2012 Annual Franchise Review: Slow and Steady, Recovery Continues

Conversion programs provide an exit strategy for existing franchisees who are ready to retire or wish to leave their businesses for various other reasons. Often, independent printers who are struggling with the changing face of the industry and the rapidly shifting customer demands find the support offered by a franchise to be quite attractive. And while all the systems have certain similarities, their business practices and philosophies are different enough to make it worth the time to investigate all the options before making a decision.

In addition to more esoteric considerations, such as corporate culture, prospective franchisees will want to examine the more practical considerations. Specifically, the cost of getting into a system. Taking conversion programs off the table, let’s examine what it would cost to start a brand new franchised print shop.

As mentioned before, you can’t buy into a brand new CPrint franchise because such a thing doesn’t exist. For those who are interested in that particular limited term agreement, the initial investment is a flat $5,000. The maximum total investment is $12,579.

If you are considering a more traditional start-up, here is what it would cost to get into the various franchises in 2012:

• Allegra Network requires $200,000 in start-up capital and its total investment ranges from $172,348 to $455,784.

• AlphaGraphics requires $150,000 in start-up cash plus a net worth of at least $500,000. That figure excludes your real estate purchase. The total investment required is between $257,500 and $406,000.

• Franchise Services requires start-up cash of $150,000 and a total investment of $288,000.

• ICED requires $65,000 in start-up cash. It’s total investment figures range from $219,578 and $248,626.

• Minuteman Press requires start-up cash in the amount of $50,000. It’s total investment is placed at approximately $483,000.

The cost to open a new franchised print shop held fairly steady over the past year. These figures never seem to vary significantly from year to year, but there are occasional tweaks. The only changes in this Franchise Review are that Allegra dropped its maximum total investment number by a fairly significant 15.09 percent and AlphaGraphics adjusted its total investment number downward by 1.48 percent.

On the Right Path

The slight improvements experienced by the North American printing franchise concerns in 2011 should continue to trend upward this year as the economic recovery strengthens. Economists, both inside and outside our industry, predict slow and steady growth over the next few years. (See “Economic Recovery Requires New Mindset” by Andrew Paparozzi on page 28.)

Having survived the Great Recession, all printing companies, not just franchise affiliates, are working to add the new services and products that customers want. The transition may be easier for franchisees, though, because they do not have to go it alone. All of the franchise leaders have turned their attention to the addition of marketing services—a widely accepted, but nebulous term that encompasses all types of personalization, mobile services, website development, social media management, and a whole cornucopia of other services. As Paparozzi cautions, “It’s no longer ‘print or’; it’s ‘print and’.”

Comments from the Franchise Leaders

Allegra Network, Mike Marcantonio, president & CEO  

Across our industry, 2011 results were in line with expectations. Modest signs of economic growth signaled some positive change; enough to be hopeful, but far from contented. At Allegra Network, it has validated our decision and commitment to assemble all of the necessary resources, tools, and alliances to fully support our franchise members’ transition to delivering cross-media marketing services.

For us, it starts with education. By year-end, 112 of our marketing/print centers had completed a certification program that incorporates strategic marketing planning, media overview, best practices, and creative execution. Once completed, franchise members can come to Allegra Network’s headquarters in Plymouth, MI, for a deeper dive into strategic planning and one-to-one coaching on the sales process and how it differs from selling print.

Knowledge builds confidence, evidenced by several dozen franchise members who have sold integrated marketing communications programs that incorporate advertising, public relations, direct mail, Web marketing, and social media strategies. We share the “wins” throughout the network via a project archive with more than 100 industry-specific marketing plans and campaigns that can quickly be re-purposed and re-sold.