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Peterson wonders whether most franchisees can produce the level of sales to justify the purchase of 29˝ and 40˝ presses. He contends there aren’t many franchise printers producing anything bigger than a two-up format.
“We’re able to generate extremely large quantities of printing very quickly, which is a big advantage,” he says. “We’ve got a Halm Jet, which allows us to run 25,000 two-color, two-sided envelopes an hour. We also have a six-up format Ryobi perfector that can run at 12,000 an hour. The speed at which we’re able to generate the work, and the quality that we’re putting out in a short amount of time, sets us apart.”
On the franchise side is Allegra Network of Northville, MI. Like many commercial printers, Allegra membership has branched out into other areas in order to avoid the scourge of commoditization, offering wide-format printing (banners and signs), promotional products and direct mail. Darryl Buchanan, corporate vice president of development, sees solid growth from verticals including healthcare, nonprofits, education and certain manufacturing segments.
Buchanan underscores Peterson’s assessment of strength in numbers and, particularly, information sharing. Allegra Network members benefit from ongoing sales, marketing and public relations training and support, along with technology growth initiatives. Its operating ratio studies, which have been conducted for 14 years, provide benchmarks and averages over the network.
The engine behind Allegra’s corporate sustainability is its Matchmaker program that connects franchisee buyers with sellers. These are sub-$5 million companies flying under the M&A radar that are looking to sell, often due to retirement. Allegra matches independent printers with a franchisee looking to purchase an existing business. The business is transitioned from independent to franchise, and the new franchisee benefits as a member of the network.
Allegra’s corporate office provides constant support for its membership, according to Buchanan. “Our home office technology and marketing group is primarily responsible for helping and advising franchise members on when and how to make the leap when it comes to significant investments, whether it’s adding a new piece of equipment or software, or hiring a new salesperson.”
How do all of these advantages translate when it comes time to go head-to-head with small and quick printers? Ginny’s Printing, based in Austin, TX, once thrived in the photocopying realm, but has since grown into a sheetfed offset and digital general commercial printer with $31 million in sales and 200 employees. It also offers mailing and fulfillment services. Michael Martin, CEO of Ginny’s Printing, says that Ginny’s and franchises still go after the same photocopy nut.
“The nationals have the advantage of geographic diversity; it’s generally small- to medium-size jobs that are impacted,” he says of franchise inroads. “On the surface, they have something to offer the commercial marketplace. But, in my experiences, they all fall down on service and quality.”
Different Direction
According to Martin, Ginny’s Printing is moving away from the core of products and services pursued by franchises. “We’re looking for much bigger tickets. . .the $250 black-and-white tape bind job doesn’t excite us much anymore,” he says. “As differentiators, we acquired a 40˝, eight-color and a 40˝ six-color, both brand new, along with two iGens and eight 6180s.”
The franchise players aren’t going away anytime soon, though. This month, Sir Speedy is celebrating its 40th anniversary, having grown from a single shop in Costa Mesa, CA, to a worldwide success with more than 1,000 centers in 18 countries. Its growth stems from independent conversions, as well as its MatchMaker Program, which helps would-be Sir Speedy franchisee owners find businesses to operate under the brand umbrella.
“We’re positioning ourselves as providers of the marketing support that goes with printing,” notes Rich Lowe, president of Mission Viejo, CA-based Sir Speedy. “That’s where the largest growth in the business is going to be. Growing a business is all about marketing, and we possess a lot of experience on that side of the business.”
Lowe notes that the average Sir Speedy franchisee has been in business for more than 15 years, and that experience helps it stand apart from its small/quick printer brethren. And, like Allegra, Sir Speedy shops benefit from information sharing with their peers, along with training and support from corporate.
The “book” on franchise players is that they lack the capital to make investments in equipment that will enable them to knock heads with independents. Lowe disputes that notion; he addresses membership on the subject of investing in hardware, efficiency-gaining software and seeking out value-added products away from the mainstream. Most importantly, he advocates the investment in employees and planning for the next strategic hire.
“Our most successful franchisees spend a lot of tactical time considering their next strategic hire, not the new CSR or copier operator,” Lowe contends. “Do I need an IT manager, and how will that change my business? Do I need a salesperson who will focus on a certain kind of business or customer to help me grow my business?”
As the factions continue to battle for market share, the winners will be those who enable their customers to grow and that can establish long-term relationships. But for all printers, not just those with designations, comes the challenge of adapting to a changing marketplace.
“Change gets faster and faster every year,” Lowe says. “We have to be able to adapt to the changes in technology, adapt to the people that we have to have in our organizations to support our clients and run that technology, and adapt to our customers’ needs. If we do those things and help our customers grow, then our businesses will grow, too.” PI
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