2017 Annual Franchise Review: Crafting an Aggressive Game Plan to Ensure Growth & Profitability

A successful basketball team – any sports team, for that matter – builds on its accomplishments in the previous season. Whether it’s a college team taking part in March Madness or a pro team competing for the NBA Championship, a good team will craft a game plan that takes advantage of last year’s “positives.”

Similarly, print franchises are looking to build on 2016 to ensure the game plans they’ve drawn up are effective – and their “teams” emerge victorious. Most of the companies put strategies and programs in place last year that will serve them well as 2017 progresses, it appears – whether that involves marketing and training initiatives, or pursuing new and profitable markets like wide-format printing, signage, and packaging. 

We surveyed five franchisors in assembling this year’s report:

• Alliance Franchise Brands (whose Marketing & Print Division comprises Allegra, American Speedy Printing, Insty Prints, KKP Canada, Speedy Printing, and Zippy Print);
• AlphaGraphics;
• Franchise Services Inc. (comprising PIP, Sir Speedy, Multicopy, Signal Graphics, and EastNet Print);
• ICED Inc. (comprising Kwik Kopy Printing, Kwik Kopy Business Centers, The Ink Well, Franklin’s Printing, and American Wholesale Thermography); and
• Minuteman Press International.

Reflecting on the past year

How did print franchises fare in 2016?  

“2016 was a growth year on many fronts, building on the solid foundation laid in 2015,” says Kevin Cushing, president of Alliance Franchise Brands’ Marketing & Print Division. “The acquisition of KKP Canada and its network in November was just one of our highlights – KKP Canada comprises 50 Canadian locations across nine provinces, enlarging our footprint in Canada.”

“We continue to invest in significant technologies to sustain growth and streamline operations at our Business Centers,” says AlphaGraphics president Aaron Grohs. “We successfully implemented our enhanced agOnline print and marketing management solution, offering our customers the latest web-to-print and multi-channel marketing technologies to help our customers get noticed and get business. Our network has continued to grow through the addition of new AlphaGraphics Business Centers. And we strengthened our leadership team by hiring Kevin Strand, VP of Operations, and Pam Gillies, VP of Marketing – two innovative and experienced print and marketing industry professionals – to enhance our operations and marketing support. Overall, 2016 was a year when our talent, technology and internal operations support contributed to the growth and success of our franchisees. AlphaGraphics is well positioned as a leader in the print and marketing communications industry.”

“Business continued to improve in 2016,” says Richard Lowe, president and COO of Franchise Services Inc. “Our comparable centers sales grew at slightly more than 2%, and our sales people comparable growth was at 10%. We continue to grow through garnering market share and through the addition of new products and services. Our marketing services strategy is in place, well understood by our franchisees, and valuable to our customers. We have added focus on more sales people in our network and growing their sales. We’ve focused on growing our sign business.”

Election-year uncertainties led to relatively flat sales in 2016, says Jay M. Groot, president, Print Brands, ICED, Inc., but despite those uncertainties, “We saw continued growth in digital color and wide format,” he reports. “2016 was not a stellar year for the print community as evidenced by any number of creditable industry sources. ICED’s franchise family experienced numbers akin to the national average. However, there were clear signs of recovery across our roster – owners posted gains of 1% to 10%, with the average gain for the system of 4.2%. We anticipate seeing similar growth in 2017.”

“Sales continued to increase in 2016,” says Bob Titus, president and CEO of Minuteman Press International, “due to the wide variety of products and services our shops offer as well as our extensive marketing and Internet marketing programs. Another reason for our sales increase: the addition of wide-format printing by more owners and increased capabilities in that area.”

Growing business going forward

Franchises are taking a variety of steps to ensure that 2017 is a growth year, they indicate.

ICED notes that, “We’ve further enhanced our marketing program, providing owners with multi-media materials, and freeing their graphic department to handle customer needs. We’re encouraged by the reports from in the early months of 2017, and believe that our owners will see better numbers this year. We’ll step up marketing and advertising, both direct mail and electronic,” says Groot.

Franchise Services, meanwhile, indicates, “Our strategy and tactics will be similar – focus on growing our sign business and growing our outside sales force,” says Lowe.

“Minuteman Press will continue to research and add products and services that make the most sense for our owners,” says Titus. “Our 28 regional support teams will also continue to work with our owners to provide crucial support and help in managing their businesses.”

“The work we did to strengthen the business in 2016 helped prepare us for the future,” says Grohs with AlphaGraphics. “Our priority in 2017 is the ongoing implementation of these initiatives as we continue to support our franchisees as they focus on sales and operations excellence. agOnline provides significant opportunities for small, medium, and large business to access the state-of-the-art services we provide, and is a major differentiator for us. Our new website is based on the Adobe Experience Management platform that will feature the capabilities of our Centers, the benefits we provide to our customers, and create a modern and enhanced user experience. In addition, our training offerings have been aligned with our key business processes and initiatives. For programs like our New Owners Orientation, we continue to develop enhanced online, classroom and in-Center training to prepare new and existing franchisees and their employees. The focus in 2017 is to reach our entire network with comprehensive training programs as they implement new solutions and service offerings for customers.”

“Steady progress was made in 2016 for Alliance Franchise Brands’ dual-branded Center concept of Allegra/Image360, and plans for 2017 are even more aggressive,” says Cushing. “We have the only dual-branded franchise concept in the graphic-communications space, offering franchise members the full support of staff and services in both the marketing and print space with Allegra Marketing, Print, Mail, and in the sign, graphics, and corporate art industry with Image360.”

Providing more client solutions

Which markets seem to offer the most opportunity for growth in 2017? Several of the companies note wide-format digital printing and signage:

• ICED: Wide-format, marketing consultation, and brokered services;
• Minuteman Press: Wide-format printing and color digital printing; 
• Franchise Services: Signs, digital packaging, labels, and ad specialties.

“Many of our Allegra and KKP franchise members have developed significant businesses in the wide-format area,” says Alliance’s Cushing. “By adding the Image360 brand to their location, they’re immediately boosting their capabilities in this arena and offering a more complete set of solutions to their clients. Our Sign & Graphics Division team does an outstanding job helping our franchise members pursue broader sales opportunities like building signage, vehicle wraps, event displays, and more. Marketing services hold great promise for the network in 2017, as does the franchise’s continued expansion in direct mail and signage.”

“Image360 is a powerful offering with a wide range of solutions of interest to retail establishments, hospitals and universities, Class A office structures and stadiums,” says Ray Palmer, president of the Alliance Franchise Brands’ Sign & Graphics Division. “Our offering spans the spectrum from way-finding and experiential graphics to corporate art and traditional signage.”

The agSigns business at AlphaGraphics continues to provide growth opportunities for franchisees, says Grohs. “Sign solutions are an ideal complement to our current service offerings, enabling our Franchisees to be a single source for customers’ print and marketing needs. Our Centers continue to invest in personnel, training, equipment and the breadth of products and services available to them to grow sales and profits through our agSigns initiative. Our enhanced agOnline print and marketing management platform has positioned AlphaGraphics to take advantage of growth in the online and digital print segments of the industry by offering clients state-of-the-art print and marketing solutions to help get their brand noticed and earn new business. “

‘Only limited by the customer’s imagination’

Franchises will take on new initiatives and strive to offer a range of varying services in 2017 – all with the goal of promoting growth and revenue opportunities.

“Data services is an area ripe with opportunity,” says Cushing with Alliance Franchise Brands. “We know how to help members drive results for their clients, and marketing and data services are positioned to be a natural outgrowth of that. This year will be characterized by charging after the opportunities the company laid the groundwork for in 2016, including WorkStream workflow, WorkStream eCommerce, dual-branded centers, helping members continue to build value in their businesses, and growing the number of independents that join the franchise. We’ll also continue our work in other areas, capitalizing on the solutions we’ve been providing to clients for years.”

Lowe at Franchise Services indicates that “digital packaging, labels, and ad specialties” are just a few of the new services that they’re targeting in 2017. “We are excited about the business as we have ever been. The range of products we sell are only limited by the customer’s imagination. We can now sell almost anything that has our customers brand or message on it. What a great time to be in the business!"

ICED “will continue to promote marketing consultation as a way to build relationships and drive more print business,” says Groot.
“We’re constantly doing research on behalf of our owners, assessing our existing products and services and evaluating new products and services as well,” says Titus with Minuteman Press.

“We have spent the last few years focusing on new initiatives, including agSigns, agOnline, PrintSmith Vision, workflow integration, enhanced training, and the new website,” says Grohs with AlphaGraphics. “Our primary focus this year is the execution of these initiatives within our network to promote growth in sales and profits.”

Local, global, and expansion

How do franchises fit into the global print market? For several of the franchises, “being global” equates to first being local and focusing on nearby needs.

“Our franchises focus on supporting the needs of the mid-size business community,” says Lowe with Franchise Services.

And: “There are many emerging markets that will require the services of our niche: the small commercial printer,” says ICED’s Groot.

“We are active members of the local communities we serve – this allows our knowledgeable, service-focused owners and their employees to build strong, effective relationships that mean something to our customers. These relationships, coupled with our offerings and technologies, place us in a position for continued growth,” says AlphaGraphics’ Grohs. “Our locally owned Centers provide high-quality products and a high level of service to small, medium, and large companies. Our offerings in digital and offset print, signs and graphics, marketing services – our core products and services – provide customers with the breadth and depth required to meet their print and marketing needs.”

Alliance’s Cushing adds: “For years, independent print companies had the mindset of figuring everything out on their own. You weren’t a ‘real’ printer unless you invented it yourself and made all your own mistakes. Today, the enlightened independents can see great relevancy in being a part of a progressively minded network like Alliance Franchise Brands, as technology, e-commerce, lead generation, training, sales, and sales-management resources are readily available to them. Our franchise members can pursue big opportunities confidently knowing we have the talent and capacity to back them up.”

Two franchises do have expansion plans beyond the US:

• ICED indicates that Europe, Africa, and the Middle East are targets, “though our Master Licenses.”
• Franchise Services notes that “we continue to discuss opening our franchises in other countries as appropriate.”