Jerry Dumais was just 16 years old when his father, a meat cutter at Budwey’s Market, passed away. A few weeks after the funeral, owner Frank Budwey took the teenager on board and trained him to fill his dad’s former position.
Today, nearly 30 years later, Dumais is manager of that same meat department in that very North Tonawanda store, supporting a family of his own.
“He takes care of his employees, that’s for sure,” Dumais said.
On Thursday, Budwey changed the course of Dumais’ life once again, announcing he would give ownership of the supermarket to him and the rest of the store’s full-time employees and managers.
The 33 workers – ranging in age from 21 to 62 – got the news at a banquet celebration Thursday night.
Here’s how it will work: Under a new corporation, Budwey will give ownership shares of the store to those 33 employees – some will get more than others – while retaining the majority of the shares. Employees will split the company’s profits in proportion with the amount of stock they hold. When an employee leaves or retires, the company will buy back their stock.
“Frank Budwey should be on the retail equivalent of Mount Rushmore for this,” said Burt Flickinger III, a retail expert and managing director of Strategic Resource Group, who is familiar with Budwey’s culture of mentoring and nurturing employees throughout the years. “That kind of generosity is unprecedented in North American retail history and in business history.”
The 66-year-old Budwey plans to stay on for the next 10 years and, when he retires, divvy up the rest of his own shares to two employees he has chosen to take leadership positions. If anything happens to him before then, he has a plan in place for who should take leadership and how his shares should be distributed.
Amanda Hoffert, an assistant office manager at the store, said she is “very, very excited,” to become a partner and co-owner. She started working at Budwey’s when she was 16 – 12 years ago.
Inspired by her job, Hoffert earned a bachelor’s degree in business administration from the University at Buffalo.
“I saw how the store grew and changed, and I wanted to be in this business,” Hoffert said. “And now this!”
It’s no wonder Budwey has so many loyal, long-term employees, Hoffert said. She has held side jobs at big-box stores, but never felt respected there. The atmosphere was nothing like Budwey’s.
“Frank told me a long time ago that I should never be afraid to come to him for anything,” Hoffert said. “And I take pride that the employees I supervise feel I’m just as approachable.”
The plan had always been for Budwey’s son, a bright young man named Justin, to take over the family business. But when Justin passed away unexpectedly at age 27 in 2009, Budwey was left without a successor.
“I wanted to get out after Justin passed,” Budwey said, sitting at his desk, surrounded by photos of his family. “I just didn’t have it in me to keep these stores.”
With his daughters uninterested in taking over, Budwey sold two locations, one in Newfane and one on Kenmore Avenue in Buffalo – stores he had bought specifically to broaden Justin’s holdings. When word got out that Budwey planned to sell the North Tonawanda store to Olean Wholesale, customers urged him to stay put. So when the Olean deal fell through, Budwey started thinking.
“The more I thought about it, the more I wanted to keep the store going for many, many years,” he said. “I want this to be my legacy.”
To give the employee owners a head start, Budwey will invest $1 million into store upgrades this summer, including new decor, scales, registers, produce and dairy cases, indoor and outdoor LED lighting, shopping carts and four self-checkout lanes. Half of that funding will come from his cashed-out stock in member-owned Olean Wholesale Grocery Co-Op.
Budwey has run the store on Division Street since he returned from military service in Vietnam in 1971. He is known among employees and customers for his generosity. He’s always the first to lend $5, they said, to buy employees lunch, to pay a hospital visit. He’s also something of a celebrity in North Tonawanda. So many shoppers stop to chat, employees said, it takes him half an hour to walk across the sales floor.
“People just love him,” Dumais said.
Budwey’s ownership transfer is not an Employee Stock Ownership Plan. Under that structure, the company buys shares from its owner, and those shares are distributed to workers. It’s a way for a company owner to cash out while “keeping the company in friendly hands,” said Loren Rodgers, executive director of the National Center for Employee Ownership. There are several local ESOPs, including Ferguson Electric, Harper International, and PrintLeader.
But this type of transfer, in which the owner is outright giving his company away, is unheard of, Rodgers said.
Employee-owned companies survive longer, go bankrupt less and have increased productivity, according to statistics from the National Center for Employee Ownership. They have an easier time attracting and retaining quality employees, and employees accumulate an average of 2.5 times more wealth, the data shows. There are also dramatic quality of life benefits.