Friday, January 30, 2015

"Z" FRANK BEFORE YOU BUY!! - Zollie S. Frank - Part 1

After I wrote the blog entry on Fanny's Restaurant:

I started thinking of all the businesses that had disappeared or changed over my lifetime. Someone who was alive when I was born would not even recognize Evanston or Rogers Park today.  In addition to Fanny's they might be looking for Wieboldts department store or Woolworths "The Dime Store", or Kroch & Brentano's book store.  They might want to buy a suit at Lyttons or Baskins - all gone today.  If they lived on the North side of Chicago and wanted to but a car they might decide to head over to "Z" Frank Chevrolet on Western Avenue. Now that they have torn down the vacant building with the big "Z" Frank sign, nothing else remains of what was once the biggest Chevrolet dealer in the United States.  Let's take a look at what was behind the famous (to Chicagoans) slogan "Z" Frank Before You Buy!!

Zolmon Sidney Frank was born January 1, 1907 in Dayton, Ohio to Charles Frank (1864-1957) and Lena, nee Hummer (1865-1930). The name "Zolmon" is derived from "Solomon."  Charles Frank was from Russia-Poland, whereas Lena was Hungarian - born in Budapest. Charles Frank came to the US in 1872, his wife in 1886.  Zolmon joined his five older sisters:  Augusta (1893-1986), Ida (1894-1982), Esther (1897-1974), Blanche (1901-1974) and Mildred (1902-1987). Charles Frank was in the wholesale produce business.  Family lore is that the last name was originally "Frankel."

Young Zollie Frank worked in his father's produce business all of his young life, and that's where he learned all the ins and outs of buying and selling.  In 1935 after finishing high school and one year of college at Ohio State University, Zollie decided to go west - to California to continue his father's work in the wholesale produce business.  He did stay at Ohio State long enough to pledge to the Sigma Alpha Mu fraternity (The "Sammies").

En route from Ohio to California he stopped in Chicago to buy a car. While at the dealership arranging to purchase the car, Frank met a Chrysler factory representative who was taken with his initiative.  He told Frank that if he couldn't make his fortune in Chicago, he wouldn't make it anywhere.  That started Frank thinking.

When he later stopped back to pick up the car he had bought, he was sufficiently intrigued to set up a meeting with the man from Chrysler. The man from Chrysler told Frank about a Chrysler dealership for sale. Frank decided to buy it and make his fortune not in California but in Chicago.

Zollie Frank started out in 1936 with just $7,500.  He paid $2,500 for Keystone Auto Sales, the Chrysler-Plymouth dealership at 6116 N. Western Ave., and saved the other $5,000 for working capital.  At that time Keystone just sold Chryslers and Plymouths.  When Frank bought the dealership it was the smallest Chrysler Plymouth dealership in Chicago.  (There is now a strip shopping center on that site.)

Years later he related, "I bought the place on a Saturday and moved in on a Sunday.  The first day open I sold three cars and took two in trade, a Whippet and a Ford.  I didn't know anything about cars except what they cost me and the fact I had $185 profit to work with.  The first customer had a Whippet for trade.  It wasn't worth anything but I gave him $60 for it, and my profit was $125.  He made $125. on the second sale, but the full $185 on the last sale of the day.  

"A couple came in as I was closing the door at 5 p.m.   I quoted them full list price on the Plymouth and they took it.  But they didn't know how to drive, so I offered to teach them.  It took 8 lessons.

Frank went on, "I had met the man who would become my brother-in-law when we were dating sisters.  Armund Schoen joined me in business and helped me found Four Wheels.  As it happened, we also married the sisters we were dating; the one sister is now my wife, Elaine, and the other, Armund's wife, Rita.

Zollie Frank is mostly remembered today for being a car dealer, but the truth is that he and Armund Schoen came up with an idea that revolutionized the auto leasing business.

"When Armund and I founded Four Wheels in 1939, a new Chevrolet cost about $495 - without a heater, radio, or spare tire.  I figured we could lease that car for about $45 a month and make money on it.

Armund Schoen - Zollie Frank - 1939

"In those days, automotive fleets existed, but they usually were owned by the individual corporations. Large dealerships handled fleet sales. "Z" Frank was considered a small, neighborhood store, so we got very little of this kind of business, attractive though it was.  We lacked the capital and contacts to compete effectively with large dealerships for fleet sales.

"From the standpoint of operating a successful business, however, I saw that many advantages could come with diversification.  Deriving income from corporate as well as retail business would provide more stability, since retail sales tend to be volatile and are easily affected by economic conditions in general.  We were looking around for a way to expand our business while also providing greater corporate stability.

"Corporate fleet leasing proved to be the answer.

"A big Chicago pharmaceutical company - Petrolager - posed a particular problem: The company had 75 salesmen in those days and paid them for mileage and gasoline for using their own cars on the road.  It also helped them buy their cars, lending them the required one-third down payment.

"But, the salesmen often left the company before paying off the loan, and Petrolager was losing its down payment investment.  In the 1930s, owning a car made a person a highly marketable commodity in the sales business.  Once a salesman had his own car, he was ripe for pirating by other companies.

"I happened to meet Petrolager's president and sales vice president when they stopped at my dealership to purchase two Chrysler Imperials for their own use.  When I heard about their 75 salesmen and the problems Petrolager was having with their car arrangements, I knew there was an opportunity for me.  I proposed a $45 per month lease arrangement, with the car replaced yearly and including tires, maintenance, oil changes, and collision insurance, with no deductible.

"We started out leasing Petrolager five cars with the understanding that if the system worked well for both of us, the fleet would be expanded in one year.  The Petrolager venture turned out to be profitable for all involved, so the next year they leased 75 cars.

"Although company-owned fleets did exist in the "old days," what Armund and I did basically was to take several separate ideas and package them in a completely new way.  By putting each car on a long-term (12 months back then) lease to businesses, we assured ourselves of a steady cash flow.

"We named the company Four Wheels and designed the logo accordingly to pique companies' interest in this new idea.  That helped when Armund and I went out to sell a concept with which few were familiar.  Closed-end, full-maintenance leasing at that time was the most attractive proposal with which to approach corporate executives. It was a simple, easy-to-understand plan whereby Four Wheels assumed responsibility for virtually all costs except fuel and liability insurance.

"Clients no longer had to worry about buying, selling, or maintaining cars, or what their costs might be.  All that was required of them was to put gas in the cars and pay us $45 a month.  Simplicity was necessary because this was such a new concept and little literature existed to explain what we were doing.  We had to educate the public about automotive fleet leasing.

"In cases where Four Wheels was competing against company-owned fleets, our job was to graphically demonstrate how leasing would give them more for their money than owning, and fewer headaches.  In effect, we acted as a security blanket for client companies.

"Of our original 21 clients, we still do business with 17.

"In 1939, I borrowed my first million dollars to finance Four Wheels. National Bond and Investment, a well-known commercial finance organization of the day, approved the loan - not on my firm's bank statement, but on National's belief that we would make a success of the venture.

In the comments related above, Zollie Frank mentions his wife Elaine. Zollie Frank married Elaine R. Spiesberger (1917-1992) on December 20, 1937 in Chicago.  He was thirty years old; his bride was twenty.

The 1940 US Census finds the Frank family living at 1309 W. Estes in Chicago.

1309 W. Estes Avenue, Chicago

They were paying $60 per month for their apartment.  Zollie listed his occupation as "Propiertor of a Retail Auto Sales Company."

Next week:  Z Frank becomes a Chevrolet dealer and ends up selling more Chevys than any other dealer in the world!

Remember:  "Z" Frank Before You Buy!!

Frank Motors Chrysler-Plymouth and Four Wheels Leasing

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