Tuesday, November 20, 2007

Folz is Folding

Oceanside-based vending co. closing doors in December

By Joseph Kellard

"They have a cure for old age now," 79-year-old Roger Folz quipped as he slowly, carefully climbed the stairs in his office. "Die young."

On a pole suspended in the stairwell were 1-cent gumball machines that he once installed in stores nationwide, having founded Folz Vending Co. in 1949. Folz is now preparing to close the factory/ warehouse at his office, which he built 30 years later on Lawson Boulevard in Oceanside, for good. The corporation that now owns his company, Coinstar, will move its operations to Colorado in December.

Blame age for Folz’s heavy footsteps, but disappointment is also a factor. "I was expecting to die with my boots on," he said, "but with all the things that happened competitively, and big money going into different phases of vending, it’s been difficult. It was better to sell too soon than too late."

Folz started with $600 and 15 machines, and built his company into the world’s largest bulk vending operation. At its height, Folz had 170,000 machines in 48 states and Canada, and offices dotting both countries. Children — and adults — got their fill of gumballs, pistachio nuts, sour suckers, small toys in plastic capsules, glow-in-the-dark stickers and a variety of other novelties from Folz’s machines in mom-and-pop stores as well as major retailers from F.W. Woolworth to Wal-Mart. In 2002, the year before it merged with American Coin, a vending corporation three times its size, Folz rang up $55 million in sales.

Looking at the many photographs and plaques that crowd the walls of the main office, chronicling Folz’s rich history, you can understand his discouragement at the prospect of the vestiges of his modest business empire being shipped away next month. In his spacious personal office, Folz’s golf awards compete for space with oversized photos of his family: his wife, Adele, who, during the early years, stored the vending merchandise in their Plymouth, and their two children — his late son, Elliot, standing in a hard hat next to the skeletal structure of what would become the company’s 40,000-square-foot headquarters at 3401 Lawson in 1979.

Other photos show Folz shaking hands with the powerful friends he has made through the years, ranging from then U.S. Sens. Alfonse D’Amato and Daniel Patrick Moynihan and Rep. Norman Lent to David Rockefeller and George H. W. Bush. There are shots of Jerry Lewis and his March Of Dimes kids, whom Folz helped raise millions. Plaques recognize Folz as Toys "R" Us’s Vendor of the Year, and a framed letter from President Bill Clinton thank Folz for sending a vending machine to the White House.

When ask about letters from his customers, Folz instantly recalled a boy who wrote to him about the miniature NFL football helmets the boy collected from Folz’s machines. "He said that he spent $5 in coins trying to get a Jets helmet," Folz said, chuckling. "So I sent him a whole bag of them."

Folz said that he got his best advice from a friend in the vending business: Children are among the smartest buyers, so give them more value for their money. "The kids were very astute," Folz said. "If my machines gave them 13 pistachios and my competitor gave them 11, they knew right away to go to my machines."

He has always had a simple motto: beat the competition. "To come up with ways to do a better job with our service," he said.

At 21, after graduating from Woodmere High School in 1946 and while working as an errand boy at Merrill Lynch on Wall Street, he got the idea to do bulk vending part-time. He hooked up with Sal Aragona, a friend who was already in the industry, and the two installed their first gumball machine at a luncheonette in Valley Stream.

"Roger was a good guy, a very fair person who really had a head on his shoulders," said Aragona, who became Folz’s shop foreman in 1953. He retired in 1994 and now lives in Harbor Isle. "As far as business, he was very aggressive."

Folz recognized that most vending companies were regional — so he became the first bulk operator to sell his machines nationwide. After he and Aragona put machines in stores in New York, they headed to Florida, Texas and Massachusetts, and into Canada. Folz’s first big account was with Grand Union supermarkets in the early 1950s. By mid-decade, he had 4,000 machines in A&P stores. Folz Vending peaked in the early 1990s, when he scored accounts with K-Mart, Toys "R" Us, Wal-Mart and Safeway, which generated tens of millions of dollars in annual revenue.

Folz’s son-in-law, Elliot Leibner, who became one of his salesmen in 1984, said Folz was nothing if not a motivator. "I’ve watched Roger time and again go for a goal, and he gets results," said Leibner, who now owns Elyse Vending in Oceanside. "When people come up with excuses, he gets pissed. … He doesn’t like people who look around passively to solve problems, when most of the time you find that to achieve your goals, you have to do it the hard way."

Another element of Folz’s success was his lobbying efforts. He learned early in his career that it was crucial for a businessman to have good friends in the political world —and the friendships he has made have saved his company hundreds of thousands of dollars over the years. "His lobbying was definitely his passion," Leibner said.

Take, for example, a single year, 1965, in which Folz successfully lobbied for a 10-cent sales tax exemption and won a case against the Food & Drug Administration, after it charged that children were swallowing his toys and dying as a result. "We showed [the FDA] stats from Australia that proved that our toys were safe," Folz said, noting Congressman Lent’s help in that case.

Backed by the National Bulk Vendors Association, Folz lobbied against excise taxes, and won property tax exemptions in many locations where he operated, from New York to Illinois to Texas.

On the philanthropic front, beyond his work with Jerry Lewis in the mid-1980s, Folz has donated a great deal of money to hometown causes. Through the Oceanside Rotary Club, which he joined in 1967 and served as president twice, he donated $1,000 a year for 10 years to South Nassau Communities Hospital. For nearly two decades, the club used his warehouse to store pallets of groceries for its annual food drive.

Stu Gubenko, who spearheaded many of those drives, echoed other Rotarians when he described Folz as instrumental to the club’s longevity. "Without Roger, this Rotary could not exist," Gubenko said. "He is its backbone. He looks at life, and everything in it, as a business proposition, and he has a keen mind for that — he knows how people work and how to motivate them."

In 1998, Folz was the first major donor to the Barry and Florence Friedberg Jewish Community Center at Neil Court, writing a check for $250,000. Each year he gives $17,000 to the Oceanside High School’s Scholarship Fund. Most recently, he commissioned a Davison Avenue memorial to the Oceanside civilians killed in the World Trade Center towers on Sept. 11, 2001.

Folz’s factory workers, too, have benefited from his goodwill. "He always took care of his employees," said John Tatino, who has worked in the shipping department for 21 years. "He always thinks of us and helps us."

"Roger Folz was one of the best bosses I ever had," said Isabelino Morales, a shop steward and a 19-year employee. "He treated the people very decently."

While Tatino has a new job lined up at St. Francis Hospital, Morales has yet to find work, and like many other employees soon to be laid off, he is still searching. And Folz, too, is uncertain about his future. The beginning of his company’s end came, ironically, during its peak years, the early ’90s. A recession cost him some 5,000 accounts from stores forced to close, a blow he never recovered from. "Plus, more vending companies were popping up and copying what we were doing," he said.

Coinstar, the leader in coin counting, DVD and crank vending machines, bought American Coin, and with it, Folz, in 2004. When Coinstar moves to Colorado on Dec. 21, Folz and eight of his front-office personnel will stay in Oceanside, at least for the time being.

Meanwhile, Leibner is trying to convince his father-in-law to join him in his vending business across town. "One thing is for sure," Leibner said. "Roger can leave knowing that for anyone who came to the United States wanting to achieve the American dream, they would want to have achieved what he accomplished."


Please post a comment about this article. For private comments, email Joseph Kellard at Theainet1@optonline.net.

Copyright © 2007 Joseph Kellard

9 comments:

Anonymous said...

I was pleased to see this article outlining the achievements of Mr. Folz. Mr. Folz is an ispiration and a great sucess story that every future business owner should know!

I had been in the vending industry over 10 years and while I never worked for Folz Vending, we shared several locations.

Then our worlds meshed as the company I worked for (Gameplan, Inc.Owned by Tony Demarco)was also merged with ACMI, now owned by Coinstar.

I have since left Coinstar as the process of eliminating the Amusement Vending Division began and will be starting my own company soon as my No Compete clause with Coinstar has finaly epired.

There are only two people within the vending industry that I look too as role models, Mr. Folz and Mr. Demarco.

I wish Mr. Folz the best of luck!

Leo Frechette
Richmond, Virginia

Joseph Kellard said...

Leo,

Thank you for your reply to my article on Roger Folz. I've received quite a bit of positive feedback on that story from people who knew Roger, and each expressed similar sentiments about him.

Please let me know if I can use you post here as a letter to the editor in the newspaper where the Folz article originally appeared.

Thanks again,
Joseph Kellard
Theainet1@optonline.net

marmia said...

I worked for Roger for about a year when he started & built an amusement route...that was almost 30 years ago. He was an amazing motivator....It was a shame, most of his employees were stealing from him even though he was so generous. When I left the job because I started my own Amusement company(which I was destined to...My father was in the business for 55 years before he retired), he gave me an Asteroids game as a gift. I guess he was afraid that I would have taken some of his locations. What he didn't know was that I never would have...and I can proudly say that I was probably one of the only employees that never took a dime from him. I am now in the ATM business and I sure wish I had a Roger Folz for a Partner!



Mark Haber
New York
www.marmia.com

Joseph Kellard said...

Mark,

I appreciate that you took the time to comment on my article on Roger Folz. It was great fun reporting on him. And it's great to see from the few commentors here that Roger was so well respected.

Joseph Kellard

Anonymous said...

I am in the vending business myself in the north new jersey area. I have been doing it for about 5 years now. I originally had the idea from constantly seeing bulk vending machines in super markets with folz's name on it. OVer the years of working in this industry, and talking to many large vendors, I have found that Folz was one of the biggest bulk vending operators out there, but also companies like Kurtis Vending and Gabriel Vending, were just as big or even larger then Folz. However Folz Vending was an empire.

Anonymous said...

I was one of the drivers laid off in 2004 after American Coin took over Folz in their so-called "merger" deal. I had been a driver for Folz almost 5 years. Around that time, the loss of the Safeway/Vons account in all of the western states hit the company hard, too, and many drivers in the west were lost. I started my own business as a caricature artist about six months after getting laid off, and two years later it was full-time for me. I could kind of see this coming with the "changes," so I was actually thankful I was gone. I had already been a driver for a local Sugarloaf office during the mid-'90's, and there was a "merger" there, too. After I went to Folz, I heard the national Sugarloaf office completely closed the doors of the place I worked. Interesting how "mergers" always seem to spell the end for a previous company.

Anonymous said...

I worked for Roger Folz for many years, first as a part time route merchandiser in my home state. Roger is one of the best bosses I ever had. Folz's success was our success, Roger would buy all of his employees turkeys each Thanksgiving and Christmas gifts each December, all of us! He new how to run a company. When Folz Vending celebrated it's 50 year anniversary, Roger flew all of his employees to NY for a week, put us all up in a hotel, fed us, entertained us with Las Vegas style shows and took us to the city for Broadway shows, it was fabulous. When Roger sold Folz Vending he shared the profits with every employee in the company, a weeks pay for every year you worked for him. Roger is a true icon in American business. I wish you and all the great people at Folz the best and thanks for everything Roger, you're the greatest!

Mark Shepherd
Albuquerque, NM

Anonymous said...

Is Folz Vending just a "ghost" now, a memory of what once was? Is Roger still living? ----Carmine Del Vecchio

PC Baker said...

It is great to read this article celebrating the career of Roger Folz and the Folz Vending Company.
My step-father, Brian Malone, was a regional manager for Roger for many years. Our home was the most popular on the block every Halloween. Brian would save the display cards from his quarter vending machines and then hand them out to the trick-or-treater's instead of candy. I remember how they would line up for a chance to get the goodies that normally came in those plastic capsules. Folz Vending made a difference in this kid's life. Thank you Roger.