Franchise Leaders Commentary

Every year QP offers the presidents and CEOs of the franchises an opportunity to speak directly to our audience in their own words. They share a view of our industry segment that few others can entertain. Their unique perspectives bring out details concerning their individual systems and the industry as a whole to which we would not otherwise have access. We would like to publicly thank each of these busy executives for taking the time and effort to share their views so openly.

 

Allegra Network,

Mike Marcantonio, CEO

As 2012 came to a close, we continued to observe conditions that were not that dissimilar to 2011. Industry sales remain basically flat, and the outlook for 2013 is essentially more of the same. We are getting very little help from a marginally improving economy, and everyone can see that the landscape of our industry will not return to what it was pre-recession. The better news is that we continue to see great opportunity for those changing their business model to capitalize on the new opportunities in broader-based services.

During 2012, we conducted 25 sales training sessions for more than 150 of our franchise members. This effort helped accelerate the movement to a more sales/marketing driven business model. Although production is still very important, the successful businesses in the future must be solution providers. We continue to invest heavily in sales training resources and our Marketing Resource Center. The MRC completed over 600 projects in 2012, helping our franchise members with its centralized staff of veteran strategic planners, copywriters, graphic designers, website developers, and related subject matter experts. We now have 140 centers that are Marketing Central Certified with the number growing each week. The investments we have made to support the new business model are paying dividends for our franchise members, not necessarily in large volume traditional print sales, but in higher margin and more profitable consultative sales that have increased their bottom line.

We continue to accelerate the move to more digital production. Although offset is still very important, the writing is on the wall that our centers must be state-of-the-art in the growing digital market. This past year saw substantial investment in production color devices including Indigo, iGen, and toner-based production color devices. Additionally, we saw major investments in the fast growing wide-format printing market.

Our business units are now organized into two divisions: Bob Milroy was appointed president of the Marketing/Print Division. Bob was previously CEO of Alexander Marketing, a top 50 B2B agency. He joined Allegra Network over three years ago as chief marketing officer and has led the movement of our 290-plus marketing/print centers into the marketing services/cross media space. Ray Palmer was appointed president of the Sign Division. With our Signs Now and Signs By Tomorrow brands, we now have over 340 sign franchises under Ray’s leadership. Ray is also leading the introduction of a new sign and graphic services model that was recently announced. This new brand, Image360, recognizes the changing market in this industry that will position our franchise members to capture an even greater share of this growing market. In addition to leading the divisions, Bob and Ray are investors in the company.

We recently announced the reorganization of our corporate structure into a common parent company called Alliance Franchise Brands, uniting the ownership group under this new identity. Alliance Franchise brands represent nearly 650 centers with system-wide sales approaching $380 million. We have assembled a strong management and support team that will lead our franchise members of both divisions into the future. We look at solid growth opportunities in an industry that is mature in some segments, but growing in others. We choose to focus on those segments that are growing and will thrive into the next decade.

AlphaGraphics,

Art Coley, President

I appreciate you continuing to gather information on each franchise brand and measuring the performance. 2012 will be a year we all look back on as a key turning point in the AlphaGraphics Network. Under new ownership and management, we have shifted the focus as a franchisor to three key areas that we are confident will help us continue to lead the pack.

First, a continued focus on the basics. We have to do more than provide print solutions. But what we cannot forget is that manufacturing and production are still at the heart of what we do. The market, more than ever, wants the right solution, at the right time, that will deliver the right result. To do that, any business in this industry has to be at the top of their game.

Whether print, large-format, mailing services, marketing campaigns, website, branding, client profiling, list acquisition, or any of the many products and services we provide to businesses across the US and in seven other countries, we have to be able to deliver. And that means having a commitment to excellence in production, workflow, outsourcing…and whatever it takes to deliver what our customers need to increase their reach. In sports, we know that a champion team never forgets to work on and train in the basics. We do the same at AG.

Second, help our franchisee partners reach a new level of success. As a franchisor, job #1 is to provide the right training, systems, and support to help franchisee partners become better business owners. That means having the right conversations, implementing the right best practices, reviewing the right metrics and financial data so we can build action plans that will drive healthy revenue growth that increases their bottom line and builds more value in each of our business centers. A franchisor that is not delivering on that promise needs to stop and take a hard look at what they are doing.

At AlphaGraphics, we ask ourselves daily, “How do we help our franchisee partners improve results at the business center level?” That’s where it starts, and we believe that any independent not getting the results they want and need or corporate refugee that wants to own a higher volume B2B franchise should give us a call and explore what we have to offer. There is a reason why AlphaGraphics has more business centers in the Top 100 than all the other brands combined. It’s about building successful business centers, one location and one franchisee partner at a time.

Finally, an intense focus on the end user—the customer. We all know how easy it is to get “busy” each day with the changes we need to make, that next piece of equipment, software, production, financing needs, workflow, staff issues, etc. And too often in all of that “stuff” we forget to ask three simple questions: “Who is the customer we serve?”, “What problems are we solving?”, and “Why?”

At AlphaGraphics, we understand that the customer is at the center of everything we do. We know that it’s not the franchisor or franchisee who determines our success…it’s the customer! And if we want more prosperity, better sales, improved profits, and an increase in business center values, the only way to get there is by finding new customers that want to do business with AlphaGraphics.

2013 is off to a strong start. We anticipate this to be our best year yet…and we’re just getting warmed up!

 

CPrint International,

Todd Nuckols, President

2012 marked another year of transition for our industry and the CPrint program. We continued to investigate trends that were proving profitable and, in turn, helped our affiliates to ride these trends to the finish line. But our work is far from done. Today we work harder than ever to give our affiliates a head start in their local markets so that they are the true leaders and can offer far more than their competitors.

This past year we awarded two of our shops with the top award in our program called the Superior Performance in Print Shop Management Award. To receive this, a print shop owner must achieve the following in the same business year: a 2:1 or higher current ratio, 20 percent or more profitability and 15 percent or greater sales growth over the last three years. We feel this puts a print shop in the top five percent of all shops in North America, and we are proud to say that two CPrinters achieved these marks while many print shops were struggling to keep the doors open.

We kick started more training that will become evident in 2013 with weekly webinars on topics of importance. Today CPrinters can receive 50+ hours of timely education for themselves and their workers. All of this is without additional cost or expense to them. And education is the key to timely business adjustments that are needed now more than ever.

The future looks bright for CPrint affiliates because they have tools at their disposal that many of their competition don’t even know exist. And instead of staying in the shop, pulling the covers over their heads, and waiting for the storm to pass, CPrint affiliates are making money, having fun, and spending a lot more time with their families.

 

Franchise Services

Inc. (FSI),

Richard Lowe, President

Business remains ultra-competitive and price sensitive for our traditional products and services. Our transition to marketing services is in full swing, but it is not easy. Even with all the political posturing and uncertain economic times in 2102, our franchisees have persevered and grown their businesses. Our network sales grew again in 2012, because our franchisees are focused on helping their customers grow their businesses.

We believe delivering on marketing services is about understanding what your customer considers “value”. We speak in the language of the customer; not a print manufacturer. We understand their marketing challenges, understand their pain, and then help them improve by bringing them a new approach to solving their marketing problems. We can and are helping small and medium sized businesses communicate their message more effectively and efficiently with integrated marketing campaigns today.

We will sustain our growth by executing consistent integrated marketing campaigns to our customers and prospects; that puts us in their consideration set when they are looking for help with their printing, signage, and marketing needs.

The Franchise Services Inc. team will support our franchisees by helping them to manage cash flow, hands on assistance in sales and integrated marketing, and training them on all the new products and services they need to deliver to help be more relevant to their customer.

Leadership is about adapting to change and driving improvement. Leaders are responsible for setting business objectives and initiating actions that will exceed goals. We have a network of leaders that have taken this to heart and are up to the challenge of adapting and growing their businesses. We are proud to be their partners.

 

ICED Print Brands,

Jay Groot, President,

At ICED, we continue to focus on the positive aspects of the graphics business and the overall economic climate. Six of the seven franchises held by our parent company are in the print industry, so we are following our multi-year plan to grow our franchises into marketing service providers (MSP).

Through our annual conference and our bi-annual focus groups, our center owners are redefining themselves as something more than “just” printers. As in any society, some are eagerly adapting to this role while others are a bit more reluctant. Fear of change. Fear of new equipment and software. Fear of learning new ways of doing things. All of these are factors that we strive to help our owners overcome in order to succeed and grow.

Our vendors are a critical component in helping our owners embrace the MSP concept. They, too, have realized the importance of reaching out to their client base with innovative ideas for marketing. Certainly, they want these customers to use their equipment and products, but the marketing aspect comes first. We are grateful for their help, and utilize them for re-posting blogs, participating in webinars and seminars, and for conducting workshops at our owner events.

While our Kwik Kopy Business Centers continue to see steady growth, Kwik Kopy Printing and Kwik Kopy Business Solutions, Franklin’s, The Ink Well, and AWT are seeing an uptick as well. Brokered, or outsourced, work allows our owners to offer more and varied products to their customers without the added expense of equipment and staff. Digital color, wide-format, and mailing services continue to be growth markets for our owners, with a mix of in-house production and outsourcing.

Web solutions are gaining traction as our owners learn the many aspects of being marketing service providers. Some of our more progressive owners are delving into webpage design, learning how to use it themselves so they can offer it as part of a complete marketing package. More of our owners are participating in Facebook, LinkedIn, and other social media as they learn the value of reaching their customers where they are, not where we want them to be.

We are helping our owners upgrade their websites, add storefronts for their customers, and encourage more online ordering. Our annual marketing program provides elements that include electronic newsletters along with print sales collateral. We urge our owners to develop good landing pages so they can incorporate QR codes in their promotions, and in their customers’ campaigns.

In over 45 years of franchising, we have never waivered from the belief that education is the route to success for our owners. We utilize as many methods as exist to accomplish this goal. We are launching a new initiative in 2013 for our owners and their staffs that will provide a route to measurable achievement in their designated roles.

It is discouraging to hear pundits declare that print is dead. This is a vibrant industry, and while it is not the print world that Bud Hadfield and Bill Levine began back in the 1960s, it is definitely alive. A June 28, 2012 article in Forbes magazine probably said it best in support of print, citing “tangibility…credibility…branding…target marketing…more engaging…(and) QR codes” as the elements that keep printing strong.

The article wrapped up with this quote: “Finding the right balance between various media will ensure a steady revenue flow, an increase in sales and new customers.” I think that captures our industry very well, and I am excited to be helping the owners in our ICED family of franchises be part of it.

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