After placing his first high school snack machine, Frankel noticed there were no snack machines in the cafeteria. He also noticed that the cafeteria lines were long, and many students weren't getting enough time to eat in the 35 minutes allotted. "Vending would help relieve some of the pressure," he reasoned.
But getting into school cafeterias wasn't as easy as placing machines in other parts of the building. Food and nutrition departments oversee what goes on in cafeterias, and in some cases, school boards need to approve any changes.
Frankel approached one school board with a proposal to place juice and snack machines in the cafeteria. In keeping with state law, he proposed machines carrying no carbonated beverages and no candy or snacks with minimum nutritional value. He offered to pay a fair commission based on sales volume.
The school board allowed him to do a one-and-a-half-year test in six high school cafeterias.
At the end of the test period, the school board was so pleased with the results that they decided they wanted to have vending machines in all 28 high school cafeterias. But instead of hiring Frankel, the school board put the contract up for bid.
They ended up awarding the contract to the vendor offering the highest commission, which wasn't Frankel.
When this vendor withdrew from the contract, the school board again put it out for bid, and again awarded it to the vendor offering the highest commission, which again was not Frankel. This vendor got into trouble with the school board for not paying commissions and also eventually withdrew from the contract.
Educating the customer
When the board finally allowed Frankel to do a pilot test in one cafeteria, he was able to prove that higher commission didn't necessarily generate the most revenue. Frankel had argued that product selection, name brand products, and more attentive service would bring higher sales, even at a lower commission. His results proved him right. The cafeteria took in twice the revenue they had earned at a higher commission.
The machines in the cafeteria are on during cafeteria hours, and the proceeds benefit the cafeteria program. "You can have machines in the cafeteria as long as the money is going to the cafeteria," Frankel said. State law prohibits food or snacks to be sold in competition with the cafeterias.
Family Vending Co. did a better job keeping the snack and juice machines clean, filled and working than the bottlers, who serviced the soda machines. Some principals were so impressed that they asked Frankel to take over the soda machines as well, forgoing the upfront payments they had received from the bottlers. These machines were mostly outside the cafeteria, and were subject to different rules.
Machines outside the cafeteria must be off until an hour after the last lunch period. However, state law says that soft drink machines do not have to have timers if they have at least one selection of 100 percent juice. It is up to each county what hours they want the machines to be operable if at least one selection is 100 percent juice.
Frankel reasoned that he could improve sales if the timers were removed, so he proposed placing machines that would include noncarbonated beverages along with soda.
This past year, Frankel successfully lobbied the school board to turn timers off in soft drink machines and let the machines run all day. He met with each of the six school board members individually.
Bottled milk proved helpful in Frankel's efforts to get into schools. In 2000, he persuaded a local dairy to provide him milk. He then convinced a high school principal to let him put glassfront milk machines in the school.
Milk helps open doors
Once one school allowed the milk machines, others followed. He now has about 20 dedicated milk machines in schools, and goes through about 1,000 cases of milk a week. He prices the local dairy's milk at $1.25, and the Hershey and Nesquik milk at $1.50.
While all of Frankel's trucks carry some refrigerated product, the company now operates one dedicated to milk deliveries.