Flik International Corp.: walking the fine line between a family operation and a growing corporation

by Bill Carlino

From inception 26 years ago with a single account to its present-day status as a strong regional operator known for its exacting mandates on food quality and service, Flik International Corp. now must perform a delicate high-wire act between growth and maintaining its tradition of an intimate, family-run operation.

"If we can continue in the Flik tradition and yet evolve and grow with the industry, I feel we can be on the cutting edge of this business," says Rick "Ricky Post" Postiglione, president and chief operating officer of Flik.

Now imbued with the financial, marketing and purchasing efficiencies of Compass Group PLC, which acquired Flik about three years ago for $16 million, the company must regulate growth -- both internally and via painstaking account "assimilations" as a result of several recent Compass acquisitions.

"We've always maintained that growth for growth's sake would mean the end of the company," says co-founder Julie Flik, who together with husband, Ruediger Flik, launched the company in 1971. "Unless the Flik standards are in place and our people are properly trained, we won't last long."

Flik now services about 14P predominantly white-collar B&I clients and generates annual sales of some $150 million.

The company provides food and services management to such high-profile accounts in the New York-New Jersey-Connecticut area as Philip Morris, Marsh & McLennan, Allied Signal and Credit Suisse First Boston. Flik also ventured north along the Eastern seaboard to establish a foodservice presence in the Boston area with about 15 accounts.

Flik recently absorbed into its fold some 40 clients as a result of Compass' acquisition of Service America's B&I accounts. Next in line to be assimilated under the Flik umbrella are select accounts from Compass' acquisition of the food-management business of what was formerly known as Daka International.

"Those accounts have to be `Flik-enized'" Rudi Flik says. "You can't operate an account under the Flik brand without a `Fliker' in there. You can't just change the signage and run it as a Flik account without Flik standards. We will work with the existing staff in those accounts, but to some degree there is going to be some movement in management. The unit managers have to be trained in Flik procedures."

Flik began 26 years ago winning its bid to operate the food facilities at Sarah Lawrence College in Bronxville, N.Y., an account Flik continues to service. Recently, Flik completed a $1 million construction of a new pub/restaurant at the prestigious private school.

"When we first started out, we had to fight very hard to even get invited to a bid," Rudi Flik remembers. "That web of influence wasn't there yet. We used to say, `Wow, if we could just get Nestle, we'd be OK.' Then when we got Nestle, we'd say, `If we could just get MCI, everything will be all right.' Now, there's hardly a contract up where we don't get invited. But we need at least a 50-percent assurance that we can get it. If we don't get that, we don't even bid on it."

In fact, Flik's success in the tri-state markets was one of the reasons it attracted a more-than-casual interest from Compass. After the initial "feelers," acquisition talks quickly accelerated.

"Flik was very well known in its markets, and one of the stipulations of the acquisition was that the company continue operating under the Flik brand and that Rudi and Julie Flik remain on board," says Compass chief executive Michael Bailey of the acquisition.

"Compass obviously wasn't the first to approach us about buying the company," Rudi Flik says. "But the others didn't feel right. We sold the business to Compass for specific criteria: capital for growth, marketing expertise and purchasing efficiencies."

"A lot of what we do here relies on gut instinct, and there was a good gut instinct between ourselves and Compass, " Julie Flik adds. "The feeling we got from them was a sort of `We're purchasing you because you typify what we're trying to accomplish in this field.' He [Bailey] knew our business was special, and he wanted us to remain part of it."

"I always thought we purchased very smart and got the 'A' prices," Rudi Flik says. "But when we became part of Compass, we suddenly began receiving the 'AAA' prices."

Although the founding Fliks remain an integral part of the business, Postiglione, who was lured away from Sodexho USA six months ago, is being groomed as the eventual successor.

Steve Sweeney, the current president of Compass' Chartwells education division, was being groomed to run Flik after a 20-year tenure at the company, most recently as vice president of operations. However, upon Compass' acquisition of Florida-based PFM, Sweeney was asked to oversee that division by Bailey.

The PFM accounts subsequently were combined with those of Daka International, and Sweeney was shuttled to Daka headquarters in Massachusetts. However, upon the unexpected death of Allen Maxwell in January, Sweeney was appointed to assume the president's post at Chartwells.

A called Charlotte [Compass' U.S. headquarters] and told them if they were going to take Steve, then I want someone else," Rudi Flik says. "They said, 'Who do you want?' I told them 'I want Ricky Post.'

Julie Flik says: "Just because we've been acquired and Rick oversees much of the day-to-day doesn't mean we're not busy. Rudi and I try to get to as many accounts as we can. And those people who know Rudi and me know we're not sitting with our feet up on our desks, shuffling papers."

In addition to Sodexho, where he held a senior vice president's position, Postiglione is a food-management veteran at both Gardner Merchant and Trusthouse Forte.

But as part of an evolution in food management, Postiglione points out there has been a perceptible shift in the eating paradigms of corporate dining compared with the situation 10 years ago.

"People are working longer hours, and a lot of times they don't have the time to come down to the dining rooms, so we're experimenting with methods to bring the Flik dining experience to them," Postiglione says.

That strategy includes scaled-down kiosks in the account lobbies and meal delivery to desks or meeting rooms. In fact, Flik is testing a delivery system at several undisclosed law firm accounts in New York City.

"There are also flex hours to consider," Postiglione says. "Not everyone works the 9-to-5 shift anymore. As a result, we're doing more p.m. food breaks."

Another category that could figure prominently in Flik's future operations is special-function business.

"We do a lot of off-premise catering," Postiglione says. "It's strictly word-of-mouth. We don't do an), advertising. But it's something we could possibly brand in the future. It could potentially become its own entity."

And although national branded food concepts align more closely with other Compass food divisions than with Flik, Post says you have to listen to your customers.

"Branding is not the way we project ourselves, but if it makes sense or it's applicable, we may do it. Our pizzas are a tremendous product, so we really don't think we need a branded pizza concept. But if the client thinks they need it, we'd consider it."

To help grow and retain business, Flik recently brought aboard two account executives, Donna Wang and Bill Shannon, who are charged with boosting top-line sales in the form of new accounts and account retention, respectively.

Postiglione added that Flik recently began appointing group managers, executives who oversee a cluster of four or five accounts.

"You can't overload middle management. If you do that, you can easily lose sight of details as we grow the business," Postiglione says. He added that Flik has a team of five chefs that travel from account to account to work with unit managers on recipes and promotions.

"The account managers are closest to the customers and the clients," Postiglione says. "I try to have breakfast at least once a week with a group of managers, and we discuss what's going on out there in the field."

"We treat them [the managers] as if they're clients," Julie Flik explains. "They're the ambassadors out there. That's why I try to meet as many of the manager candidates as I can during the hiring process. Like a lot of things here, we go on instinct. Within the first couple of minutes I can usually, tell if a candidate has what it takes to be a Flik manager.