Making More With Less

Last week I had the pleasure of speaking to a group of franchise leaders at the Ricoh Franchise Print Council in San Francisco. It was a little strange, since I had known some of them for many years and had learned a great deal of what I know about the quick and small commercial printing industry from them. One of the topics I addressed was the changing face of both the franchise segment and the top companies as monitored in QP’s annual Top 100 survey over the past 20 years. For the franchise segment, the total number of franchise systems declined from 23 in 1991 to 14 in 2001 to six in 2011. Of course, not all of the 1991 systems have disappeared. Many have been acquired by the remaining systems and operate under their umbrellas. However, during the same period, the number of shops in these systems has fallen from 5,454 in 1991 to 3,795 in 2001 to 2,656 in 2011. That said, the average sales per shop have risen from $370,000 to $503,000 to $617,000. In other words, there are fewer systems with fewer shops that make more money. In the Top 100 surveys, we found that these 100 companies had 664 shops in 1991. That number declined to 314 in 2001 and stands at 188 this year. Meanwhile, the number of employees has steadily fallen from 6,531 to 5,600 to 3,702. However, average sales per employee have grown from $69,000 to $107,000 to $138,000. So, fewer employees are accounting for more sales. I don’t think the decline in the number of franchise systems or the number of shops should be a surprise to anyone. However, it appears that the remaining shops are operating more efficiently and making more money, and that’s good news.