Frankel differed from many start-up vendors by only purchasing new equipment. He recognized early on that newer machines offered more features and had fewer service problems than used machines. Hence, manufacturer financing programs were crucial to his early growth.
Vending management software also played an important role. Frankel learned about software programs at vending trade shows, and purchased his first management software shortly after bringing on his second full-time driver in 1989. The software kept track of sales and meter readings, and generated route slips.
Computerized accountability becomes critical once a company grows beyond a few routes, Frankel said. The profit margins are too thin to allow any cash drain.
To make sure drivers did a thorough job, Frankel opted to pay drivers a straight salary instead of commission. He believes paying on commission encourages them to focus on the larger accounts at the expense of the smaller ones.
Paying drivers a salary also proved beneficial when the company eventually expanded into the school market, which is seasonal. The company's revenues fall off during vacation time.
An early DEX convert
By the time he reached five routes, Frankel invested in DEX handhelds from Rutherford & Associates (acquired in 1999 by MEI). This was a huge investment for a company this size, but Frankel believed the payoff would be worth it. In retrospect, he thinks he was correct. The DEX handhelds provided excellent accountability, even though the learning curve was long.
"It was a struggle," he recalled. In the early days with the system, many of the machines did not report DEX data in uniform data streams.
"But it was the greatest thing I ever did," he pointed out. "I'm way ahead of everybody." The DEX-based sales reports also make excellent selling tools.
Drivers place their handhelds in the handsets when they return to the warehouse. The handhelds automatically generate orders for the next day's deliveries, and the drivers load their trucks -- 16-foot Isuzus -- for the next day.
Service manager knew handhelds
Frankel found it helpful to hire a service manager with experience with handheld computers, Mark Maloney. Maloney was able to train the drivers on the DEX handhelds, and he also oversaw integrating the currency sorter with the main computer system, enabling him to oversee coin and bill counting in real time.
It was also about this time that Frankel hired his first full-time salesperson, John Brewster. Brewster was a district manager for Sodexho Services Inc. who had relocated to south Florida from Trumble, Conn. Frankel was in no position financially to hire a salesperson when Brewster called him out of the blue, but as with DEX handhelds, he realized that the long-term payoff would be there. He was proven correct.
Brewster brought a lot of experience in preparing professional sales materials, and in developing healthy eating initiatives. The latter would prove useful to Frankel in his efforts to crack the public school market.
A turning point came in 1998. Family Vending Co. moved into a larger facility in an industrial park. It was at about this time Frankel realized that most secondary schools had soda vending but no snack machines. He decided there was a big opportunity in school snack vending. And the fact that other vendors in the area were ignoring it was not a good reason for him to do the same.
The school market beckons
Frankel first targeted one specific high school. He put together a proposal in powerpoint, incorporating the school's sports logo and audio simulated cheering.
He included images of product brands, noted the capabilities of his handheld computers, pointed out the improved reliability of the newer model vending machines, and offered a commission.