The initial investment required to become a franchisee held steady for Franchise Services ($150,000), Minuteman ($55,000), and LAZERQUICK ($25,000). ICED raised its entry price 2.03% to $74,000. CPrint’s start-up cost jumped 20% to $5,000. And Allegra bumped up its ante by 40% to $150,000. Bucking the trend, AlphaGraphics lowered its start-up investment by 8.97% to $78,000.
The total investment required to be part of Franchise Services or CPrint was unchanged at $288,000 and $12,579, respectively. Please note that CPrint’s investment costs are considerably lower than other franchises because it accepts only established printing companies, meaning that no major equipment purchases are required.
Allegra, AlphaGraphics, and ICED raised their total investment requirements. Allegra’s 12.22% increase brought the maximum investment amount to $485,000. AlphaGraphics raised it’s final cost by 2.21% to $424,000. And ICED’s total investment jumped 17.1% to $252,680. LAZERQUICK dropped its total investment by 9.09% to $275,000. Minuteman decreased its total cost by a whopping 44% to $125,000.
Even for a comparatively disappointing year, more than $1.66 billion is not exactly chump change. It is even more impressive when you take into consideration that the franchise segment makes up less than 10% of the quick/small commercial printing industry.
So how did the franchises bring in that amount of cash? The lion’s share came from color digital printing, which brought in 23.9% of sales. For those of you who are counting, that totals $398,282,469. The second largest block of work was multi-color offset, which at 17.8% of sales, brought in $296,644,805. Monochrome digital printing made up 12.6% of sales, or $209,973,185.
Ten percent of sales ($166,645,385) fell into the brokered/other category. Four-color offset and bindery/finishing services each brought in 8.3% of sales, or $138,315,669. Prepress work accounted for $103,320,138, or 6.2% of total sales.
Single-color offset work has been in a slow decline for a number of years. This year it fell to 4% of sales; off from 7.9% last year. Nonetheless, that is still worth $66,658,154. The numbers reported in this year’s survey indicate that the work that has fallen out of this category has been shifted to the color digital and multi-color offset categories. That is a positive sign, considering how much more profitable color work is.
Wide-format printing and mailing services have been on the rise in recent years. Both categories increased their percentage of sales in 2009. Mailing services made up 5% of sales, or $83,322,692, up from 4.1%. Wide-format printing accounted for $64,991,700, or 3.9% of overall sales, up from 3.3%.
The dismal economy of the past 18 months may be as good an argument as any for the value of franchise affiliation. Independent printing business owners may feel a tinge of envy for those who have the option of reaching out for help from a larger organization that has a vested interest in their success. The training and business services offered to franchisees probably saved some from failure and helped others minimize their losses during these tough times.
Comments from the franchise leaders indicate that they are positioning their systems to leverage new capabilities and customer demands to build a stronger future. It’s no wonder that many who are new to the industry (and a few who have been around for a while) are opting to take advantage of the various conversion programs.
As the economy begins to improve, the franchisees who take advantage of the tools that are available to them will likely find themselves well equipped to take on the next opportunities the industry offers.
Commentary from the Franchise Leaders
Carl Gerhardt, President & CEO
Most in our industry would probably like to forget 2009—the culmination of the most severe recession ever experienced. Although much of this was precipitated by the worldwide recession, it was exacerbated by the industry’s continuing structural shift. Most industry pundits predict we may not recover as we have in the past.
Although this may play out somewhat differently in our print and sign divisions, we see this as a golden opportunity to change the very nature of our business model, which will result in an historic opportunity. Thus, we are not depending on economic recovery and have implemented the following key initiatives: