Earlier his week I heard from a couple of people who notified me that Foundation Partners Group (FPG) apparently had a recent round of employee layoffs. That seems to be confirmed by employee and now former employee posts on Reddit and other conversational websites.  One of those individuals sent me this comment that I found very interesting:

 

“Let’s face it – when you expand at a rapid pace, purchasing down-market funeral homes that typically have a price-conscious demographic, and then you rapidly increase the price point, things aren’t going to go well.”

 

What I found interesting was the part about the “price-conscious demographic“.   The question, I would pose as to this comment is, “Is having a clientele of price-conscious consumers an uphill battle as far as funeral home roll-ups are concerned?”

 

Over the years, Foundation Partners Group has made no secret that it often targeted cremation-centric Death Care businesses as acquisition targets.  And, in my thought process, many cremation-centric businesses also seem to be low price-point leaders to consumers.

 

I bring up that point because since the 1960’s the blueprint for roll-up strategies as envisioned by Robert Waltrip, founder of SCI,  has been to acquire funeral homes that held a brand loyalty by consumers, attempt to continue the level of service, consolidate back-room and supplier expenses, and raise prices to cover the debt.

 

Using that formula, if you didn’t have brand loyalty that would withstand some price increases, it does not seem that the concept of these types of “roll-up” acquisitions would work.  Using a thought process on the flip-side of that, if consumers were price-conscious and using a firm because of those low prices, then you would think that the raising of those prices might cause those “price-conscious” consumers to look elsewhere if prices were raised.

 

Has that been part of Foundation Partners Group’s challenges as they have grown to over 200 properties?

 

I wrote something similar to this situation with this article announcing Foundation Partner Group’s recent leadership change of only one month ago.  I made this statement which I bring up again in today’s article:

 

“Foundation Partners Group has been, in my opinion, the experiment on whether the Robert Waltrip inspired philosophy of building Death Care scale through acquisition can work in a cremation-centric “price-point” business as well as it has worked in the traditional funeral home business model.”

 

After seeing the multiple leadership changes and now these layoffs, one might have to question if acquiring and rolling-up “price-point” businesses in Death Care is a workable strategy.

 

Asking Artificial Intelligence:  Doing research for this article I asked Gemini AI if a “roll-up” strategy can work in a price-conscious business environment and it gave me three examples:

1. Calibar Collision — “Rolled-up” over 1,800 collision centers.  According to Gemini AI their secret was using their acquired scale to get better vendor pricing that helped push “lowest cost repair estimates” for insurance driven estimates or repairs.
2. Mister Car Wash — They operate in the highly price-sensitive consumer discretionary space. They rolled up over 500 locations by standardizing the automated wash process and converting unpredictable revenues from pay-per-time washes into a highly-predictable process by converting to monthly subscription wash fees.
3. Allied Universal — A security guard service their secret was getting to a scale that they could bid on large government contracts that smaller family-owned operators did not have the personnel numbers to bid on.

 

Funeral Director Daily take:  It appears to me that with the examples cited of roll-ups of “price-conscious” businesses, they succeeded not by simply raising prices but by changing the entire modus operandi of the business operations that they were acquiring. . . . .knowing full-well that they were in a business that was not highly “brand loyal” and providing service and pricing that “fit their customers” proved to be wins for them.

 

I think it might be fair to say that I’ve yet to see a Death Care “roll-up” acquisition company that has succeeded by acquiring”price-sensitive” properties.  I would also think it is fair to say that “brand loyalty” of potential clientele is of utmost importance in making an acquisition.

 

More news from the world of Death Care:

• This Tampa Bay cemetery buries people in the woods.  It’s getting more popular.  Tampa Bay Times (FL)
• Green burials, mushroom suits, and water cremation:  What families should know.  Video news story and print article.  KBTX Channel 3 – Bryan (TX)
• New holiday for cremation placement established in Cold Spring.  AOL.com
• Eco-friendly burials available at Wildwood Cemetery.  Williamsport Sun-Gazette (PA)
• KIYC:  Some New Jersey residents are losing money invested in prepaid funerals.  Video news story and print article.  News 12 New York (NY)

 

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