RACINE, Wis. -- What's in a name? Plenty, if you're a small, independent retailer operating under the Ben Franklin banner.
Supermarkets participating in the Ben Franklin licensing program, many of them in sparsely populated areas in the Midwest, are benefiting not only from the franchise's high name recognition in that region, but also from the program's strong seasonal and general-merchandise promotions.
"The name value is very important. We're in a rural community, and it's a name that people recognize and remember," said Paul Melchek, president of Melchek's Foodland & Ben Franklin, Reese, Mich.
Melchek's is a 30,000-square-foot combination store not far from Saginaw, Mich., the closest urban center. A little more than 7,000 square feet of the store is given over to the Ben Franklin section, which includes greeting cards, toys, craft items, stick goods and other general merchandise.
"It eliminates my customers' need to go to the city for some of these products."
Promotions Unlimited Corp. here, which specializes in developing seasonal and general-merchandise promotions, bought the rights to the Ben Franklin trademark in a bankruptcy auction in April 1997. At that time, Ben Franklin was a 120-year-old franchise of more than 600 hardware, drug, variety, craft and grocery stores that had run aground. Promotions Unlimited signed agreements with most of those retailers to keep them in the program and has since expanded the number of participants to 800. The large majority are single-store operators like Melchek's.
Promotions Unlimited saw tremendous potential in the Ben Franklin name and in the growing number of small retailers looking for some way to stay competitive with big -- and growing -- chains, said Larry Greenfield, general manager.
"We can get them to sources of profitable merchandise they may not be able to access otherwise," he said. "Or, for example, they might be introducing a crafts department because no one else in the area is doing it and they see a niche. It's also a way for them to get into the seasonal promotions business."
Melchek, a licensee since 1983, said he has not enlarged his general-merchandise assortment since Promotions Unlimited took over the program, but he added, "It's allowed me to stay strong. I certainly haven't missed a beat, and we have all kinds of competition, from Wal-Mart to Michael's."
Melchek said a major benefit of Promotions Unlimited's involvement has been its customer rebate program. Shoppers can send in proof of purchase on certain items directly to Promotions Unlimited for money back, with no up-front cost to the retailer.
"That's a significant investment they make," he said. "It allows you, at zero cost, to be out there at a price nobody can beat. It's certainly innovative. It's easy for the customer and easy for the retailer."
Promotions Unlimited has also "used their influence with wholesalers and suppliers to negotiate better prices for us," he said.
Participating stores must be at least 5,000 square feet and devote a minimum of 2,500 square feet to Ben Franklin merchandise, according to company literature. Licensees pay an annual fee of $2,340, which is waived if the retailer makes more than $30,000 in purchases from Promotions Unlimited that year. Retailers who buy more than $60,000 in merchandise in a year get a 1% rebate.
In addition to merchandise, Promotions Unlimited provides a number of support services to licensees, including customized circulars, coupon books and planogramming.
