After Jeff and Carol Hastings signed their franchise deal with the drug-testing franchisor ARCpoint Labs of Sacramento in 2007, the couple rapidly discovered that their business could be considered a leading indicator for the local labor market.
“I didn’t realize when I bought this business … that most drug testing is done when employers are hiring new employees,” Jeff Hastings said. “In a recession, they’re not hiring. They’re mostly just letting them go. We had to really, really hustle to open a lot of accounts. When we opened our doors, we didn’t have a single account. Now we have over 500 accounts.”
Besides hustling for accounts, Hastings said, their business also has benefited as their franchisor has added or expanded business lines such as DNA testing and telehealth services. Hastings has owned other businesses since leaving behind a corporate marketing career in 1993, including stints at Coors Brewing Co. and Clorox, but not one of his other enterprises has resonated as personally with him as ARCpoint.
One of Hastings’ daughters, Kati, died at age 17 as a result of heroin use, he told me. He and Carol, Kati’s stepmother, have hung pictures of her in their business’s waiting room at 1578 Howe Ave. Kati was an aspiring dancer, Hastings said, and she had been tempted into using cocaine as a way to control her weight. She ended up with a habit that she couldn’t afford and got caught stealing to support it.
Hastings’ ex-wife put their daughter into a six-month outpatient rehab program, and both parents breathed a short-lived sigh of relief when Kati completed it in 2003.
“During the course of doing that rehab program,” Hastings said, “she met a guy who was a heroin dealer. He was also in that program, so they graduated on the same day. A day or two later, this guy came and said, ‘Hey, let’s celebrate getting out of there.’ He shot her up with heroin, and the substance that was in the heroin killed her. She went into cardiac arrest. It was ruled a wrongful death.”
A few years after Kati’s death, Hastings began to seek another line of business. He had been installing putting greens for golfers but wasn’t getting the returns he wanted, so he considered pizza franchises, burger joints, even an O-ring manufacturer before he stumbled upon ARCpoint.
Hastings said he had an emotional response right away: What if he could prevent other parents from going through what he had experienced?
But he also wanted to be level-headed. He explored the industry and discovered that no single national brand dominated drug testing. Instead, there were many independent operations. Hastings had been the new products marketing manager when Coors had introduced Coors Light, and he felt that he could use his expertise to help bring visibility to ARCpoint.
He also liked the numbers he had seen from the franchisor: “It looked like, if we had about 250-300 clients, you would pass break-even and you would start really making some money. ... A client, on average, would send you five employees per month to be tested.”
Of course, the Hastings didn’t count on the Great Recession. They were lucky during those first years, he said, if one client sent one employee a quarter. He joined chambers of commerce and booked public speaking engagements to recruit clients, Hastings said, and he and his wife focused on exceeding customer expectations. Today, he said, most new clients find them through customer referrals or online search engines.
“This is a crazy business,” Hastings said, “Every time you think you’ve seen everything, something new comes along. Yesterday, I got a call from a prospective client, not a construction company, not a staffing agency. You would never guess who called me and wants to have a drug-free workplace policy and a drug-testing program: a marijuana store. Of course, she says, she won’t test for marijuana, but she will test for the harder drugs because she’s got a couple people who she thinks come to work really loaded.”