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Alright, so imagine this, a kitchen table. And it's 1978 in suburban Chicago. Two men are sitting there, Dominic and John, talking about a dream. A dream that involves starting their own business and creating something that the janitorial industry has never seen. Now, they've each managed to get a $3,000 home equity loan to to start a company built on something radical, treating customers like family. Over the next 40 years, they would build not just a business, but a beloved institution. One that didn't just sell cleaning and janitorial supplies, but they trained, supported and stood by thousands of small contractors across the country. The name of that company, John Don. This is the story of how two men built a national brand from their garage. And how a private equity firm collapsed it nearly overnight. So where did their journey start? Like I said, it began at a kitchen table. In 1978. Dominic Powell and John Powella didn't just pool their money. Together they brought together their talents and ideas. And Dominic, better known as Nick, was the front man for their venture. His down to earth personality and his love for helping people made him the perfect person to connect with customers. And John, his nephew, took his affinity for numbers and logistics and handled the operational side. And together they built a janitorial, carpet cleaning and restoration supply distributorship that took off and grew to over 20 plus distributorships nationwide over the span of almost five decades. So how did this well established industry powerhouse end in bankruptcy in May of 2025. That's the story we're about to explore now. I was one of their customers, so I was shocked when I heard they went out of business. This isn't just a case study for me, it's a story I want to tell because I wanted to know what happened. I had friends that worked in this company and I benefited from their philosophy as a business. I saw their culture in action and, and loved it. And they were a great company. And as I researched what happened, I felt like, you know what, I need to share this story with my audience because it's a cautionary tale of what happens when a legacy company is bought by a private equity firm. And that private equity firm uses a high risk strategy and it fails. So first let's look at the journey of the two men, Nick and John Poella, and how their belief that when your customers succeed, you succeed and, and how that belief set them apart in their industry. One of the reasons why I wanted to share their story is because this isn't just a story of one company or a story of two entrepreneurs and their journey. It's a lesson in modern capitalism and everyone in business needs to understand it because one day every business owner is going to want to sell their business and they will likely get offers from private equity firms. So it's best to know when it's a good move to sell to a private equity firm and when it's not. John Don was the type of company, mainly because of the endearing qualities of Nick that could secure your loyalty on a handshake rather than a contract. Nick and John Poella believed in service, the kind where you remember names, follow up with phone calls, even show up at the customer's job site if that's what it takes. And Nick, like I said, he was the people person. I remember the first time I met Nick and this was back probably in mid to late 2000s. So John Don was really well established at this time and I was attending a week long seminar at their Atlanta facility. And it was about the third or fourth day and we were invited to stay for dinner after class. The menu was simple, burgers and hot dogs and all the regular cookout type sides. And as I was approaching the grill, I saw this older gentleman donning an apron and manning the grill. And he saw me walking over to him and offered me a beer from one of the coolers nearby. I obliged and we started chatting. And it wasn't until about 10 minutes into the conversation that I realized, I'm talking to the owner, I'm talking to Nick. Nick, a multi millionaire owner of a billion dollar industry giant, is in the parking lot of one of his locations cooking burgers and hot dogs for his customers. And the conversation was as simple as one that you would have with a neighbor. He was just that kind of guy. His nephew John was more behind the scenes. And I don't remember if I met John, but I knew what he did. He made the warehouses run. He ensured orders shipped on time and brought the operations and the discipline to scale. Him and Nick's vision and what made John Don special is that they focused on what other companies at the time overlooked. They focused on training, providing real tech support, overnight delivery of their products. They help their customers, which was mostly small business owners, win contracts, solve problems, and learn how to grow to scale. They lived an immutable business principle that Zig Ziglar famously penned. You can have everything in life you want if you help enough other people get what they want. Which is really a spin on what Jesus said over 2,000 years ago, it's better to give than to receive. Now, their growth and success didn't happen overnight, but rather over time. John Don's commitment to their customers led them to become an industry powerhouse with 20 plus locations, hundreds of employees and one of the most respected names in the cleaning and restoration business. They weren't just a supplier, they were a partner. And if you ever walked into one of their showrooms, you couldn't help but see the slogan, Partners for Success. Well, that slogan ended up not being just a slogan, it actually was their business model. They figured out that when their customers thrive, they're going to become better customers and John Don will thrive. So they invested in educating their clients. They hosted technical training, hands on workshops, industry certification classes, and their truly unique week long flagship course, Strategies for Success. And anyone who's been to that course knows it was more than just a seminar. In fact, I attended it myself and I can tell you it was packed with real world fundamentals. It was the first week long course being offered to small business owners in the janitorial carpet cleaning and water damage mitigation industry, which is mainly blue collar owners. And you weren't learning how to clean anything or dry anything out. You were learning how to build a budget, how to read Your P and Ls, how to understand cash flow. They brought white collar tools to a mainly blue collar dominated industry. They helped facilitate a mindset shift that we all needed so that small business owners could go from working in our business to working on it. Now, I don't really even remember what the course cost. Could have been $5,000, could have been $10,000. I don't really remember. It's worth every penny. But what I do remember is how they priced it. What they ended up doing was prorating your fee based on how much product you bought from them. And it wasn't just a sales tactic, it was a loyalty strategy. They knew that the more you bought, the more you were really trying to grow your business. So they wanted to invest in you because they wanted you to know they believed in you and that they were there to help you win. And that's how they built their loyalty. Not through low prices, but by investing in every relationship. And that was Nick's philosophy to the core. Nick wasn't the guy looking at spreadsheets trying to figure out how to squeeze out more profit. He was a guy that jumped on trucks, visited job sites, grilled burgers at appreciation days. I even heard a story where he once helped a customer find housing after a flood. You don't do that kind of thing as a business move. That's just who he was. And because of that, people loved him. In fact, in 2017, he earned a lifetime achievement award, not for what he earned, but for what he gave. So when Nick passed away in 2022, the industry lost a giant. But let's back up. In 2021, the Powella family sold John Don to Incline Equity Partners, a private equity firm. Hey, friends, it's Dave. And I want to give something back to you, my listeners, as my way of saying thanks for supporting this show and thank you, and thanks for supporting your local business community that we all care a whole lot about. So right now I'm offering a free online business readiness assessment. And what that is is it's an online assessment. It's a series of questions that you can do online that help you see exactly how sellable your business would be if you needed to exit today. Now, you might. Selling your business might be years away for you right now, but getting it ready to sell provides some immediate benefits. It becomes more profitable, it runs smoother with less stress. It gives you the owner more freedom. And as a bonus, when the time comes, it can be worth hundreds of thousands, maybe even millions of dollars more. So I'm offering this now because I want to thank you, my listeners, but I can't promise it's always going to be free or that I'll always have the time to review it personally with you. So while it's available, click on the link in the show notes, take the assessment and see where you stand, and then start building a business that gives you freedom now and a bigger payday now and later. All right, back to the show. So what is a private equity firm? A lot of us have heard the term, but don't really have an idea of what a PE firm is, is, or actually does. So let me explain what a PE firm is. And for all of you who already understand what a PE firm is, I apologize, but I'm going to oversimplify this for the sake of brevity. So essentially, a PE firm buys businesses and tries to sell them a few years later at a higher price. This illustration might be helpful. Think of a PE firm like a property management company, and the businesses it buys are like its rental properties. The PE firm rarely runs the businesses they buy, they just own them. Kind of like how a property management company doesn't try to run the businesses in the properties they lease, they just lease the property to the business and that's it. Now, each business in a PE firm is called a portfolio company. Now, what's the goal of a PE Firm. It's to buy a company, boost the value of it, and then sell it for a fast profit. Kind of like flipping houses, because there's high risk to flipping businesses as opposed to flipping houses. PE firms are often set up where they form an independent LLC for each company they buy so that the company is responsible for its own success or failure. And the PE firm is never liable for any lawsuits or debts that result from from each company's actions. So they're well insulated even though they own these companies. So with John Don, Incline used something called an LBO or a leveraged buyout. And what that means is that they borrowed money rather than use their own money to make the purchase of John Don. Then they transfer that debt to the company that they bought. In this case, because John Don had decades of financial stability, Incline used John Don to borrow massive amounts of money so that they could then have John Don pay them back and pay hefty fees. So to paint this picture a little bit more accurately, and I'm not going to use real numbers, but let's just say that Incline got a loan for a billion dollars to buy John Don from Nick and John. Then they set up an LLC so that John Don is its own entity. But because it had a 40 year strength of financial stability, John Don can easily get a loan for $5 billion. So incline has them get that $5 billion loan, then takes the $1 billion back to pay back their loan, and then takes 4 billion in management fees, which is a maneuver called dividend recapitalization. So John Don is now loaded with crushing debt, but gained nothing from the loan or its new owners. So with this huge debt sitting on them, the pressure to grow was intense. So John Don expanded product lines, bought smaller firms, and even slashed prices to win big accounts. To their longtime clients, they still operated the same and even seemed like they were offering even better deals than before. But behind the scenes, things were changing. Budgets tightened, pricing turned erratic, and they were losing money where they were once profitable. In essence, they were a sinking ship. To make matters worse, all of this was happening post Covid, where inflation was spiking, shipping costs soared, and unfortunately, John Don support first model was being replaced by short term high risk financial maneuvers. Now here's a universal truth. When you're running a business or running a household and debt becomes your biggest monthly expense, you are in trouble. No breathing room means no margin for error. And that's just not possible. If all your money goes to lenders and there's nothing left to save, you're not building a business, you're heading towards bankruptcy. In business, having money left over is called net profit. For a household, it's called a savings account. But in either case, if it doesn't exist, it's called a crisis. So while the private equity firm Incline was not involved in the day to day running of the business, they replaced Nick and John with a new CEO and a new cfo and with a debt structure that forced John Don to focus on high risk financial maneuvers. Now, they kept most of the employees, but the direction of the company was an overly aggressive growth at all cost mentality because they had a huge loan to pay back, and that's the primary goal of a PE firm, is to grow their annual sales so that they can sell the company for a profit in a few short years. It seems that this overly aggressive strategy was not working out because in early 2025, John Don's current CEO, Eric Royce stepped down. Weeks later, the company shut its doors and was filing bankruptcy. This came as a shock to everyone. Employees, vendors, the lenders, customers. They were all shocked. But here's the fallout. Employees lost their jobs, vendors went unpaid, contractors were cut off overnight and had to find a new supplier with whom they had no credit. And lenders had nowhere to go to collect the money that was due to them. Meanwhile, Incline remained insulated. Remember, they set it up for this to be John Don's debt, not theirs. Through a legal structure called an asset sale, Incline sold John Don to a competitor called Aramsco. Aramsco got John Don's inventory, equipment, goodwill, and even some of their employees. But because it was an asset sale and not a stock sale, they didn't inherit any of John Don's liabilities. Mainly the debt that stayed with the shell of a company called John Don, which is now empty and soon to be liquidated. And all of this is legal. How Incline is not responsible for this doesn't seem fair. But the way our legal system is structured, it's not illegal to do this. Now, to be fair, it doesn't look like Incline planned for this outcome. It seems they tried to grow John Don, but their high risk strategy, misaligned with the company's culture, led to an inevitable collapse. So there are some important lessons to learn here, not just for small business owners, but perhaps for employees, customers and vendors, because this story is definitely a wake up call. Now, private equity isn't inherently bad, but it's important to understand the inherent nature of a private equity firm. They're not built to nurture companies. They're built to extract value. Their core mission is to buy a business and increase its value and sell it within two to five years, or sooner if possible. They're not looking to build what Nick and John built. They're not thinking about a 50 year legacy. They're thinking about a fast turnaround. Buy low, increase value, sell high. That's their motto. So if you're a business owner considering a sale, you gotta ask yourself, is a private equity firm really the right buyer for what you've built? Because if you've built something like I built, where I had employees who had been loyal to me for over 20 years and customers that I truly cared about, then you're going to want your company to be carried forward by someone who shares your same vision. And no, a private equity firm is definitely not the right fit because they're not interested in your culture, they're interested in your financials. And as soon as they get in there, they're going to start rearranging things fast. The loyalty you built, the team you nurtured, the trust you earned, none of that really aligns with a quick flip. That kind of culture is great for longevity, but it's not built for speed. And private equity is all about a fast turnaround. So if you're a customer, employee, or a vendor of a business that's just been bought and sold, here's my advice. Pay attention, watch what's changing, and don't ignore the red flags. Because if something feels off, it probably is. A business can look perfectly healthy on the outside until the day it doesn't. And by the time it closes its doors, it's too late to do anything about it. Before I close, I want to make sure that this story reflects Nick and John's role in all of this. The good news is Nick and John's reputations remain intact. The sale of John don happened in 2021. Nick was out as soon as the deal closed, and sadly, Nick passed away in 2022. The collapse of John Don happened in 2025. So Nick will remain remembered by all who knew him for his generosity and leadership and not for John Don's collapse. And John, who helped guide the sale, stepped back once the deal was done and really had nothing to do with the collapse either. What they built lasted nearly 50 years. And in the end, it wasn't taken down by competition. It was undone by poor financial engineering. And that's the hard truth. John Don believed that when the customers succeed, they succeed. That philosophy created careers, communities and trust and overall helped raise the level of integrity of an entire industry. And though the company is gone, their legacy remains in all the small businesses that they helped grow. Thanks for listening to another episode of Locally Owned. I I hope this story made you think and reminded you that doing business the right way still matters. If this episode resonated with you, please share it with another entrepreneur. If you know anybody that was a customer of John Don, a contractor, a vendor, please share it with them. And remember, build for the long haul. Build like Nick and John did. If you have any stories you'd like to share about John Don, please leave them in the comments. And if you're thinking about selling your business but you're not sure where to start, I would love to help you. I sold my company a few years ago and now I'm fully committed to helping other small business owners find the right buyer and get top dollar for their companies. And I would love to help you get to that finish line as a winner. Leave me your email address in the comments and I'll send you a link to my calendar and let's talk. All right, thanks for joining me in this conversation, and let's keep journeying together. Sam.