A Conversation with Lex Knox, Chairman & CEO, Terminix Service

May 8, 2017

Terminix Service, Inc. was founded in 1947 in Columbia, S.C. when Thomas P. Knox started the franchise with his three adult children—Juddie Knox Fortson, T.P. Knox Jr. and Marion Knox Sr. Now seventy years later, the family owned and operated franchise of Terminix International is the ninth largest pest control company in the country.

By Alan Cooper

MidlandsBiz:
Where were you born and raised?

Lex Knox:
I was raised in Columbia, SC. I went to public schools here and graduated from Dreher High School. After completing high school, I attended The Citadel where I graduated with a bachelor of science degree in business administration. After that, I had a commission in the Army for a couple of years before returning to Columbia. At that time, I was uncertain what to do, but eventually decided to join the family business, Terminix Service.

MidlandsBiz:
Talk briefly about the history of the family business.

Lex Knox:
My grandfather, Thomas P. Knox, had been somewhat of an entrepreneur in the early part of the 20^th century. He owned a couple of businesses in his career, but had sort of retired at the beginning of World War II. After the war, he saw an advertisement for a Terminix franchise up for sale. He thought the termite business presented an excellent opportunity because people would be inclined to protect their most valuable asset, their home. The termite business would also be a somewhat recession proof investment. In 1947, my grandfather and his three children, Thomas Knox, Jr., Marion Knox, and Juddie Knox Fortson, purchased the business which at the time was doing about $90,000 in total revenue.

My uncle Tom Knox came into the business around 1952. Both my father and uncle had been commissioned officers in World War II and were very accomplished men.

MidlandsBiz:
What is your territory today?

Lex Knox:
Our area of operation is the state of South Carolina and the western third of North Carolina, as well as a few counties around Augusta, Georgia. It is a relatively large area, but a restricted area in which to grow. There were initially five branches between Columbia, Charleston, Asheville, Charlotte and Greenville. Over time, the business has been very fortunate and blessed to continue to grow.

MidlandsBiz:
What are your current lines of business?

Lex Knox:
Initially, the business was restricted to termite work. In the late 1950’s, we got into the pest control side of the business, namely, environmental insects that infest people’s homes, but do not eat or destroy your home: roaches, ants, silverfish, mice etc. Pest control is a repetitive service, as opposed to termite work, which is initially a much more involved and labor-intensive process. As far as the Terminix franchise was concerned, the pest control work was not initially allowed, but my cousin, Thomas Fortson, really started to push and promote pest control. This line of business has really flourished for us over the course of time, and we now also offer mosquito and wildlife control, as well as bed bug elimination.

MidlandsBiz:
How has the business grown over the years?

Lex Knox:
We have been able to split our branch operations in order to get closer to our customers and get better market penetration. As a result, our initial five branch operation has now expanded to 54 branches with a little over 1,100 employees. Operations are divided up into six different regions, each of which is somewhat unique in their own delivery of the service, but they generally follow our standard procedures for termite and pest control.

Termite work has expanded over the years to include moisture work. We do a lot of sub structure moisture protection to protect homes from the effects of moisture, fungus and rot. We have developed a level of expertise in anything that has to do with protecting the foundation of the house. We also do a significant amount of repair work to homes and have developed great talent and expertise in that area.

MidlandsBiz:
Outline the competitive landscape of your industry?

Lex Knox:
The pest control business is in itself very easy to get into because it generally has low capital requirements. Many people have worked for large companies and then started their own business. As a result, there are over 20,000 pest control companies in the United States.

MidlandsBiz:
What is the key to your success?

Lex Knox:
The reason we have been successful is our people. We invest in our people, we give them incentives to be productive and grow and be successful in their work with Terminix. We have a pay plan that promotes people being productive and a profit-sharing plan for our managerial personnel to encourage them to not only grow the business, but also be efficient and effective with their management skills.

It all comes back to people. You have to recruit the right type of people, making sure they are properly vetted as much as possible. We have invested a significant amount in our training program, staff and facilities. We need to make sure that our employees are properly trained not only for pest control (to be in compliance with the many rules and regulations that govern our industry), but also for learning our own internal policies and paperwork.

We also constantly try to preach a message of doing the right thing for our customers. We advocate an upside down pyramid chart—a non-traditional organizational chart—that shows the customer at the top, then our front-line service personnel, then our branch managers, then at the bottom of the chart, our corporate officers. We feel this reflects where the success of the business comes from. It comes from our customers and that relationship our employees develop with the customers. We are invited to our customers’ most intimate location – their home. We need to be in a trusting relationship in our order to be successful.

MidlandsBiz:
What are you most proud of?

Lex Knox:
We are particularly proud this business has lasted three generations now and is a seventy-year enterprise. We have grown to be ranked in the top 10 pest control companies in the United States doing over $120 million dollars in business. We provide job opportunities and employment for over 1,100 employees, and this is the measure of the true success of the business.