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This Biz Delivers

[ 0 ] Jun. 1, 2007 | SBO Editor

The numbers and magnitude of scale are staggering. Valpak, the brand behind the ubiquitous blue envelope that arrives in consumers’ mailboxes each month, reaches some 45 million households throughout the United States, Canada and Puerto Rico, annually distributing approximately 20 billion offers inserted in more than 500 million envelopes.

In 2007, the Valpak Manufacturing Center will open in St. Petersburg, Fla., featuring about 10 acres of manufacturing and office space under one roof and a new manufacturing process that will produce twice its present capacity in less than half the time. Cox Target Media, which owns and operates Valpak, has more than 1,500 employees.

But Valpak president Joe Bourdow, a former Valpak franchisee himself for many years in Richmond, Va., insists on spending time with every prospective franchisee who visits the company’s corporate headquarters in Largo, Fla. Likewise, whether attending a large convention or small gathering, Bourdow makes an effort to talk with every Valpak franchisee. He is only a phone call away from the 200 Valpak franchisees throughout the United States, Canada and Puerto Rico.

“Even though Valpak is a big company, we try to conduct business with the feel of a small company and cut through any bureaucracy,” the 55-year-old Bourdow said. “We want new franchisees to feel good about Valpak and have that attitude carry through to our existing franchisees.”

Valpak pioneered cooperative direct mail almost 40 years ago in 1968 when entrepreneur Terry Loebel mailed a cooperative envelope with 14 coupons to 20,000 households in Clearwater, Fla. Today, Valpak is the most recognized direct mail brand in the United States. Nearly 9 in 10 adults receiving Valpak are aware of it.
Valpak is an icon of the direct mail industry. With its 40th anniversary approaching and business increasing significantly over the past 10 years, Valpak is offering entrepreneurs the opportunity to utilize the resources and potential of Valpak – one of the strongest consumer brands in the country – by becoming Valpak Franchisees in small- to mid-size markets throughout the country.

The Valpak Franchise Network currently has franchise opportunities available in more than 70 non-major metropolitan areas in 19 states. A minimum of 9 to 10 Valpak Franchise opportunities are expected to be awardedin 2007.

“People are taken aback by the sheer size and magnitude of Valpak until they realize the brand has been around for almost 40 years,” said Kevin Drudge, Manager of New Franchise Development. “People are amazed to find out that Valpak pioneered our industry. There are other companies trying to do the same thing, but they can’t compare as far as size, production capability and branding power.”

Markets such as Peoria, Ill.; Syracuse, N.Y.; Panama City, Fla.; Charleston-Huntington, W. Va.; Saginaw-Bay City, Mich.; Burlington, Vt.; Brownsville, Texas; Madison, Wis.; Little Rock, Ark., Eugene, Ore., Fargo, N.D. and Tallahassee, Fla., offer prospective franchisees with proven management, sales and/or advertising backgrounds, the opportunity to establish and build a successful business for a modest initial investment under the umbrella of one of America’s most-well known brands.

Valpak franchisees pay a franchise fee and a territory fee for every 10,000 Prime Households, defined as households within an exclusive, defined territory that are considered to be a desirable recipient of Valpak envelopes based on reported household income and other criteria. Valpak generally requires a franchisee’s territory to include a minimum of 50,000 Prime Households. Valpak franchisees do not pay any royalties, but pay minimal dues to their own Dealers Association.

About 25 of the available markets have more than 100,000 Prime Households, Drudge said. Valpak is already delivered to more than 110 U.S. Nielsen markets and Canada.

The economies of scale available in non-major metropolitan areas offer many advantages, Drudge said. A Valpak franchise can be home-based with little overhead; brand awareness is generated quickly; and advertisers embrace the full-range of professional marketing services that include client-customized research, geographical targeting and mapping, creative services and graphics, and production and printing services.

Valpak uses proprietary Neighborhood Trades Areas (NTAs) for audience mailing, allowing advertisers to target qualified customers geo-demographically for the best possible results. An NTA is a grouping of approximately 10,000 unique addresses based on mid-to-upper income demographics, purchase behaviors, proximity to retail shopping locations, traffic patterns and postal carrier routes. Every 10,000 homes receive a different version of a Valpak envelope.

Because Valpak has a thorough understanding of, and presence in, local, regional and national markets, it has a strong success rate in targeting “qualified” members of an audience with comprehensive programs that deliver measurable results for advertisers. Proven results for advertisers translate into increased business for Valpakfranchisees.

“Valpak takes its job of getting advertisers seen and redeemed seriously. When someone buys a franchise, we have done much of the groundwork for them with an eye on duplicating the same success we’ve accomplished for other franchisees throughout the years,” said Melissa Fisher, Senior Vice President of Marketing & Communications.

“From giving advice on where to mail to imbedding best practices of promotional marketing into our business support systems, we have developed a unique understanding of local businesses,” Fisher continued. “We have a team of experts that continually work with you and strive to improve our products to drive the best return on investment for local advertisers. Our brand and our business processes help pave the way for our franchisees’ success.”

Valpak franchisees are expected to be “on the street and not in the office,” working with business owners who rely on Valpak to get their message to consumers. Sales representatives can be added as the business grows, but most successful Valpak Franchisees are “hands-on” owners, committed to customer service and maintaining the standards of the franchise network. The Valpak franchise model is particularly well suited for couples in non-metropolitan markets.

“What makes our franchising opportunity unlike many others is that the market really doesn’t make any difference; it’s really a question of whether an individual is the right person for the market,” Bourdow said. “If you are a successful salesperson who is interested in being a part of your community and helping other businesses grow, this is a wonderful opportunity in a small- to mid-size market. You’ll probably work out of your home, be your own boss and have the tremendous resources of Valpak behind you.”

Successful Valpak franchisees can scale their businesses accordingly, acquiring surrounding or outlying territories, if available. For example, 2006 Franchisee of the Year, Bobby and Gloria Adkins, launched a successful Valpak franchise in Kansas City and expanded to St. Louis and Austin, Texas, hiring a manager and sales team in each market.

“The potential for expansion gives a prospective franchisee the opportunity to look beyond what they are purchasing initially, giving them the additional benefit of being able to build their business beyond the initial stages,” Drudge said.

Valpak.com, which has grown into the largest local coupon site on the Internet, offers additional growth opportunities for advertisers and Valpak Franchisees. In 2005, Valpak.com hosted over 8.5 million individual visitors. In August 2006, Valpak.com formed a partnership with Google to supply the well-known search engine with 20,000 printable coupons that are updated nightly and accessible through Google Maps which means additional exposure for Valpak.com advertisers.

“We are spending a good deal of time talking to other companies about how we will expand the online portion of our business, which is an important component of the franchise model,” Bourdow said. “Valpak is clearly going to take a strong role in online local advertising and it will extend beyond just offering coupons online.”

Valpak’s breadth of resources strikes a chord with franchisees from the onset. Its training and support programs are among the most comprehensive in the franchising industry. Its field support staff alone numbers 40 people. Team One is a world-class support program launched in 2003 that assists Valpak franchisees in various facets during their first year of operation.

“It’s like having a business partner during your first year,” Drudge said. “Team One members are there to guide franchisees and help them get started in an easy fashion. It’s difficult enough starting a business. Having someone who can walk you through those first few months and during the entire first year is a true benefit.”

When prospective franchisees visit the corporate headquarters of Valpak and Cox Target Media for the first time, many are surprised by the close-knit atmosphere they find in a company with more than 1,000 employees. The notion of the “Valpak family” extends through the franchise network.

“Our franchisees are the foundation of our business,” Drudge said. “That philosophy comes from the top down, starting with our president, Joe Bourdow, who started at the grass roots with Valpak almost 30 years ago. Everything we do at the corporate level is done with our franchise network in mind. It is a great situation for the right individual.”

Category: Magazine, Start Your Own Business, Start Your Own Business Summer 2007