Can the mastermind of Browning-Ferris do for fitness what he did for waste management?
There was nothing wrong, back in April 1982, with Fitness Finders Inc. The little consulting firm's Living Well program -- a physical-fitness package it sold to corporations, which in turn offered the program to their employees -- was popular. Mainly on the strength of Living Well, the company had grown to 13 employees and $500,000 in annual revenues. It had even received an infusion of $75,000 in venture capital from, of all people, Campbell Soup Co.
Founders Charles and Beth Kuntzleman, however, were feeling less than fine. Sitting in adjoining offices at the company's Spring Arbor, Mich., headquarters, the Kuntzlemans couldn't help feeling that they had just passed up the chance of a lifetime.
Campbell, with which they had consulted on a "Soup is good for you" campaign, had originally offered to buy Living Well outright, to the tune of some $4 million. The Kuntzlemans had thought about the offer long and hard. But they had felt some doubts about Campbell's ability to market fitness, and they hesitated to give up their hard-won independence.
Finally, regretfully, they had declined, settling instead for the $75,000 investment. Ever since, they had been quietly kicking themselves.
Then a curious thing happened. The April 1982 issue of INC. magazine arrived on Beth's desk, and, flipping through it, she happened upon a feature entitled "The Gospel According to Fatjo." Tom Fatjo, she read, was a dynamic young Houston businessman. In 1967, while an accountant with Deloitte, Haskins & Sells, he founded the company that would eventually become Browning-Ferris Industries Inc., the largest solid-waste disposal enterprise in the country. In 1975, Fatjo had stepped down as head of BFI to pursue a new passion: the development of a lavish complex known as The Houstonian, a combination hotel, spa, and health-and-fitness center for harried executives.
As she read the article, Beth had an idea. "Should I give this guy a call?" she wrote in the margin before forwarding the issue to her husband.
"Why not?" Charles wrote back. "The worst he can say is no."
When the Kuntzlemans contacted The Houstonian, they were routed to marketing director Horace S. Irwin, who asked them to drop by during a convention of the National American Alliance for Health, Physical Education, Recreation and Dance, which they were attending in Houston the following week. They had a friendly dinner with Irwin, were introduced to Fatjo, and finally, at the end of the day, had a chance to show Irwin their program and materials. "All of a sudden he starts jumping all over the place," Charles recalls, "and he says, 'Tom's got to meet you guys, I mean, really meet with you."
A week later, the Kuntzlemans made their presentation to Fatjo. "Tom didn't say anything, not a word," Charles explains. "He just sat there, really impassive, and you could sense he was looking through the back of your head. Twenty minutes into the conversation, he cracked his knuckles, and I thought, 'He's interested.'
"When we were done, he finally said, 'Well, I've got a meeting at 12, but I'd like you to stay until this afternoon."
That first meeting had been a demonstration of Fatjo's often calm, deliberative, and somewhat secretive manner. The second was quite different in tone. "Tom started on this roll," Charles remembers, "and he just blew me right out of the water. He was proposing a national distribution system, a program that health professionals could buy into, allowing them to become entrepreneurs . . . . I mean, I'd been thinking nickel and dime, and this guy is talking billions."
On July 29, in Spring Arbor, the Kuntzlemans and Fatjo signed a still-confidential deal giving The Houstonian exclusive rights to Living Well. While waiting for lawyers to work out the final details, Tom and Charles, avid practitioners of what they preach, shared some yogurt beneath a tree, then went for a six-mile run. Charles even penned a commemorative poem in honor of the signing: "After Campbell's we had hit a real low,/ But we caught our breaths and said 'We'd go.'/ Go on our own to sell Living Well/To teachers and leaders and those who sell . . . ." Doggerel it may have been, but it captured the spirit of the moment.
Today, thanks to that bit of serendipity, Living Well is a $20-million-a-year operation headed by Fatjo. In a little over two years it has trained 2,900 individuals employed by 25 different companies and institutions.
That, however, is considerably less than half the story of this surprising company-in-the-making. "The Gospel According to Fatjo" observed that the man's career has consisted of a series of missions -- to become an entrepreneur, to build a national company, to devote himself to fitness. Fatjo now has a fourth mission: to build a second national company, this one based on fitness, that could surpass even Browning-Ferris Industries in size. Already, Living Well has embarked on a two-year $100-million acquisitions effort designed to make it a significant presence in 50 major cities. By 1989, Fatjo claims, Living Well will be "the IBM of fitness."
Such a prediction, if anyone else were to make it, would sound like idle boasting. In Fatjo's case, skepticism is allayed by a simple fact: Fatjo is the man responsible for BFI, the IBM of trash.
Browning-Ferris Industries's rapid rise to the ranks of giant U.S. corporations -- with 15,500 employees and annual revenues of $953 million, it controls about 8% of the entire U.S. market -- was unusual enough. Even more unusual was the fact that Fatjo, in effect, created a brand-new national industry. Most waste-removal companies, he discovered, were small, local operations, typically owned by men in their fifties, without much capital for modernization or expansion. The companies and their owners stood to gain a lot from the money and expertise a buyout by BFI could provide. BFI, for its part, stood to grow by acquiring as many such companies as it possibly could. At one point, Fatjo and his management team were averaging five acquisitions a month. Put together, all these acquisitions made a national company where none had existed before.
In 1975, Fatjo left BFI. "The company was going well, he explained to INC. in that earlier article. "It had strong management, was being operated on a regional basis by good people, and wasn't going through a strong growth period. There was no big need for me." He had, moreover, other things on his mind. Building up BEI had taken a toll on him -- on his personal life, and on his body -- and he had subsequently become something of a physicalfitness buff. Now he wanted to create "a center that would have a positive impact on the lives of busy people, that would help them to be more productive for a long period of time.
