Latest / Family Business Stories with Fexingo: Succession, Legacy, and Multi-Generational Companies / How the Murdick Family Built a Fudge Empire on Mackinac Island
Transcript
- Lucas: There's a small island in northern Michigan where cars have been banned since 1898. You get around by horse, by bicycle, or on foot. And for over 140 years, the biggest attraction has been a single block of fudge. Luna: Mackinac Island. I've been there. The whole place smells like sugar and horse manure. And the fudge is genuinely good — not just tourist trap good. Lucas: Exactly. The family behind the original fudge shop is the Murdick family. They started selling fudge in 1887, and today the business is run by the fifth generation. But what's interesting is how little the recipe and the process have changed — and how that conservatism is actually the strategic moat. Luna: So no automation? No secret factory off-island? Lucas: None. Every batch is still hand-paddled on a marble slab. The ingredients are basically sugar, cream, corn syrup, butter, chocolate, and vanilla. That's it. They don't pasteurise differently, they don't add preservatives. The fudge has a shelf life of about two weeks at room temperature. Which means 99 percent of it is consumed on the island. Luna: That's a supply chain that barely exists. It's not a logistics business, it's a place-based experience business. Lucas: Right. And the economics of that are brutal if you think like a growth investor. Mackinac Island's tourism season runs from May to October, but the peak is July and August. The Murdicks do roughly 80 percent of their annual revenue in those two months. That means they have to staff up from maybe 20 year-round employees to over 100 seasonal workers in a matter of weeks. Luna: And what about the competition? There are like a dozen fudge shops on that island now. Lucas: There are fourteen last time I checked. But the Murdicks have two advantages. One, they have the oldest shop on the island — right on Main Street, prime foot traffic. Two, they still make fudge out in the open, in front of customers. The paddle show is part of the product. Other shops have closed kitchens. Tourists want to watch the fudge being made, and Murdick's gives them that. Luna: There's a line out the door every time I've walked past. People will queue twenty minutes for a half-pound slab. Lucas: And that half-pound slab sells for about twelve dollars. Their margins are actually decent because there's almost no marketing cost — the island itself is the marketing. But the real challenge is succession. The fifth generation is in their thirties and forties now, and they're deciding who takes over. Luna: I read that the current owner, Rich Murdick, is in his late sixties and he's been running it since the 1970s. That's a long tenure. Lucas: Yeah, Rich took over from his father. And he's got three kids. One is a lawyer in Chicago, one is a teacher, and one works in the shop summers. The one working summers seems like the obvious pick, but there's tension because the others feel entitled to a share of the business even if they don't work there. Luna: That's the classic family-business dilemma. How do you split ownership and management? You can't have five people making decisions about paddle technique. Lucas: Exactly. And the Murdicks haven't solved it publicly. But what they have done is keep the business debt-free. They own the building, they own the equipment outright. So there's no pressure to sell or franchise. They can afford to be patient. And honestly, that's rare. Luna: So if a sixth generation does take over, their job is essentially to not screw up a 140-year-old recipe. That's a different kind of pressure than scaling a startup. Lucas: It is. And it reminds me of something. If these conversations have moved your work forward in some small way, we keep this show ad-free and listener-supported. There's a link: buy me a coffee dot com slash fexingo. If today was worth a coffee to you, that's the link. No pressure, just an option. Luna: Yeah, and the coffee analogy actually fits here. The Murdicks have been selling a simple pleasure for a century and a half. Same spirit. Lucas: Exactly. So back to the fudge. Another thing that's interesting is how they handled the 2020 season. The island shut down tourism almost entirely. The Murdicks had to decide: do we make fudge and try to ship it, or do we just close? Luna: They started shipping, right? I remember seeing a news story. Lucas: They did. They set up a very basic e-commerce site — basically an order form and a shipping calculator. And they shipped fresh fudge via overnight courier. It worked because people wanted a taste of normalcy. But they also lost money on shipping because they refused to charge customers the full cost. They ate the difference. Luna: That's a brand decision disguised as a logistics problem. Lucas: Exactly. And it paid off in goodwill. When the island reopened in 2021, their sales actually exceeded pre-pandemic levels. People remembered that the Murdicks treated them fairly when the world was upside down. Luna: So what's the lesson for other family businesses? Is it 'don't change the recipe, but adapt the channel'? Lucas: I think it's more specific than that. The lesson is: know which parts of your business are sacred and which parts are negotiable. For the Murdicks, the recipe, the open kitchen, the hand-paddling — those are sacred. The distribution method, the pricing for shipping, the seasonal staffing model — those are negotiable. They changed what they had to and kept everything else the same. Luna: And that's harder than it sounds. Most businesses either change too little or too much. Lucas: Right. And there's a temptation when you're a fifth-generation owner to think that everything is sacred, just because it's old. But the Murdicks prove that you can honor tradition without being paralyzed by it. They tweaked the packaging, they added a few flavors — peanut butter, maple walnut — but the core product is identical to what their great-grandfather sold in 1887. Luna: I also wonder about the labor piece. Finding people who can hand-paddle fudge eight hours a day in a hot kitchen — that's a dying skill. Lucas: It is. And they've dealt with it by training in-house. They hire mostly college students and train them over a few weeks. The turnover is high — most stay only one or two summers — but the training process is standardized. They have a system for teaching the paddle technique that hasn't changed in decades. Luna: So the knowledge transfer is part of the business model, not an afterthought. Lucas: Exactly. And that's something that a lot of family businesses overlook. They assume that because the founder knew how to do it, the next generation will just pick it up. But the Murdicks have an explicit training program. They even have a video library of paddle techniques that goes back to the 1980s. Luna: That's surprisingly sophisticated for a fudge shop. Lucas: It is. But that's what it takes to survive 140 years. The business looks simple from the outside — fudge on a slab — but underneath it's a carefully managed operation with clear rules about quality, staff, and succession. They don't advertise that, but it's there. Luna: So what happens next? The fifth generation is in charge now, but the sixth is deciding who steps up. Lucas: Right. And I think the Murdicks will navigate it the same way they've navigated everything else: slowly, deliberately, and without outside investors. They don't need to grow. They just need to endure. And that's a perfectly valid business goal. Luna: Endurance as a strategy. I like that.