Case Studies

Fullerton Building Systems

Delivering fast to market facilities to serve expanding demand

After 132 years, Minneapolis-based Fullerton Companies has seen it all, from boom to bust and back again, over and over throughout the company’s long history. Founded by James Fullerton in 1882 in South Dakota and later moved to Minnesota, the family-owned firm has grown to rank among the majors in the building materials and pre-fabricated construction industries.

The company today comprises three divisions: Fullerton Lumber The Builders Choice, its Minnesota-centered traditional multi-yard building materials operations; Fullerton Finishing Systems, based in Oklahoma, manufacturer of finished wall veneer systems using its Brickwal, Castwal and other proprietary exterior wall finishes; and Fullerton Building Systems (FBS) its fast-growing quick-build construction arm, based in Worthington, Minnesota, which focuses on fast-to-market construction for the light commercial and multifamily markets.

While the early focus of Fullerton Companies was on lumber—specifically retail-based business-to-business sales– the entry of big box stores into the builder supply market hindered its growth. To maintain market position, the company has adjusted its focus, and is now aimed at meeting the needs of mid-sized builders and the owners and developers of smaller-to-mid-size commercial buildings—market segments where the FBS division’s special capabilities also strengthen and expand the company’s overall market position.

Building on family values

Dave Walock, Fullerton Companies’ CEO, grew up in the construction business and over the course of a 30-plus year career, has held a series of senior management positions in the industry. He was hooked at an early age on seeing things built, the result of summers spent painting water towers for his father, a painting contractor.

In Fullerton, Walock found a firm and a family with values similar to those he had grown up with. Although Fullerton has grown to become a large company and a leader in its industry, at its core it continues to operate according to the “customer-first” ethic established by the company’s founders. “The Fullerton family’s own values are the foundation on which this company has been built,” says Walock, “and continues to be the compass that guides the way in which we do business.”

Fullerton Building Systems

Finding a niche

FBS’s market focus is somewhat specific: the lower-rise multi-family and single-story retail sector, encompassing quick-serve (QSR) and casual dining restaurants, and specialty retail and commercial facilities—a niche that offers solid room for growth for its “fast-to-market” construction methods. “Owners and developers call us if they’re cognizant about schedule and are looking to make the cash register ring as early as possible,” says Walock, “a promise we can deliver on that is of real economic value to them.”

The speed and efficiency of Fullerton Building System’s construction techniques are a great asset to the foodservice industry, particularly to giants like McDonald’s who are constantly re-imagining and improving their facilities and expanding their footprint across the country. “The Millennials want healthy food in a casual dining setting, but they want restaurants styled to meet their tastes, not like the places their parents took them to,” he says, a trend which plays directly into FBS’s skills and capabilities.

The fast-to-market promise is one that FBS delivers on by multi-tasking the construction process itself. Fullerton’s Finishing Systems division assembles the wall panel veneers in a weather-protected factory setting while site work is still active, cutting weeks off the production schedule on a typical project.

As companies like McDonald’s work to blur the lines between quick-serve and casual dining, helping to solve their construction challenges has brought Fullerton great success, even through the course of the recession.

“Franchisors in particular saw value in continuing to build when costs were reduced, especially using our fast-to-market approach,” says Walock. The corporate giants who continued an active construction program through the economic decline now find themselves ahead of the game as the market stabilizes. “Other franchising corporations are now rushing to catch up,” he says.

Walock finds it encouraging seeing his markets gaining more traction after the economic downturn. He points to current growth in regions that had long been dormant as a sign that the economy is coming back strongly. With new projects sprouting throughout the Midwest, particularly in the Dakotas, as well as in other areas around the country, he sees steady growth prospects for his company.

“Our philosophy is to manage where we are at and to grow at a manageable rate,” Walock explains. “Our customers have now weathered the storm and it’s showing in our results as well.”

Building loyalty

One of the biggest issues our national clients tell us they are currently challenged with is navigating the current nationwide shortage of skilled construction labor. But surprisingly, Walock also sees this as an Fullerton Building Systems advantage. “Being able to support our plant with good labor gives us a leg up,” he says. FBS meets the challenges of a resurgent economy and a thinner work force by tightly managing out plant workforce and rely on strong relationships it has built with its subcontractors and suppliers.

The company’s larger concerns are for the future wellbeing of its industry as a whole. “Construction as an industry on which to stake a lifetime career is not attracting enough young people,” Walock explains. Given today’s emphasis on higher education, the country’s need for vocational students has become lost in the race for college degrees, leading him to ask the question, “As the customers we serve become younger, how are we as an industry going to relate to them?”

Managing the construction expectations of its clients, who want and expect quick turnarounds, can also be problematic for an industry struggling to get fully back on its feet. “As a result of the downturn, no one is stocking or warehousing materials like they used to,” says Walock, adding further complications to building. FBS has offset such delays in product availability by self-performing much of the manufacturing process and developing strong alliances with key vendors. “We also make commitments to vendors for multiple products,” he says, pointing out that “creating loyalty is the better strategy.”

Tying it all together

With the return of economic stability, FBS is looking to the future, anticipating continued expansion across the industry. “We don’t want to only chase projects,” he says. “We want to win long-term repeat clients.” Over its long history, Fullerton has learned to appreciate the real value of solid, long-term customer relationships. As a result, its efforts are aimed at builders, owners and developers, wherever they may be located or operate, rather than targeting a particular region or market.

Moving forward, Walock sees the lines between Fullerton Companies’ three divisions blurring. “We operate with a different mindset from what existed before,” he says. “We are discovering the value of having three different operating units: the

Synergy they can create by working together, and the rewards they can achieve, not just individually, but collectively as well.”

With its solid core of relationship-based business, a strengthening workforce, and the family’s proven value system to guide its management, Fullerton Companies and its three divisions are sure to reap the benefits of a re-emerging and expanding, market.

Published on: May 4, 2015

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