Q&A: Wild Birds Unlimited founder preparing for company’s future

Over the past 43 years, Jim Carpenter turned a single Wild Birds Unlimited store in Broad Ripple into a nationwide company with 360 locations that cater to bird-lovers and nature enthusiasts.

Now, with his wife, Nancy, he is preparing for the future by making Wild Birds Unlimited an employee-owned company. The Carpenters spent the past two years establishing an employee stock ownership plan to ensure the company’s culture will continue into the future.

An ESOP provides employees with an ownership stake in the company they work for by granting them stock in an amount usually based on tenure.

The Carpenters recently sold 30% of their shares in Wild Birds Unlimited to the ESOP. Jim Carpenter, 71, who has no immediate plans to retire, said that first step communicates to Wild Birds Unlimited employees and franchisees the intended direction of the company when he eventually steps away from day-to-day operations.

“We really want these owner-operators and vendors to continue to be part of who Wild Birds Unlimited is when Jim and Nancy Carpenter are no longer involved,” he said.

Carpenter talked with IBJ about his love of nature, how he got started and what the future holds for Wild Birds Unlimited.

What led you to start Wild Birds Unlimited in 1981?

I was pre-med at Indiana University Bloomington, and I’d say about my senior year is when I realized I was more interested in nature than being a doctor. And, also, it was very helpful that IU Med School said, “No, we’re not going to admit you.” And that just reinforced where my mind was.

I went to Purdue, got my master’s degree [in ecological plant physiology]. I was going to become a professor, but in the late ’70s, there were no jobs for professors. Everybody had taken them all up, and they weren’t retiring for a long time.

I was in the School of Agriculture at Purdue and in the Horticulture Department, and I saw people just going out and getting jobs using what they’d learned in ag school. And, so, I found a little job running a garden center, and I ran that garden center for a couple of years.

We sold a little bit of bird food, but I never really thought we had the right stuff.

What were your goals when you opened your first store?

When I started and I was just a lone little store in Broad Ripple, I wanted to make enough to pay the rent and have some cash on the side. I had no major growth plans. I just wanted to do really well in my one little store.

It wasn’t long, about a year and a half after I opened, [that] a nephew of one of my staff came down from Michigan to visit him. And he came back the next day and said, ‘I don’t like my job. How do I do what you’re doing?’ And I said, ‘Well, come back in six months, and I’ll sell you a franchise.’ And that really got the ball rolling.

Why did you and Nancy decide this was the right time to establish an employee stock ownership plan?

We’ve been doing this a long time. I just entered my 70s, and so we just had to look forward to what’s going to happen when we’re no longer active in the company or no longer in it. We have two daughters, but they’re not interested in being part of the succession plan, so that meant we had to sell the company at some point.

And you can imagine that I have had interest for the company from private equity [firms]. We’re well-known in the franchising industry, so there are people in that [industry who] are buying franchise companies to be part of their franchise-owning portfolio, so we’ve heard from them. I did my homework as best I can on what happens when you sell your company to different kinds of entities. So, basically, there can be both good results and bad results from selling to a private-equity company, and I’ve seen both happen.

Ours is a unique system, and I can back that up. You might hear that a lot. Ours is unique in that there is really only one bird-feeding franchise, so we really are unique. And part of that uniqueness comes from the culture we have here at Wild Birds Unlimited. And, so, what we really wanted to do was look at the continuation of that culture and continuation of the staff we have, and that really led us to the ESOP as a possibility.

Could you tell me about the work that went into putting the ESOP in place?

It was about a year and a half of work. Kind of slow at first, and the first six months of 2024 were really crazy with getting all of the ESOP stuff put together.

The first year was really done to create the team, and the team has to do with your accounting team, and we picked Katz Sapper Miller for that, and the legal team, and we picked Faegre Drinker for that here in Indianapolis. And then you have to figure out your third-party administrator, similar to what you would do for a 401(k). You have to figure out your trustee. And, so, it takes a long time to go through all the different options, talk to all the different people and figure out all the team players.

About a year ago in the fall, really, is when all the team starts working very diligently on all the pieces of the puzzle that have to be put together.

How did you get your employees involved?

You bring your very top senior folks into it within the last four to six months of when the transaction is going to happen because they need to be part of the due diligence that the ESOP appraisal company does. You need to have your senior team involved in that, and then that really gets their mindsets into what’s going to happen. And they were all very excited to hear that that’s the way we’re going.

That really then helps create the alignment of the leadership for when you share it with the staff, and then you have a big staff reveal day, and that was in June of this year, [at] which you tell everybody, “Well, we’ve made the decision to sell the company,” and you tell them that it’s to them. That’s a really fun day.

What was the reaction from your employees and staff?

Both happiness and relief.

They all know that I’ve been doing this awhile and I’m getting older and I’d probably sell it someday, and now they know the direction. I say direction because I only sold 30%. And 30% was, for me, what I was ready for. I wasn’t ready to be done being majority owner/CEO. I wasn’t done. But what this does is, it gets all of the machinery in place, all of that year and a half of work, and all the players are in place.

I told my staff that, sometime in the next 10 years, I will sell the other 70%, and then at some point, I won’t be CEO. I’ll hire another CEO. So, everybody knows the direction.

And what did you hear from your franchisees?

Any decision I make greatly affects all of our franchisees. We have 300 franchisees. And then it is also great positive news to them and also relief because they were also wondering the same thing: What’s going to happen to this company? A lot of them had been through their own corporate lives. This is their second life, so to speak, and they’ve been through many upheavals and companies that got sold, so there was a level of trepidation over what I might do with the company.

We had our annual convention of stores a couple of weeks after we transacted and then made the announcement to all the store owners. All I heard was just, thank you and congratulations. It was very exciting for them to know that we were going to continue with our culture and our team. That’s also kind of rewarding. It also means they like what we’re doing. They’re not wishing I had sold it to someone who would change the culture and change the players.

We’re happy with our culture, and so, it really just continues what my wife, Nancy, and I have built over 40-plus years.•