2011 Annual Franchise Review: The Dawn of Recovery
Minuteman remains the largest system, with 926 locations worldwide, 785 of which are in North America. Twenty shops left the system last year for a 2.16% decrease in numbers. You can find Minuteman franchises in six countries.
Of Franchise Services’ 598 locations, 462 are in North America. The system franchises Sir Speedy, PIP, and Signal Graphics on this continent and operates the Multi-Copy brand elsewhere in the world. Its franchisees can be found in 11 nations. The system lost 36 locations (6.02%) last year.
ICED is home to Kwik Kopy Printing, Kwik Kopy Business Centers, Franklin’s Printing, and Ink Well in North America. It offers Kall Kwik and Kwik Kopy abroad and is present in 10 countries. The system parted ways with 36 shops (7.96%) in 2010, leaving it with 452 total locations, 202 of which are in North America.
AlphaGraphics can be found in seven countries. In 2010 it had a total of 272 shops, 235 in North America. AlphaGraphics was the only system to actually increase its number of shops in 2010, growing 1.84% over the previous year. Considering the ongoing trend of ever decreasing franchise numbers, that’s quite an accomplishment.
Allegra Network, franchisor of Allegra Marketing • Print • Mail, American Speedy, and Insty-Prints, reported its total number of locations at 319, all in North America. That is a loss of 31 shops, or 9.72%.
CPrint International, which is a non-traditional franchise that serves established printing businesses that are looking for help in improving their sales and profitability, lost four shops (4.4%) for a total of 91 locations in 2010. Its franchisees are also in North America only.
All of the franchises now offer conversion programs that allow existing printing companies to become part of their systems. These programs are often promoted as a way for owners who wish to retire or sell their businesses to make the transition without having to go it alone.
These conversion programs are also advertised to potential entrepreneurs who are interested in owning their own businesses, but who don’t want to start from scratch. In light of the support offered by the systems, the unemployment rate for mature workers, and the general economic conditions, one might expect the time to be ripe for such programs to prosper.
A word of caution and common sense here: The advantages of conversion programs and the support services available to those who are part of a franchise system can be very appealing. This is especially true for potential owners who have no experience in the printing industry, but who want to start their own business. Anyone considering a franchise conversion, whether buyer or seller, still must complete all the due diligence that would be required for any such business transaction. Doing so does not indicate any mistrust of the franchise system or any of the parties involved. However, anyone who is party to such a major transaction must take responsibility and advocate for their own best interests.
Price of Admission
Whether converting an existing business or opening a completely new franchise location, there are costs involved. For the segment as a whole, both the minimum start-up capital and the total investment amounts rose in 2010.
Because it deals only with existing businesses, CPrint does not have the same capital requirements as the other franchises. Its members already have their equipment and premises in place before they join the group so those expenses do not come into play. CPrint requires $5,000 to get started and the maximum investment required is $12,579. That did not change in 2010. Because it works with significantly different criteria, CPrint is not figured into the averages in this category this year. To do so would skew the averages of the other systems, which must deal with equipment and property costs.
That said, the average minimum start-up capital required in 2010 was $123,000. Potential Allegra franchisees now must have $200,000 on hand. That is up 25% from $150,000 in 2009. Franchise Services still requires at least $150,000, and AlphaGraphics raised its ante by 48% to $150,000. It also requires prospects to have a net worth of at least $500,000.
