Sam tells the story of Cintas — how Richard Farmer took over his dad’s $180K industrial laundry business in 1960 at age 21 and grew it into a $75 billion company. The conversation covers how Cintas expanded from washing rags to supplying and renting uniforms, then built recurring-revenue inroads selling fire extinguishers, cleaning supplies, and everything else to the same clients. Sam ends by reflecting on what it takes to keep a business in the family across generations.
Speakers: Sam Parr (host), Shaan Puri (host)
The Origin: Acme Industrial Laundry [00:00:00]
Sam: So in 1929, there’s this guy and he starts this company — very odd. He’s basically cleaning rags and uniforms for circus performers. Very strange start, but that’s how this company begins.
He turns that into a business and calls it Acme Industrial Laundry. He scales it up, but not by a lot — it’s a very small business. He grows it to where he’s doing laundry for other uniform businesses.
He started that in 1929. By 1960, his son — who’s about 21 years old — comes into the business and says, “Hey Dad, I would love to work for you and maybe take this over one day.” The dad says, “Yeah, sure, let’s do it.”
Richard Farmer Takes Over [00:01:00]
Sam: It does okay, but inevitably there’s a little argument between the father and the son. The father calls the son into the office and says, “Hey, look, man — this isn’t working.” The son is totally expecting him to say, “You’re fired, you’re out.”
Instead the dad says, “Look, this isn’t working — here’s the keys. You run it. Let’s see what you can do. I’ll step out of your way. Let’s see if you can pull this off.”
So this son — 21, 22, 23 years old, his name is Richard — takes control of the business and says, “Let’s grow this sucker.”
In 1960 when he takes it over, it’s doing $180,000 in revenue — something like $2 million today — and has 12 employees. He focuses on doing laundry for companies who need cleaning supplies: basically just washing rags.
He grows it, and it works out well. After about eight years, the business goes from $200,000 a year up to $1.6 million a year — the equivalent of around $15 million today. He’s expanded into laundering company uniforms, which is a very strange thing to get into. I didn’t even know that existed.
Cintas: From Laundry to $75B [00:02:30]
Sam: He grows this sucker for the next 50 years. They rename the company Cintas. Have you heard of Cintas?
Shaan: Yeah, I see their trucks all the time.
Sam: I see their trucks all the time too and I had no idea. Do me a favor — Google “Cintas market cap” and look at what it says.
Shaan: $75 billion.
Sam: It’s a $75 billion company. And their main business is still laundry — now they launder uniforms, but they also supply the uniforms. They make uniforms for all types of businesses. You’ll see a typical janitor wearing one, but it could be restaurants, it could be anything. They rent you the uniform and launder it for you.
And then they’ve expanded from there. If there’s a fire extinguisher in the bathroom of a restaurant, it probably came from them. If there’s cleaning supplies, it probably came from them — because once they made inroads into a business, they said, “Hey, along with your uniform we’re going to sell you all these other things.”
The Subscription Model [00:03:30]
Sam: I think they do something like eight or nine billion dollars a year in revenue, and it’s subscription revenue.
Shaan: Why is it subscription revenue?
Sam: Uniform rental. It’s called RaaS — Rental as a Service. That’s just what they do. They rent uniforms, so they get these recurring subscription businesses. And on top of that it’s truly recurring revenue because they’ll sell you all this other stuff and they’ve got those inroads.
Keeping It in the Family [00:04:15]
Sam: As the business was taking off, Richard Farmer starts getting older and thinks, “I need to figure out how to keep this within my family.” To this day, the Farmer family still owns something like 18-20% of the business.
He made it his mission to create this generational thing. He trained his children to help take it over — to make decisions about how to give away their money, and to govern the company. A family member isn’t the CEO, but they’re still involved.
The reason I looked this guy up is I’m very fascinated with how you pull this off — keeping your family in the business. I think it’s very hard. It’s high risk, high reward. I’ve been studying all these families who have pulled it off, and the Farmers have.
From the outside, there are a dozen other examples of people who tried and crashed and burned. My question to you is: is this something you aspire to?