ago. Five years in, Kenny bought the Fort Worth firm and decided to focus on manufacturing products such as aluminum sunshades, commercial canopies, and metal and fabric awning systems for markets like restaurants and multifamily complexes. He ditched the side businesses and renamed the firm Architectural Fabrication. In 2016, the company moved into an 86,000-square-foot plant in the Ash Crescent neighborhood near Poly in southeast Fort Worth. Kenny was employee 14 when he showed up, and sales were $1.5 million, “which, in the construction world, is nothing.” Last year, sales reached $16.7 million, and the firm employed more than 100, Kenny says.
“We were everybody’s mistress and nobody’s wife,” Kenny likes to say, of when he joined the firm. “We did anything you asked us to do for $5. We installed flag poles, we made decks, we did custom light fixtures. We also made awnings and canopies,” but the company had little brand recognition, and no
architects specified its products in plans to developers.
Kenny launched lunch-and-learn campaigns aimed at architects, offering a catered barbecue lunch for the opportunity to come in, make presentations to architects, and ask them to specify Architectural Fabrication products in their plans. The architects, in return, earn continuing education credits. Today, Kenny estimates about 50% of the firm’s sales come off of architects’ specification. The firm is the specified manufacturer for large national accounts such as Walmart, IHOP, and On The Border restaurants.
Kenny also revamped the firm’s culture. Virtually nobody attended its Christmas parties, he says. “I don’t want to work at a place that nobody wants to get together for a party.” After he bought the firm with an SBA loan, he began throwing big annual Christmas parties. The firm throws itself an annual birthday party and an annual whirlyball employee outing. The firm invested in Salesforce four years ago, and earlier this year, process management software. Kenny also emphasizes workplace safety, saying he expects employees to call him on it if he’s not demonstrating safe practices, such as the wearing of protective eyewear and ear plugs.
Kenny retells the Christmas story at the annual holiday parties. “I want to work at a place where people want to get together,” he says. “They’re empowered to make great decisions. I’ve had great leaders, and I’ve had bad examples. This place is chockfull of good leaders that are empowering people to independently make good decisions. And we’ve created this repeatable process, which is so amazing.”
Steele & Freeman
Steele & Freeman continues to build on its four decades as a commercial and institutional contractor, putting up school, municipal, industrial, entertainment, medical, higher education, commercial, and faith buildings. Through August, the company estimated it completed $100 million of work so far this year. Its backlog has grown to $400 million from $300 million. “We’ve done more work than we’ve ever had,” Michael Freeman, the company’s second-generation president, says.
The Fort Worth company has seven active projects and will start more than $200 million in
new projects through April next year, Freeman says. It relies on repeat business — through architects and end users like city governments — and doesn’t pursue bid work. Twenty-three “fundamentals” like no-fault problem-solving guide the business. It’s added 17 people this year and laid off none, Freeman says, while many others in the industry were laying off employees off amid disruptions caused by COVID-19.
Like others among this year’s Entrepreneur of Excellence class, Steele & Freeman won a federal payroll protection loan. “We’ve utilized it to its fullest.” COVID-19 has been a disruption, but the firm layered on numerous precautions, such as daily temperature checks on job sites. While it’s had to quarantine crews due to exposure, it’s had no positive tests. “Knock on
Byrne Construction Services likes to bill itself as “smallest of the large contractors, largest of the medium-sized contractors.” “That’s the way it’s always been since I’ve had the company,” Avila says. “When you’re that size, you don’t have to get everything. You can keep your people busy without being forced to do things you really don’t want to do.”
Avila purchased the then-declining Fort Worth firm in 1995 and revamped it, participating in major projects such as the Dallas-Fort Worth Airport terminal remodeling program. Besides the airport, it’s working on a recreational facility for the City of Arlington and a medical project in the city. The firm maintains a diverse project volume of about $375 mil-
lion under contract.
“We’re very blessed,” Avila says. Contractors were considered an essential business when COVID-19 hit, “and our pipeline was pretty full. We’ve gone about building our projects as per normal.”
Managing through COVID-19, Byrne has staggered in-office workdays. On construction sites, it’s installed precautions such as daily temperature checks and required wearing of masks and gloves. “We’re weathering this thing pretty well.”
Today, Avila is chairman, his son Matthew is CEO, and son Paul is chief operating officer. Avila’s maintained active leadership in the community, serving on various boards. “Every business has an obligation as corporate citizens to give back to their community.”
Billy Rosenthal had retired from his family’s longheld Standard Meat Co. several years after it was acquired in 1983 by Consolidated Foods, when Outback Steakhouse asked him to consider supplying steaks. The rebooted Standard Meat started up in Fort Worth, serving 30 Outbacks. “My objective was to earn 25% of their business,” Rosenthal says. As of five years ago, Standard Meat supplied 100% of Outbacks – 700 today. Last year, Rosenthal and his family bought out a 50% partner.
Today, the company is held by Rosenthal; his children, Ashli and Ben; longtime business partner Howard Katz; and a few small investors. Ashli and Ben Rosenthal became co-presidents last year and run the company today. Ashli Rosenthal’s background is in marketing; her brother’s in finance. Today, Standard Meat has a diverse business in meal kits, retail, and restaurants. Its Dallas plant is dedicated to the Outback business. The largest customer of the Fort Worth plant is Hello Fresh, a popular meal kit business.
During COVID-19, Outback’s business fell 75% early on. “It started to come back almost immediately because they were so prepared for curbside and delivery,” Rosenthal said in mid-August. “It slowly built back up to where it’s now, down 10% or 15%.” Hello Fresh’s business, meanwhile, more than doubled, Rosenthal says. The company won a payroll protection loan but decided against accepting it. “We’re paying our loans; we didn’t need the PPP.”
Evin Sisemore was fresh out of college at LSU in 2007 and working in sales for a forklift company when she went out on a service call with a technician. “The funny thing is, the problem with the forklift was that the battery hadn’t been watered.” That may have foreshadowed a career in forklift batteries. Sisemore eventually moved into a job with Interstate Batteries. And when Interstate decided to sell its unit that sold premium Interstate-branded Hawker forklift batteries, Sisemore had already thrown her hat into the ring as
a prospective buyer, having seen the indications.
In 2018, she launched Texas Motive Solutions in Fort Worth as a Hawker distributor, taking out a loan to start up. Her husband, Justin, a Fort Worth lawyer, coached her in the startup, which included picking new employees from Interstate. “I feel my strength is finding talent,” Sisemore says. “I knew we had the right people in place.” The couple had two months to put the company together, including infrastructure, fleet, uniforms, safety protocols, benefits, staff, and a culture. Texas Motive’s motto is
“Christ, Family, Service.” “The coolest part about being a privately owned company is you can choose what kind of morals and values you want to instill in the company.”
During COVID-19, Sisemore added to her staff, now 39, and took out a payroll protection loan. “Our demand went up immediately because, luckily, we’re an essential business. Our batteries are what power the forklifts and pallet jacks to get your food to grocery stores [and] move it from manufacturing facilities to distribution centers.”
Twisted X
Twisted X, a Decatur-based designer and maker of casual footwear, was on a continued growth streak and one of America’s fastest-growing companies when COVID-19 hit. “March 15, the lockdown was announced; that’s when it really hit us,” Prasad Reddy, the CEO, says. “Business was down 95% the first week. Eventually, it opened up slowly.”
Sales in June and July posted records, he says. Reddy has seen tough times. A turnaround man, he led a group that bought the company out of bankruptcy after its filing in 2008. The company, at $8 million in sales the year Reddy came aboard, turned in more than $80 million in sales in 2019. The company this year earned a spot on the Inc. 5000 list of America’s fastestgrowing companies for the third straight year, with three-year growth of 75%.
The Twisted X team met early to address its approach to COVID. “One thing we didn’t want to do is take any rash actions that would impact the long term. We don’t want to change our values, how we operate our business.”
First, the company maintained its stance of not entering into competition with its 3,000 retailers. “This COVID situation, staying at home, that’s a great opportunity for online sales,” Reddy says. “We have the technology, but we decided we’re not going to do that. We’re going to help our retailers. Our marketing team has come up with a lot of social assets the retailers can use.”
Second, Twisted X decided it wouldn’t pare service to its retailers. “With almost all the companies doing furloughs and layoffs, we took a different approach. We said we’re not going to lay off anybody. We said we’re going to add extra staff in customer service. We added 25 more.”
Twisted X granted extended payment terms to its retailers. “Our retailers are having a hard time with cash flow. They were looking for brands that support them."
Twisted X boosted its inventory 25%-30%, Reddy says. “We decided being privately held, we can take those chances. We said we’re going to increase our inventory. We tell our retailers you don’t have to carry inventory, we will.”
Twisted X kept its contract factories going. “The factories are happy, because of the brands called in March and canceled the order. We said we’re not going to cancel any orders.” The company unveiled a new fall line that “has been accepted very well by the retailers.”
The company didn’t cut staff or benefits. It secured a payroll protection loan. “Our people are very important; our team is important,” Reddy says. “Our company can’t run without them.”
Todd Fitzgerald and his ROXO cofounders, J.W. Wilson and James Vess, have been on a nice run since launching the Fort Worth oil and gas firm in 2015. The trio, former TCU football players, acquired 5,300 acres in the Permian Basin. In 2018, they sold the leasehold and surface rights to Murchison Oil and Gas when oil was at about $65 per barrel, and retained the minerals.
There are now 40 wells on the acreage today, including four uncompleted, from no wells at the time of the sale. “We are cash-flowing that position,” Fitzgerald says. The acreage had about 100 wells within five miles around it; today, there’s about 250, Fitzgerald
says. The group, which remains backed by Vortus Investments L.L.C., is on the lookout for similar assets, and also wants to work in renewable assets.
“We are an oil and gas company; that’s our history,” Fitzgerald says. “But we realize there’s a transition that’s coming down the road, and that’s going to transition into renewable. It’s going to happen. You need oil and gas to get there.” Fitzgerald, who has a finance background, launched his entrepreneurial journey with an athletics company he, his brother, and their parents started. He moved into energy, working in the backroom of a company and moving up to chief financial officer before starting ROXO with friends Wilson and Vess.
MineralWare co-founder Ryan Vinson continues to spin new energy companies from the digital foundation he launched MineralWare — a platform for managing minerals, royalties, and nonoperating working interests — from in 2014.
Vinson and his partner, Larry Brogdon, a partner in the Four Sevens Oil Co. in Fort Worth, have targeted early 2021 as the launch date for Energy Domain, an app investors can use to buy and sell minerals and royalties. Vinson says Energy Domain likely has significantly greater potential than MineralWare. And he and Brogdon are working on a third company they’ve kept under wraps.
“We’re bringing the latest technology to the forefront,” says Vinson, the former head of oil and gas advisory at Bessemer Trust, who quit his job to launch MineralWare. The firm grew quickly in an arcane space not known for transparency, outgrowing office space and becoming the largest tenant in the Fort Worth Club Tower. Last year, the company triggered an employee bonus of up to 50% of salary by reaching a monthly revenue target of $250,000.
Even with negative oil prices earlier this year, MineralWare saw virtually no attrition among account holders at just 1.14%, Vinson says. Through the MineralWare platform, the firm has uncovered $2.9 million in account holders’ revenue in suspense in the last six months, Vinson says. “We have a 93% success rate in finding revenue that’s in suspense.”
The firm has 30 employees and avoided layoffs during COVID-19, Vinson says. Like most other EOE finalists this year, Vinson says MineralWare sought and received a payroll protection loan. “We went back and forth on it; we decided to take it, considering the economic impact.”
Vinson co-founded the firm with ex-TCU Energy Institute associate director John Baum. Brogdon came on later as an investor; he and Vinson subsequently bought out Baum and are partners in MineralWare, Energy
Brogdon came on later as an investor; he and Vinson subsequently bought out Baum and are partners in MineralWare, Energy Domain, and the third company.
Using the Energy Domain app, you’ll be able to find a property; perform due diligence; send messages between buyer and seller; get alerts on properties of interest; negotiate transactions securely; and use simple buttons like “accept,” “reject,” and “counter”; and use a “buy now” feature to execute a deal immediately.
Energy Domain has integrated the past six years of MineralWare data, including well, permit, production, and oil and gas check stub and revenue data.
“Historically, a lot of the oil and gas companies are really behind on their technology,” Vinson says. “You think of Zillow. You can pull up what a house is worth on your phone. Essentially, that’s our vision, to bring more transparency to the acquisition and divestiture space.”
Dr. Jawad Qureshi built himself some foundation for a career in medicine with an entrepreneurial flair. Qureshi grew up in Denton, where his father was a cardiologist. He attended Duke University, where he double-majored in biology and economics, becoming interested in business alongside medicine. He remained at Duke for medical school and an MBA. “The thought process was originally that I was going to manage a medical center,” he says.
Qureshi was accepted into Johns Hopkins University for his residency in ophthalmology.
“A number of academic sites had a chairman who worked from Johns Hopkins, so I was kind of following on that plan.” Qureshi and his wife, Dr. Aaleya Koreishi, also a finalist in the 2020 Entrepreneur of Excellence competition, returned later to North Texas and family, when they learned they were having twins.
Qureshi ultimately started his own practice, Retina Center of Texas, starting in Grapevine in a small office. The practice today has offices in Fort Worth, Plano, and Dallas, and is preparing to move the Grapevine office into a new clinic and practice headquarters in Southlake this fall.
The 10,400-square-foot building – Retina Center’s new home base — will include a clinic, management, billing, and support services. A third physician — a subspecialist in tumors and ocular oncology — is joining the practice in October. And a fourth physician will join next summer, Qureshi says.
Qureshi brought his broad interests to bear in opening the Fort Worth office, looking to create a medical facility that would optimize certain treatments in ophthalmology, such as laser treatments and diabetic retinopathy. He bought a site on Fort Worth’s West Side, off of Interstate 30, West Vickery Boulevard, Montgomery Street, and the future Chisholm Trail Parkway entry. Qureshi and a developer
financed the $16.5 million building.
A group of 18 physicians built the $7 million surgery center in the building. Qureshi and Koreishi committed to locating their offices in the building as tenants, taking the building to 70% full. Texas Health Resources subsequently bought 50% of the value of the surgery center and rebranded it THR. “They just simply have more purchasing power, and they’re able to bring efficiency to the surgery center by decreasing costs,” Qureshi says.
The surgery center is also in the middle of a continued trend in health care to push more surgeries into outpatient centers and out of more expensive acute care hospitals. “We do total knees now” at the surgery center, Qureshi says. “It saves [the insurance companies] thousands of dollars.”
Elyse Dickerson’s Eosera, a Fort Worth biotech firm she and partner Joe Griffin launched in 2017 with its first products, a line for compacted earwax called Earwax MD, rocketed out to a fast start. It has chainwide distribution in CVS and Rite Aid stores, and its products are sold on Amazon. “In January, everything was on fire,” Dickerson, Eosera’s CEO, says. She and Griffin had also received word from Walmart that the company would take its products in September this year. Eosera grew its warehouse and manufacturing space in a south Fort Worth industrial complex to close to 20,000 square feet from 12,000 square feet, brought in two more management positions and seven more manufacturing associates. “Then Walmart called and said we got you confused with another manufacturer; we will work you in for 2021. This was after we built 100,000 products for them.” The company had to quickly adapt, and it laid off the seven new manufacturing associates. "You want the good, the bad and the ugly?" she says.
Then COVID-19 hit. Sales grew during March and April; Eosera received a payroll protection program loan as a hedge. Sales continued strong during the summer, Dickerson says. “People continue to not want
to be going out of their houses to their doctors. They’re searching for at-home remedies.” Eosera secured a new 418-store East Coast retailer, Stop & Shop, that it will begin shipping to in October. Eosera also is preparing this fall to launch an earbud cleaning kit and a new kit expanding its Wax Blaster MD irrigation system.
The company’s expectation for Walmart is national distribution, Dickerson says, but that’s not clear yet. “This is just sort of the ebb and flow of being able to pivot,” she says. “That’s what we’ve been focused on — control what we can control and work around everything else.”
Dr. Aaleya Koreishi doesn’t remember wanting to be anything in her life other than a physician. She’s had a few role models. “My father is actually a retina specialist. My mom was a pediatrician. They’re both retired now. My twin sister’s a pathologist. My little sister and her husband are pathologists; my little sister is a family medicine public health doctor. And my brother is an ophthalmologist. And my cousins are doctors, too. It runs in the family.” And her husband, Dr.
Jawad Qureshi, also a finalist in this year’s Entrepreneur of Excellence, is a physician. She found ophthalmology while in medical school at the University of Michigan. Koreishi and her husband, a retina specialist who grew up in Denton, both went to work for large groups in the DFW area. Her husband left and started his own practice. Once that was established, Koreishi in 2013 started her own Cornea Consultants of Texas, with offices in Arlington, Fort Worth, and Plano. The practice, which has two physicians, probably will look for a fourth location within the next four years or so. “Before you hire another doctor, you want the one you just hired to have a good base so they don’t feel like their revenue stream is getting taken from, split to another person,” Koreishi says. “I like the idea of being a small company, as opposed to joining. There’s a lot of selling to private equity and that kind of thing lately. And I’m really not interested in that. I like to be in charge of our destiny.”
Here’s one for the COVID-19 annals: Sales at Brent Johnson’s restaurants have done better with curbside and takeout, and limited dine-in service, than they did before. “Fortunately, I’ve got drive-through and curbside in my background,” says Johnson, who opened his first Rio Mambo in Fort Worth’s Cityview Center on Sept. 11, 2001, and today has five Rio Mambos and one new restaurant concept called The Rim. “I was familiar with some of the behaviors.” Johnson used cones and orange Home Depot buckets to convert his restaurant parking lots to drivethroughs, letting the landlords figure out later. His daughter turned the switch onto an online ordering system the company already had in the works. Johnson put off proceeding with a couple of restaurants he was planning. “COVID didn’t necessarily stop us,” he says, “but the impact on so many other operations gave us pause. I’ve taken a wait-and-see position because there’s so many new areas that are available to us, where I don’t have to hang a Vent-A-Hood or cut concrete.”
Johnson’s already scouting some potential new locations. “My approach is probably way too honest. We show them, this is what our operation looks like. Here’s what our business plan looks like. You don’t want us to fail.”
Nafees Alam happened into restaurants by accident. After earning his bachelor’s in information science from the University of Texas at Arlington, he went to work for a tech company and was visiting a friend in Atlanta where he ended up sitting next to a Waffle House executive at a baseball game. Fast forward, Alam, who had no interest in restaurants, worked his way up the company to a portfolio of Waffle Houses he ran in Dallas. Dallas restaurateur Mike Hoque recruited Alam 15 years ago, and the two co-founded DRG Concepts, which opened and today runs Dallas Fish
Market, Dallas Chop House, Chop House Burger, and Wild Salsa, restaurants that reinvigorated a dormant piece of downtown Dallas’ Main Street. DRG also opened Chop House Burger and Wild Salsa in downtown Fort Worth’s City Place and recently opened the Wicked Butcher steakhouse in The Sinclair hotel in downtown Fort Worth. All of the restaurants except Chop House Burger in Dallas are temporarily closed due to COVID-19.
Alam, who later earned his MBA at SMU and is DRG’s chief executive, says Waffle House’s attention to detail stuck with him. “Their atten-
tion to detail means you are chasing every dollar that comes through your door. Every cost line, every revenue line.”
Waffle House’s cultlike customer experience has stuck with him, too. “Everybody knows you by your name.” DRG is watching the COVID-19 data in hopes of starting to reopen restaurants one by one beginning in September or October, Alam says. It’s renovating some of its older restaurants. It’s also used its Chop House Burger in Dallas to serve meals to first responders at local hospitals. “We’re past the initial shock; we have a plan.”
Jon Bonnell Bonnell’s Restaurant Group
Jon Bonnell’s influences in food go back to growing up in a family of cooks. “My mom and dad both loved to cook,” he says. “They were always entertaining. Whether it’s mom trying to throw a fancy dinner party or dad cooking at the lake house. My mom could cook anything she had a recipe for. She had really classic technique. My dad was more seat-of-the-pants approach, like ‘Let’s cook a whole pig.’”
Hunting and fishing led to “cooking from the outdoors.” And “every Monday was cook-with-mom night. She wanted to make sure we really understand what cooking was, from start to finish. We would start by going to the fish market or the meat market or the grocery store.”
Bonnell graduated from Vanderbilt University, intending to go into teaching and getting a job in Dallas as a middle and high school math and science teacher for two years. “Cooking is really just taking biology and applying physics and chemistry.”
His first summer off, “I didn’t know what to do with myself.” Bonnell found himself drawn to The Food Network, which had just started on cable TV. One of the chefs he saw had attended culinary school. He started researching culinary schools, and he and his dog took off to visit three. “I didn’t tell my family. It was just me and the dog.”
The New England Culinary Institute offered what he calls “the best advice ever”: Before diving into culinary school, work for an independent restaurant, experience the hours and work flow. He spent the summer working at the grand Riviera in Dallas. “First day, I was just plating salads and desserts. Before you know it, you’re learning how to torch a crème brûlée. Then there’s a job nobody wants to do, so I was cleaning calamari.”
In 1997-98, he attended the New England institute. He did a six-month externship in Vermont while in school and, in the second, worked for the famed
Brennan’s in New Orleans’ French Quarter. Back in Fort Worth, Bonnell got a job working for the Randall’s Gourmet Cheesecake Co., a downtown fine dining restaurant, where he met another employee, Ed McOwen. Bonnell and McOwen started Bonnell’s Fine Texas Cuisine a few years later and today are the partners in all four restaurants in the Bonnell’s group, including Waters Restaurant downtown and two Buffalo Bros Pizza Wings & Subs. Bonnell and McOwen added catering, including a stint as caterers to the clubs and suites at TCU football games. “Five thousand fans within three hours,” Bonnell says. But the experience proved valuable when COVID-19 hit. COVID-19 wiped out Bonnell’s robust catering orders virtually overnight. But to keep the restaurants afloat and as many people employed as possible, Bonnell and McOwen switched to $40 family four-packs.
Fans of Bonnell — long known for generosity to community causes and helping fellow restaurateurs — packed the Southwest Boulevard frontage road outside Bonnell’s for the daily 4 p.m. drive-through. Bonnell’s restaurants are operating at 50% capacity for dine-in service. Some small caterings are beginning to come in.
“Restaurants write a business plan based on Friday and Saturday nights full,” he says. “You hope you do pretty well during the week, and then Friday and Saturday night, you pack the house. Right now, even if they said go, 100%, people aren’t ready.”
Red Productions
Red Sanders likes to say he could have moved to Los Angeles after he graduated from TCU, but a mentor suggested he stay in Fort Worth where he could make a bigger impact. Sanders, who started his first successful entertainment company at 14, has combined his entrepreneurial spirit, media expertise, and love of visual storytelling to create one of the premier media companies in North Texas. His Red Productions, founded in 2005, does commercials and brand films. Red Entertainment, which he founded in 1995, develops original content, including TV series and feature films.
In February 2019, Sanders opened a big new production space in the South Main Village, moving from Foch Street in the West Seventh corridor. It’s a goal he set 10 years earlier when the company moved onto Foch Street.
“We wanted to build something for the creative community to have a space to work in and create in,” says Sanders, whose companies occupy just one part of the backlot.
“We didn’t want it to feel like people were coming into Red Productions. People can pop in if they’re in town shooting a film or if they’re starting a new creative business. Or if you need to rent a studio for the day. What I’ve always loved about Fort Worth is the community feel in our industry. It doesn’t feel competitive. There’s so much demand for quality video content at all levels. Since we built an open backlot space, seeing all the creators has been inspiring.”
Most recently, Sanders announced he’s executive producer and creator of an eight-to-10-episode TV series set to debut on Chip and Joanna Gaines’ new Magnolia Network, which launches early next year. The series will feature the Fort Worth entrepre-
neur Jonathan Morris, who will interview entrepreneurs nationally. Magnolia is a new collaboration with Discovery and will replace the DIY Network, a Discovery property.
“As we move down the road we want to have multiple TV series going on at the same time,” says Sanders, who pitched 10 ideas to Discovery before they gravitated to Morris.
The company has made multiple feature films, but “feature films are really hard to make. We started looking into unscripted TV.”
During COVID19, Red has offered discounted livestream packages for nonprofits and businesses. The company also created a content automation platform that companies can use to create social media commercials from their own creative components.
“They can all have their own unique logins. It doesn’t have to go through us. They don’t need to do video editing. For $20 or $60, they get this commercial. What might have been a $5,000 spot might cost $50. It allows them flexibility without having to have the knowledge of how to edit automation software.”
Susan Semmelmann Susan Semmelmann Interiors
Susan Semmelmann, in the interiors business for 25 years, left a partnership and launched her own brand in March 2019. She signed up 11 jobs within a few months and, today, has 38. Semmelmann is under construction on a new design center at 4372 W. Vickery Blvd., due to open in December. “We have all of our interior selections done now, and it’s gorgeous. Lots of chandeliers and white marble floors. We did full turnkey
finishings. I wanted it to feel more residential. I wanted you to walk in and actually see it as if you were in a home setting. It’s going to be very inviting and very unique.” Semmelmann’s also started the Susan Semmelmann Interiors Foundation. Her causes include a Wish with Wings, for which she does the décor for the nonprofit’s annual Butterfly Wishes gala. Semmelmann and her husband built homes together for a dozen years and were in an interiors partnership for 18 years.
Home improvement has surged amid COVID-19, with more people at home, and Semmelmann says her business has benefited, even though she says she’s had difficulty securing products on a timely basis. “Our business is at an all-time high right now. We are getting calls daily for us to go in and renovate, design, furnish — updates, upgrades, everything.”
Travis Patterson Patterson Law Group
Fort Worth’s Patterson Law Group was set up well to handle the disruption caused by COVID-19. The personal injury firm built its case management software over 20 years. It’s paperless, client can access case files from their phones, and the firm built in ability to have virtual meetings long ago, Travis Patterson, principal, says. “Our firm embraced technology a long time ago, and sometimes, I probably drove people crazy with how much I wanted them to learn the technology and to be flexible, but it came
in handy. When the government shut down everything that first time around, we went home, and we were ready to go. We didn’t miss a beat, and then the rest of the industry had to scramble and catch up.” Patterson, who earned his business and law degrees from the University of Texas, says COVID-19 created a dip in new cases, but the firm and its 20-plus lawyers and staff have stayed busy working on cases it started within the last two years. “We’ve stayed busy throughout all of this.”
The firm has expanded into its
first new market, San Antonio, by signing on a local lawyer familiar with the market. Patterson says the firm wants that to start expansion into other Texas cities. “You kind of think of a wheel — you have the spokes of a wheel and a hub. We think of Fort Worth as our hub. We are locating really good lawyers in other markets around Texas who are starting silo offices for us.”
Michael Crain continues to build his entrepreneurial resume, most recently joining the newly merged Fort Worth real estate firm Williams Northern Crain as a partner with Ty Williams and Will Northern. Crain’s also the District 3 director for the Fort Worth City Councilman Brian Byrd, continuing his interests in public affairs.
And he and his wife, Joanna, are expanding their Fort Worth nonprofit Foodie Philanthropy, which partners with chefs to raise money for a selected charity each year, an idea they originally launched when they lived in Beijing, where Crain was chief of staff at the U.S. Embassy under President George W. Bush. In 2020, Foodie Philanthropy raised $55,000 for The Jordan Elizabeth Harris Foundation for suicide awareness, outreach and research, and the 2021 beneficiary is the Taste Project nonprofit restaurant. Foodie Philanthropy, in its sixth year in Fort Worth, has raised about $150,000 for five charities.
The well-traveled Crain, who holds a bachelor’s in business from Texas A&M, law degree from Texas Wesleyan University, and MBA from Rutgers, hit the road for Washington after graduating from A&M. “I’d always had a fascination with politics,” he says. “Our government’s not perfect. It’s not designed to be perfect; it’s run by people who are imperfect at their core.”
He sees his experience in politics — advance for the White House and Commerce Department, U.S. Embassy in Beijing under the Bush Administration, and senior managing director of the 55th Presidential Inaugural Committee — through the same lens as he views entrepreneurship. “Everything can be better,” he says. After the Bush Administration, Crain worked several years as a consultant in Beijing before he and his family moved back to Texas in 2014, where Crain worked as a public policy manager for Uber before he went into real estate in 2015.
The Crains had a months-long stint as a franchise pizza restaurant owner in 2018 in Fort Worth’s high-end Left Bank that ended amid management problems and a new development that wasn’t generating enough traffic. “I would say biggest thing I probably learned is, people are either your greatest asset or your greatest liability,” Crain says.
In bringing Foodie Philanthropy to Fort Worth, the Crains are pitching chefs and restaurant owners with a different way to give. A community panel selects a charity each year as beneficiary from applications. Chefs are asked to donate tables of 10 in their restaurants with a fixed menu and wine pairings. The tables are sold to raise money, with the meals served up on a single night each year. With galas off the table because of COVID-19, Crain believes Foodie Philanthropy could pick up more steam. “You see a lot of nonprofits struggling because they’ve had this [gala] model, but now you can’t have events.”
Branson Blackburn and several partners co-founded Trinity Real Estate Investment Services in 2017, specializing in investment sales of single-tenant, commercial net lease properties nationally. The firm has done $1.1 billion in total volume through 730 transactions, including $370 million in closings this year. The firm’s listings are typically retail buildings under lease by tenants such as Dollar General, 7-Eleven, and Walgreens, with time remaining on the leases. “We have been very blessed in that the assets we sell are all essential retailers,” Blackburn says. “The asset we have done the majority of our business in has done well during COVID. A lot of investors have flocked to these investments.” Blackburn, who earned a bachelor’s degree in marketing from Abilene Christian University, worked several years for KW Net Lease Advisors before launching Trinity REIS. The firm today has six partners and 19 associates. The firm wants eventually to grow into a national footprint, Blackburn says.
Luke Syres and his business partners, Matt Lewis and Jeff Anderson, friends, came up with the idea for League Real Estate over lunch at Central Market. “I’ll never forget it,” Syres says. The three founded the residential real estate agency in Fort Worth in 2017, offering agents — and clients — a range of digital and print collateral choices, including still photo, video and drone photography, custom social campaigns, and direct mail. Today, it also has offices in Johnson and Parker counties. Since inception, Syres estimates the firm has done $500 million in sales volume, $160 million this year. Syres previously worked for a large independent brokerage in Texas in IT and marketing. He met Anderson, an agent, there. Lewis, the firm’s broker, was selling a business and looking for the next thing.
The firm today has 60 agents. The three onethird partners focused on a collaborative culture, eschewing, for one, publication of internal sales numbers. The firm has a marketing unit that supports its agents, boosts listings, and creates consistency, Syres says. “We pay for all of it upfront for the agent. They reimburse us at a discounted rate at closing if the property sells. If it doesn’t sell, we just eat that as a marketing cost.”
Healy and Associates Real Estate
Rogers Healy says his entrepreneurial story is straight-forward enough: “lovable loser figured it out in real estate.”
After a short and unsuccessful run at trying to become an actor in Los Angeles, Healy went full time into real estate at 23. “I failed at acting,” he says. “There was really nothing else left. I didn’t pay attention in college.” While at SMU, he helped friends arrange apartment rentals. “I was a Realtor by proxy.” The firm has three offices today, a few hundred agents, and placed among the nation’s fastest-growing companies from 2017 to 2019 on the Inc. 5000. COVID-19 has prompted Healy to review his business model, de-emphasizing face time in the office. “The cream always rises to the top, and right now, I think people have something to prove to themselves. On the residential front, it’s been crazy; it’s gangbusters. People want to be home; they want space.” Even though real estate activity has been strong through COVID-19, Healy worries the economy isn’t being tracked by surging stock prices. “Literally, it doesn’t make sense on paper that our economy is the strongest it’s ever been.”
Jason Webber JWC General Contractors
Jason Webber has done what few entrepreneurs have pulled off during COVID-19: He launched a new business. Webber, owner of JWC General Contractors of Southlake, a firm he founded in January 2018, in July started ADH Disaster Restoration alongside, selling fire and flood mitigation. “I think we can ride our reputation through JWC,” Webber says. Webber and his wife, Jaime Webber, owner of the Floral Bar in Roanoke, are both entrepreneurs. The couple also owns Webber Family Investments, a real estate company they started in 2019 to buy multifamily property; the couple is in due diligence on a townhome in Roanoke. The Webbers also plan to start a nonprofit in 2021 that will invest in or build affordable housing. “The heart has always been to give back to people,” Webber says. JWC has 30 employees today, retaining everyone through COVID-19 and hiring more. “I told the sales guys, don’t worry about your job; I’m not laying anybody off,” Webber says. “It kept the morale where there was a lot of uncertainty.”
Webber says he plans conservatively — “I’m a worst-case scenario guy” — but the company continues to beat its goals. In JWC’s first year, he wanted to build a $1 million backlog within a couple of months. He ended up with a $3 million to $4 million pipeline the first year and $1.9 million in revenue. In the second year, JWC had a $6 million-plus pipeline and $4.9 million in revenue. This year, he expects $20 million in revenue.
Shayne Morrissey had a good model — his remodeler dad — for an entrepreneurial career in designing interiors. “I was one of those really lucky people who knew what I wanted to do at a really young age,” he says. “My dad owned a small-scale residential remodeling company. I would help him during the summers. I was interested in construction but much more in interior design.” With a BFA in interior design from the Art Institute of Dallas in 2012, Morrissey opened a showroom at the Dallas trade center. In 2015, he and his father formed Morrissey Home Solutions, a construction company with design services integrated into the fee structure. His father retired in 2018, and Morrissey and his sister run the business today.
The company reached $3.5 million in revenue last year, and its goal was $4.5 million this year. During the summer, with COVID-19 disrupting the business, Morrissey changed gears. “This is our plan for 2021,” he said of the 2020 goal. He kept on his five employees, but everybody agreed to take 20% pay cuts. Morrissey also obtained a payroll protection program loan.
As COVID-19 progressed, Morrissey saw construction revenue drop 50%, but furniture revenue grew 200%. “I think it’s because people are spending a lot of time [at home], and they want to live in well-appointed spaces. Maybe somebody doesn’t want to live in a chaotic remodel right now, but they want to make changes in their spaces.”
Robert Whittaker saw his 2019 revenue drop 22% from the mark he hit the prior year. But that was the plan. “It was definitely strategic. We intended on not growing anything other than process and our profits.”
The reason for the repositioning at the premium fence and outdoor company: “I woke up [one day] and realized we were not working for an end user that week,” Whittaker says. Rather, Magnolia had let itself move too far into working as a subcontractor. “People were subcontracting us out; we were not actually touching our end user.”
Magnolia has now rebalanced at 60% working for homeowners and 40% subcontract, compared to the opposite the prior year, Whittaker says. Revenue is the same through mid-August as it was for all of 2019, and “we have four months left.” Working for end users is more profitable than as a subcontractor, but that wasn’t the point, Whittaker says.
“You can become profitable scaling anything,” Whittaker says. “The objective was to control our brand. Every single person who subcontracts us out has got the same objective we do. We’re happy to work for those people. But we also want to stay in front of the purchaser.”
Managing through COVID-19 has been touch-and-go. “At first, with everybody stuck at home, I was slightly concerned that people
would be doing their own projects,” Whittaker says. But supply chain disruptions meant difficulty getting materials for the DIYer.
“I’m one of the largest in the business,” he says. “I buy way out. I have a $100,000 commitment that I won’t see for six, seven weeks. People were almost forced to go with me because they couldn’t get the materials.”
But the upside, at least: “People were at home, and people wanted to do home projects, whether or not they paid someone else.”
Magnolia has experienced no confirmed cases of COVID-19 among its employees, Whittaker says. “COVID scared the heck out of us. We run a lot of guys. We tend to be as safe as possible. We work in close proximity. We try not to oversize crews, and we don’t bump crews around. We don’t share employees. We’re blessed because we work outdoors. That helps substantially. Our guys are obviously very conscious and aware of being safe.”
Rishi Khanna’s ISHIR IT outsourcing firm has seen its growth rocket, doubling revenue in 2019 from the $2.5 million it reached in 2018. The 2019 mark was up 71% over three years, good for a repeat appearance on this year’s Inc. 5000 list of fastestgrowing U.S. companies. “It’s going to be even crazier in 2020,” Khanna, who spent more than 100 days in hotels in 2019, predicted in an interview with Fort Worth Inc. late last year. Khanna probably wasn’t foreseeing 2020’s brand of crazy. “This year started off pretty strong, and then we got hit by COVID end of February,” Khanna says. “We had to do some adjustments in the organization with the amount of work we foresaw happening.”
ISHIR on March 3 let its employees begin working from home, earlier than a statewide order. Khanna traveled to India and Hong Kong in January, and February to Australia, and witnessed their aggressive early responses to COVID-19. “I felt we needed to keep our people safe. We didn’t necessarily need to be at the office every day.”
Demand in March and April was “super slow. People are still getting used to the changes that are happening. May, more activity. June and July, we started building a new pipeline. The pipeline we had prior to the pandemic, everyone put everything on hold.”
ISHIR laid off one employee, and everybody else took a pay cut, Khanna says. The company also obtained a payroll protection program loan.
In the spring, the company initiated fresh conversations with customers. “We have seen a lot more companies figuring out how they need to look at the future and what the future holds for them.”
Of the company’s business segments, travel and retail are down, health care dropped, but “then picked up,” Khanna says. e-commerce and logistics are up. “Anywhere we saw customers looking to leverage automation and leverage artificial intelligence is where we saw a little bit of uptick.”
One client in the business of luxury travel and events like weddings “figured out their technology is more relevant to real estate,” Khanna says. Where the company would use its virtual reality technology to provide tours of a wedding space or yacht, “they realized their technology could be used to provide a view of a house” for sale.
Another ISHIR client, focused previously on restaurant loyalty programs, revisited its offering and began offering it to the medical and wellness industry for uses such as communicating with patients, Khanna says. “They felt they were going to lose a lot of customer base in the short term, and they needed to be industries that were not going to go away.”
TriQuest Technologies, Inc.
Envoy Managed Services, LLC
Nikole Dickman had been a longtime corporate finance manager when her company announced she’d need to move to Atlanta. “It would be a lot of time on the road,” she says. “I had a really good support system around me.” So, she took her severance and started a consulting company in 2014. The next year, with her ex-employer’s tech team under mandatory relocation, Dickman started Envoy Managed Services, selling tech services back to the company. Envoy has two sides: traditional IT and managed services, working for a range of clients, from clients to her former multinational employer, with 260 job sites. Envoy also installs wire and wired systems for large buildings.
Envoy has seven employees and a bench of contractors. Dickman doesn’t have an IT background, so she hired it. “The majority of our tech team from our old employer all came from day one.” Through COVID-19, Envoy has been helping its clients make the transition to a hybrid environment, accelerating some projects. The company’s old employer pared its budget coming into 2020, and “we have very little contractual revenue
related to the company we used to work for,” Dickman says. She views it as a “silver lining.” “Given all of the infrastructure projects, given what we’re doing on the project side, I would like to see us surpass the revenue in our best year 2016 and 2017 with our old employer.”
Gary Tonniges started TriQuest Technologies in 1997, looking to combine the background and integrity of a certified public account with an information technology company. His view: The company should approach IT problem-solving for clients with the same fiduciary duty as a CPA. Tonniges is a CPA and a self-professed lover of technology. “That was really the essence of TriQuest, to be that company that you could trust even though you didn’t understand
what they were doing,” Tonniges says.
Tonniges started the company out of his pickup and a plastic box that contained company files. “I had two customers, and I would go out on-site to the first customer and then occasionally go to Dallas to the other customer.” The company has since outgrown three offices, and in 2005, Tonniges bought a building off the Trinity River near Interstate 30 and has remade it into a modern headquarters. The company has 10 employees today, down from 14 in March. “The COVID stuff has knocked down a lot of the project work that we do.” The company shed one position when automation replaced the need for a clerk, and three left to take other jobs.
What COVID-19 knocked down is beginning to get back up, Tonniges says. “A lot of the discretionary projects and things that were postponed are coming back on slate. In IT, you never really get out of something; you just delay it.”
We
Interested in sponsoring the awards program? Contact Robyn Lacasse at rlacasse@fwtexas.com
BY SCOTT NISHIMURA / PHOTOGRAPHY BY TRUITT ROGERS
Tony Ford, a serial entrepreneur who’s built several companies and is a cheerleader for entrepreneurship in Fort Worth, is Fort Worth Inc.’s 2020 Entrepreneur of Excellence Supporter of Entrepreneurship honoree, chosen by the magazine ownership and staff. Ford was the magazine’s EOE program manager for two years. He won the Ernst & Young Entrepreneur of the Year award for support of entrepreneurship in 1997 for starting the Fort Worth Business Assistance Center. Today, he is CEO of Success Fort Worth, a coaching firm. Ford sat down with Fort Worth Inc. for a Q&A.
Inc.: Where do you think you got your entrepreneurial start?
Ford: I started out with Steak & Ale with Norman Brinker. He taught us how to replicate things. My undergraduate degree is in hotel and restaurant. So, I would run a restaurant for them, and then they’d move me someplace else, and I’d build a new one. I learned how to multiply things.
Inc.: What do your coaching clients have in common?
Ford: They’re lonely. I believe loneliness is the signature characteristic of entrepreneurship.
Inc.: Why is that?
Ford: Because of what I call the big lie. The big lie is that independence is the final stop, that we’re made that way. But everything I’ve read, especially when I read the Bible,
is that we are built to be interdependent. So, when we stop at independence, it’s like arrested development. We flame out.
Inc.: You have clients who lie to you?
Ford: Well, that’s a good question. Fear. They have fear, they want to look good, they want to look good to me, and I call BS on it.
Inc.: But they’ve already admitted something to themselves by seeking you out in the first place.
Ford: Mm-hmm. It’s levels though, it’s levels.
Inc.: You get fan mail, right?
Ford: I get a lot of fan mail from wives. I do. I do. One instance that I can share: I coached this individual three times, and he shoved an envelope across the table
to me. I looked at it, and I said, “Hey, you don’t have to pay me now. I’ll invoice you at the end of the month. I do the work first, and then you pay me.” He goes, “It’s not a check.” I said, “Well, what is it?” He said, “Well, I don’t know.” I said, “Well, you’re handing it to me.” He says, “No, it’s from my wife.” I said, “Oh, okay.” It said, “Dear Mr. Ford” — I’m going to call him Bill — it said, “Thank you so much for coaching Bill. He’s become a totally different husband and father. If he ever decides to not have you as his executive coach, this is my cell number. Please call me immediately. Sue.”
Inc.: That’s funny.
Ford: Coaching opens up the door to people understanding themselves better, and they learn to relax. In our companies — we’ve had seven companies besides the coaching company — there were three things we always set out to do: Honor God, take care of our people, and make the world a better place. When I say our people, I don’t mean just our employees and our customers. I mean our vendors and the community, all four constituencies. That was important to us. Fortunately, we were able to do that.
I coach about three things, the big three: fear, anger, and procrastination. Those are the three stooges. One way or another, everybody I work with, those three are the big things that pop up. They're interacting, and they're interconnected.
– Tony Ford
Some companies made more money than others; some companies didn't make any money at all. But, we never failed at doing those three things.
Inc.: You've talked a lot about wanting to make Fort Worth an entrepreneurial center of Texas. Let’s talk about our entrepreneurial infrastructure. What have we got here?
Ford: Short of Kansas City, I have not seen an on-point infrastructure that I would call coordinated.
Inc.: Tell me about Kansas City.
Ford: Well, Kansas City has got the Kauffman Foundation there, right? You've got a $3 billion foundation that's willing to pour that kind of money, $100 million, $150 million a year, into creating entrepreneurship. They have mapped the city literally for entrepreneurial opportunity. We don't have that. We've got pieces of it. You have to understand the construct of entrepreneurship. Fifteen years ago, entrepreneurship wasn't cool. I remember I was at a person's party; it was Thanksgiving. One of the daughters of the people that were hosting party, her husband was asked, what do you do? He said, “Well, I'm an entrepreneur.” The brother-in-law looks across the table and says, “Well, send me your resume. I think I can help you get a job.”
Inc.: Kansas City mapped the city for entrepreneurship. What does that mean?
Ford: They have an organization that
their job identifies all the different entrepreneurial resources so that somebody looking for something can find it. You can go online and say, “I need this kind of entrepreneur who writes business plans. What banks are more entrepreneur friendly? What kind of training is available, loan programs, all this other stuff?” So, it's kind of out there.
Inc.: I know people ask you all the time what you read. What books do you read?
Ford: I've got a library of business books. I can tell you Who Moved My Cheese, I can tell you what seat on the bus to sit in, I can tell you all that stuff. Best business book I've ever read and read every day is the Bible and, in particular, Proverbs.
Inc.: Why is that?
Ford: Because it gives us all the tools we need to be successful entrepreneurs. If I had one book of Proverbs on a deserted island, it would be Chapter 3. It teaches you about wisdom, understanding, knowledge, discernment, discretion, faith, and on and on and on. It's really handy that there's 31 chapters. So, I read a Proverb, whatever day it is. Today's the 14th; I read the 14th. Just go Proverbs, you can have it in 27 different versions, but just read it and say, am I being wise or am I being foolish?
Inc.: What are the tenets of your coaching approach?
Ford: I coach about three things, the big three: fear, anger, and procrastination. Those are the three stooges. One way or another, everybody I work with, those three are the big things that pop up. They're interacting, and they're interconnected.
Inc.: How do you know if a person’s ready for a coach?
Ford: I'll look at them and say, “Okay, now I'm going to ask you a question, and I need you to answer honestly. Don't overthink it; just tell me the first thing that comes to your mind. Has there ever been or is it now that you hate your own company?” They go, “Yeah, I hate my company.” Okay, you need coaching.
Inc.: So, you get that answer quite a lot?
Ford: 100% of the time. I have never met a business owner that's been in business for more than two or three years, that hasn't at some moment just hated their own company. It's controlling them. It's hurting them. It's taking way too much out of them. It's like they grab hold of the snake, and they can't let it go. They're just afraid every moment that it's going to bite them and kill them. When you have a coach, it might be the only place you can go every week and be totally honest, because coaching is not about judgment. I don't judge. I help my people figure it out. The only two things I need: my client's trust and cooperation. You should write that down.
• Founding CEO, Success Fort Worth Executive Coaching
• Founding CEO, RIDE Television Network, Fort Worth-based horse lifestyle network
• Founding executive director, Fort Worth Business Assistance Center
• Senior partner, Kasper & Associates, Fort Worth M&A firm
• Founder and CEO, Salon Support, national distributor of tanning lotion products and equipment
• Founding partner, Sidelights, Inc., reflectors for American trucks and rail cars
• Founding vice president, Flash Foto, chain of eight one-hour-photo finishing labs
• Ernst & Young Entrepreneur of the Year, Supporter of Entrepreneurship
• Entrepreneur-In-Residence, Kauffman Foundation
• Exporter of the Year, U.S. Small Business Administration
• Certified Associate Professional Coach, International Coach Federation
• Biblical Counseling Certificate, Southwestern Theological Seminary
Commercial Construction
Jeff Kenny, Architectural Fabrication
Consumer & Durable Goods
Prasad Reddy, Twisted X
Energy
Ryan Vinson, MineralWare
Health Care & Life Sciences
Jawad Qureshi, Retina Center of Texas
Hospitality
Jon Bonnell, Bonnell’s Restaurant Group
Professional Services
Red Sanders, Red Productions
Real Estate
Michael Crain, WNC, Williams Northern Crain, LLC
Residential Construction
Robert Whittaker, Magnolia Fence & Patio
Tech & E-commerce
Rishi Khanna, ISHIR
Fort Worth Inc. would like to congratulate the 2020 Fort Worth Inc. Entrepreneur of Excellence winners and thank our program sponsors for a great event.
PRESENTING SPONSOR
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“Special Recognition Award”
Tony Ford, Success Fort Worth
BY KEN HUFFMAN
The newly created “Opportunity Zones” are creating a lot of buzz in the real estate and business communities. Typically, when an investor divests an appreciated real estate investment, capital gains tax is due on the appreciated value. But if this property is in an Opportunity Zone, the appreciation is 100% tax-free if the investment is held for at least 10 years.
Opportunity Zones were created through the federal Tax Cuts and Jobs Act in 2017 and rolled out in 2018. The purpose was to incentivize people to invest in economically distressed communities through capital gains tax incentives. Many people have the misconception that Opportunity Zones must be in an area of town you don’t visit after dark. Some are, but many are not. Some of the Opportunity Zones are located in suburban, industrial, downtown, and rural areas. Opportunity Zone designations are nominated by the chief executive of each state, then certified by the U.S. Treasury secretary.
Much of downtown Detroit is an Opportunity Zone, and this caught the eye of Quicken Loans founder Dan Gilbert, who went on a buying spree. Have you stayed
in a cabin in Broken Bow, Oklahoma? You have stayed in an Opportunity Zone. Broken Bow is a great example of what being designated an Opportunity Zone can do for the local economy and real estate market. Many people are building houses and cabins in Broken Bow for rental income.
How it works
Anyone can invest in an Opportunity Zone. Investors create a Qualified Opportunity Fund. The QOF invests at least 90% of its assets into property or businesses within an Opportunity Zone. The process of investing in a QOF is surprisingly simple and can be accomplished in just days, with minimal costs.
What you can invest in
Multifamily housing, hospitality, selfstorage, industrial, office, mining facilities, solar, retail and more
Benefits of Opportunity Zones
1. Deferral of capital gains
2. Reduction of deferred gain over time
3. Permanent gain exclusion on appreciation of investment
Deferral of capital gains
If you have a capital gain from a sale of a
business, building, or stock, you can defer paying your capital gains tax by investing in an Opportunity Zone. You can defer paying the capital gain until the investment is sold or Dec. 31, 2026, whichever comes earlier. If the investment is not sold before Dec. 31, 2026, any remaining deferred gain is recognized at that time. To qualify for this deferral, you must invest some or all of the capital gain in a QOF within 180 days of the sale.
Reduction of deferred gain over time
Investments held for less than five years do not receive any reduction and must recognize 100% of their deferred capital gain. But if you hold the investment in the Opportunity Zone for at least five years prior to Dec. 31, 2026, you only have to recognize 90% of the deferred capital gain. Investments in Opportunity Zones prior to 2020 could qualify to receive a 15% exclusion if held for seven years.
Permanent gain exclusion on appreciation of investment
This is the most attractive part of Opportunity Zones. Investments held for at least 10 years receive a 100% permanent tax exclusion on the appreciation of the property. At the sale of the investment, an election is made to receive a steppedup basis in the investment to fair market value. For example, if a person buys a building in an Opportunity Zone for $1 million, holds it for 10 years, and sells it for $3 million, the $2 million gain is tax-free. They pay zero capital gains tax. Typically, that gain would result in a capital gain tax bill of up to $400,000.
Contact: ken@captivenation.com or 888-944-5588.
BY MICHAEL S. GOODRICH
Peanut butter and jelly. Dogs and cats. One almost always has a smooth relationship, while the other may have periods of coexistence interrupted by sudden hostility and disagreement. A landlord and tenant relationship can operate along similar paths, but much is dependent on how well the parties have prepared for what is essentially a marriage, short or long term.
As a general rule, the landlord usually has more leverage than a tenant in a commercial lease. Generally, landlords know more about the ins, outs, and nuances of leasing because it’s their business. The specifics of a lease are often addressed early on in a letter of intent, providing basic lease terms specifying the location, size and dimensions, as well as rental terms and any extension and expansion options.
When negotiating the final contract, you can lean on two professionals — a real estate attorney and an experienced real estate broker. The broker knows the market for comparable space, and the attorney
advises on crucial details. For example, an attorney will take note of lease maintenance and repair provisions.
It is reasonable that day-to-day maintenance is the tenant’s obligation. But the tenant should insist that major repairs such as structural, roof, foundation and so forth are the landlord’s obligation. At first reading, commercial leases likely make the repair and replacement of HVAC systems the tenant’s obligation. Unknowingly, a tenant will sign that lease without objecting. An attorney will argue that replacement of an HVAC system is a capital expense to be borne by the landlord.
Another trap for the unwary tenant involves assignment and subletting provisions. At a minimum, the tenant should be able to assign or sublease with the landlord’s approval, and the landlord should not be permitted to withhold consent in an unreasonable, capricious or arbitrary manner.
Additionally, a lease often provides that any change in the entity’s structure may constitute an assignment of the lease, giving the landlord whatever remedies it
has for an assignment without the landlord’s consent. Careful drafting can avoid conflict situations should the tenant’s business operations change, i.e., adding a partner or being purchased by a larger entity, without triggering concern with the assignment and sublease provisions of the lease. Moreover, individuals or small companies may want to request that any estate planning activities should also be permissible under certain circumstances. Because tenants often plan to grow their business, their leasing needs may change with time, and a lease should be drafted to handle those situations. Rights of first refusal and options can ensure growth needs are met. Important to consider are the timing and requirements for exercising the right to extend the term of a lease, the rent for an extension, and the mechanics of expansion. What amount of space is available? What is necessary for future growth? Again, these are considerations for inclusion in a commercial lease. There are many terms and conditions contained in a commercial lease which can trap an unwary tenant, and a tenant is well-advised to seek the counsel of a real estate attorney as well as his or her broker before executing a lease. Multiple pages and provisions must be scrutinized. Have a peanut butter and jelly relationship and not a cat and dog relationship!
Goodrich, of counsel at Decker
is a commercial attorney certified by the Texas Board of Legal Specialization in Commercial Real Estate Law. He is writing this column on behalf of the Society of Commercial Realtors in Fort Worth, a regular contributor to Fort Worth Inc.
CEO on KERA invites you to the table as renowned journalist Lee Cullum interviews prominent chief executives from North Texas and beyond. Go to explore leadership styles and ethics. Go for insight into what makes companies successful. Go for the engaging conversation. Go Public.
WATCH FULL EPISODES AT KERA.ORG/CEO OR ON THE FREE PBS VIDEO APP.
BY SCOTT NISHIMURA / PHOTOGRAPHY BY OLAF GROWALD
Neha Husein was a student at SMU when she launched a mobile app called Just Drive, which awards points good toward restaurant coupons and insurance discounts for undistracted driving, after she was rear-ended by a distracted driver. Husein, who grew up in North Texas, graduated more than a year ago with degrees in human rights and marketing and minors in advertising and nonprofit studies. This spring, she completed a fellowship at SMU and won a one-year renewal. Last November, she won a Global Student Entrepreneurship Award in the Fort Worth regional competition from the Fort Worth chapter of the Entrepreneurs’ Organization. So far, she’s supported the app with $26,000 in winnings from pitch competitions and
some of her own money. The company has a board of advisers, including a patent lawyer and tech company CEO, and Husein is looking for a CTO and a way into accelerators. “I think I’ve fallen in love with the entire social impact of entrepreneurship,” Husein said in an interview at a Dallas coffee shop. “I want to continue giving back to the world through that lens. I see myself living my life, actually living in communities.”
Growing up “My dad really was an entrepreneur. He created several businesses, from dollar stores to gas stations. He would bring me a toy register, and I was ringing up orders. I never saw that as entrepreneurship, but looking back, I guess it was. My mom is a home health nurse. She just started after my brother and I graduated from college.”
Study abroad in SMU’s human rights program “There’s a heavy, heavy emphasis on travel. I went to Poland to study the Holocaust. I got to meet some Holocaust survivors. We went to Selma, Little Rock, and Montgomery and talked about the Freedom Rides. We went to South Africa to study human rights and ethics. South Africa is where I came up with Just Drive. I was doing an applied learning class.”
$26,000 PITCH COMPETITION WINNINGS
app developer I could find. I paid him almost the entire $1,000. He ended up screwing me over. I entered another pitch competition, and I won $5,000. We launched with that in October 2018. I learned a lot between the first app and the second app.”
1,500 JUST DRIVE DOWNLOADS
1,000 HOURS DRIVEN THROUGH APP
Developing her app “I have no entrepreneurial experience. I have no coding experience. I don’t know the first thing about app building. I entered my first pitch competition, and I won $1,000. I Googled how to build an app, and I hired the first
How it’s going The app has more than 1,500 downloads and 1,000 hours of driving, Husein says. The original idea was to get merchants to offer coupons on the app as rewards for undistracted driving. COVID-19 slowed things, and Husein is taking the opportunity to revamp the app for a September or October relaunch, adding a feature that allows friends to compete against each other for extra points. “We’re going to really gamify it.”
The
family-owned Gus Bates Insurance & Investments
finds a merger partner that ensures its long-term growth and cuts employees in on the merger proceeds, creating several millionaires.
BY TERESA MCUSIC / PHOTOGRAPHY BY OLAF GROWALD
Fort Worth born, Paschal High and TCU grad — Gus S. Bates, 53, is the quintessential local. But that doesn’t mean he isn’t ambitious. As the CEO of the Bates companies, Bates took his father’s one-man life insurance shop and expanded it into
one of the largest independent, familyowned insurance and investment firms in Texas, with 60 employees serving more than 900 business clients in DFW. With an employee benefits specialty among its portfolio of services, Bates has $900 million in 401(k) assets under management.
The firm was continuing its steady growth when Bates was advised to look for a larger partner to expand its product base for existing and potentially bigger clients. So, he and Bates’ president, Matt Morris, did their due diligence, which led them to a merger July 1 with Chicago-based HUB International Ltd., the fifth largest insurance broker in the world with $2.4 billion in revenue in 2018.
“If someone checked these, like, 100 boxes we said we would consider making a move, and I’ll be danged if HUB didn’t,” Bates says. “Long term, it was a brilliant move for our long-term growth.”
Point In November, HUB’s smaller downtown Fort Worth office will move to Bates’ property just off University in the Near Southside. Morris will be president of the merged HUB Texas firm with Bates continuing as a consultant for the 100-employee shop.
All of Bates’ employees kept their jobs, and in an unusual move, the undisclosed payout from the sale was shared with all of his employees, based on current salary and years of experience, Bates says. There was a small stock group that includes team leads, Morris and Bates, but all employees got some of the deal, which created several millionaires from his employee base, he says.
“We’re not an official ESOP [employee stock ownership plan], but just kind of treated it that way,” Bates says. “My employees are like my family, and I wanted to see that they were taken care of.”
The payout goes with the family-centric corporate culture Bates has built for his employees. Bates has a gym, garden, even a putting green for employees. He is also keeping the family tradition going: His daughter, Cassidy, now works in marketing for the firm, and son Cooper, a junior at TCU, is interning. Bates’ father, Gus Bates III, or “Pops,” 77, still comes into the office daily, too.
For the future, Bates says as a consultant, he is tasked with further expansion of HUB in Texas, both through acquiring larger clients and through similar mergers and acquisitions. HUB has seen the state as a growing market, Bates says, and wants to be part of that growth. “I see HUB in the next five years becoming one of the biggest players in Texas,” Bates says.
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