Print Franchise Review 2021

In this review, we are covering the five traditional print franchise organizations – Alliance Franchise Brands, AlphaGraphics, Fortusis, Franchise Services and Minuteman Press International. As we did last year, we are also separately reporting on ProForma, a network of print distributors. While this is a different franchise model than what we usually think of as print franchise networks, as a franchise network, it still accounts for a substantial amount of printing – in fact, about $538 million in 2020, up 5% from 2019 levels. Because of its different business model, it was the only network to demonstrate growth during this difficult period. This is largely due to the fact that many of the distributors were already working from home, and none of them had equipment production platforms they needed to support.

That being said, exclusive of ProForma (whose results are shown in the sidebar), the traditional print franchise networks generated more than $1 billion in systemwide revenue, down 23% from the previous year. Across all five franchises, average shop sales were $676,700. Full details for each franchise are provided in the charts and profiles included with this article and summarized in the chart below.

Minuteman Press International again had the highest number of centers at year-end (948) and the highest system-wide sales ($376 million). But in terms of average sales per shop, Franchise Services ranked the highest ($900,000), followed closely by AlphaGraphics ($850,000). Franchise Services had the highest performing center at $17 million, up from $13.6 million last year, followed by AlphaGraphics which had two shops in the $16 million range.

There were several commonalities among most of the networks that helped them stay afloat during the pandemic. These included:

• Support from headquarters in filing for and obtaining federal assistance in the form of PPP and other programs
• Headquarters assistance in pivoting to production of PPE and pandemic-related signage - In some cases, materials were ordered from overseas and re-sold in the U.S., resulting in increased brokered services as a percentage of overall revenues.
• The ability to rely on partners within the network to produce customer work, especially valuable in allowing centers to remain open as the effects of the pandemic and associated regulations shifted around the country
• Development of new applications to support customer business requirements during the pandemic - Most notably, this included the production, kitting and fulfillment of “meetings in a box” to support virtual events, including HR, training and other business areas.

The sudden onset of the pandemic, where it felt like everything changed overnight, was devastating for many small businesses. But being part of a franchise network, with the support provided by the franchisor, including IT infrastructure, networking, advice and guidance, likely allowed these centers to perform better than the industry at large. According to WhatTheyThink’s "Printing Outlook 2021," 45% of printing businesses with one to 19 employees said that revenues decreased 25% or more, with the franchise networks performing slightly better at an average of 23% year-over-year decline.

We also heard from most of the franchisors that while there were a few acquisitions of independent printing companies during 2020, many of those independents were relying on federal aid to help carry them through. Franchisors expect to see more conversion/acquisition opportunities become available as aid runs out, and some are not able to recover, or want to sell in the normal course of things – retirement, etc. The bottom line is that industry consolidation is expected to continue, and the franchise networks are ready and able to take advantage of that opportunity.

Franchisors also continued investing heavily in infrastructure, including production workflow tools, new application development, business intelligence, web-to-print and more. This is to be expected, since that infrastructure is one of the key selling points for them in attracting new owners.

Another trend we have noticed is the blurring of lines between print and sign franchises – print franchises are all adding signs & display graphics to their offerings and looking to that segment to bolster their growth, while some sign franchises are also starting to offer commercial print—and some sign franchises have long offered it, usually through brokering or partnership arrangements. As one franchisor put it, this is a recognition of the fact that, to a customer, the equipment used to print something and the size of the print are irrelevant. They just see it as printing and find it convenient to get everything from one source. This blurring between the two is the result of their adapting to this changing customer demand. It is likely that our future reports will combine the two, rather than reporting them separately. (See also this year’s "Sign Franchise Review 2021" on page XX.)

Another area of interest for print franchises is growth offered by adding more labels and packaging to the mix. While these can be more complicated sales cycles, most of the franchise networks have their sights set on developing this segment, especially for smaller customers that might not be able to absorb the cost of high minimum order quantities typically required from traditional packaging converters.

It was a difficult year, no question, but the print franchise networks were able to adapt fairly well with most centers coming out of the year in a solid cash position. Overall, the total number of centers declined only slightly – from 1,879 in 2019 to 1,813 in 2020 – some of which is attributed to consolidation of centers by owners that had multiple sites. It is also serendipitous that in 2019, several of the networks worked to either strengthen or eliminate weaker centers, coming into 2020 in a stronger position overall. 

Overall, we expect to continue to see the franchise networks play a role in industry consolidation as 2021 and 2022 play out, and we expect to see them return to a much stronger position by year end. That is based on the belief by many experts that we will have returned to some semblance of normalcy, at least from a business perspective, by year end. But only time will tell. There was a great deal of uncertainty on many fronts as the pandemic evolved, and quite a few unexpected surprises, including rapid development of vaccines, which are being rolled out in large numbers in the U.S. as we write this.

Here, then, are the details of each of the traditional print franchise networks.

Alliance Franchise Brands Marketing and Print Shares 2020 Experience and Future Outlook

When we spoke with Kevin Cushing last year, he was President of the Marketing and Print Division at Alliance Franchise Brands. He has a new role as of November 2020, as President of the Strategic Ventures Group.

“With the growing merger between print and signs, and the fact that the core processes of sales, marketing and business planning are the same across both disciplines, we thought we could provide more clarity to our franchise members by having one team, one approach," Cushing said. "We also wanted to be keenly focused on new avenues of growth for us. Ray [Palmer, president of the franchise’s Sign and Graphics Division] and I were doing a lot of the same things with a little focus on strategic opportunities. So now Ray has the leadership responsibility for our established franchise businesses, and I’ve taken responsibility for RSVP Advertising and some concepts we have in a test phase, as well as our corporate operations that include an Allegra location, an Image360 location and a dual-branded center with more concentrated management focus on them.”

Dual-Branded Allegra/image360 Center 

This shift in management strategy reflects what we have been seeing in the industry, the blurring of the lines between print and signs, and the need to place greater focus on new and emerging opportunities.

On the marketing and print side, Alliance Franchise Brands includes Allegra Marketing Print Mail, KKP, Insty-Prints and American Speedy Printing Centers. The organization has also created a dual-brand concept that incorporates Allegra and its flagship Image 360 brand under one roof, with 33 in place, the same number as last year, with time being spent on learning more about how to capitalize on the two brands and streamline their respective operations. 

As with most of the franchise networks, the pandemic took its toll, with systemwide sales down about 21%, from $249 million in 2019 to $196 million in 2020. Average sales per center declined from $909,539 in 2019 to $762,543 in 2020. The highest revenue center, however, only showed a small decline, from $9.9 million to $9.3 million. The total number of shops dropped from 279 to 261 in 2020, with a combination of some centers closing as scheduled or in response to the pandemic and some consolidating to work together to serve their local businesses.

“Early in the pandemic, we took a real quick U-turn, providing immediate assistance to all of our franchises on a number of levels, with respect with business continuity, how to survive this; a lot of work around liquidity, how to maintain cash positions," Palmer said. "We went so far as to give them pre-designed product offerings to shorten their time to the sale, and it worked. We were able to stabilize the decrease in sales, and even in a couple months in wide format, we saw growth due to pandemic-related products and services.”

One of the key elements was helping almost every one of its franchise members take advantage of PPP and other government support, with north of 80% participating in the first round of PPP, and about 90% of eligible centers participating in round two, taking advantage of some sort of government subsidy and maintaining a good cash position, in both the U.S. and Canada.

While most product categories remained relatively the same from a percent of revenues perspective year over year, offset printing went from 23% of revenues to 17%, and notably, brokered and other services climbed from 16% to 35%. Last year we combined the two; this year Alliance Franchise Brands broke it out as 24% brokered services and 11% other. PPE was a contributing factor to this shift, as well as centers recognizing a need to be more efficient, which sometimes meant brokering out work rather than doing it themselves. That accounts for the decline in in-house offset production, as offset outsourcing becomes more popular. Other was mostly marketing and fulfillment services.

There were a couple of factors that helped bolster revenues, preventing an even further decline. The highest revenue shop on the print side was the corporate print center; they served as a great example to the network as to how to pivot, according to Cushing. Contributing to that volume was the fact that the center was chosen to be the printer for the guide that went with the ventilators and respirators in the Ford/GE effort.

“We were also chosen to be the exclusive provider of the school-at-home initiative for the Detroit Public Schools,” he added, “a massive job.” 

Detroit Public School materials produced by Alliance Franchise Brands

In terms of mailing, Cushing noted that the political mailing season started slowly and later than normal, but the peak period was greater than ever, resulting in a more compressed political mailing season. Customers clamped down on direct mail early in the pandemic since they weren’t sure what was going to transpire, but it is picking up again.

In terms of talent acquisition, the experience of the organization is that it has been easier to acquire production talent than in other categories like sales, which we found interesting. 

Looking ahead, Palmer noted that historically, the organization has done a great deal of event work in both print and signs, but experts are telling them they don’t expect events to come back like they were in the past until at least 2023. At a macro level, financial consultants are expecting a rapid comeback with growth opportunities even this year. Admittedly, not all segments will come back the same way, such as events and property management, but there will be segments that come back. The key, according to Palmer, is to identify those areas that will grow.

“We are preparing for a strong second half, and we are already seeing things slowly start to come back from the pandemic," Palmer said. "Last year, January and February were terrific for us. An interesting note was that for many of the franchisees, while the top line was down, the bottom line was up due to the need to become more efficient as a result of the pandemic.”

Another level of support headquarters offered to its franchisees was the development of vertical industry packages for franchisees to serve specific industry needs during the pandemic. This was a result of extensive research into CDC and other guidelines on safe environments during the pandemic and enabled the franchisees to use that package with their customers, supported by corporate level marketing to promote a back-to-business program.

“The phones just took off,” Palmer said. “It was the right message at the right time. We were very early out, within four to five weeks.”

Finally, Cushing talked about the company’s WorkStream initiative, a vision for reduced touches, increased automation and e-commerce.

“Volumes in web-to-print in our network are very high,” he said. “Lean workflows and automation are other components of WorkStream, and the adoption is a bit lower but growing as people realize they can’t bring a staff member back or a staff member chooses not to come back. Franchisees also took advantage of the pause to implement more automation.

“I cannot imagine a time when a franchise network proved its value to its members versus being independent than what has been done this past year. I think Alliance Franchise Brands, and likely the other print franchises, provided a level of support to their members that simply wasn’t available to independent printers. We encourage our franchise members to continue to nurture relationships with the independent centers in their communities to help each other out. And when someone is ready to talk about succession, we should be a very viable option for them.”

AlphaGraphics Adjusts to Pandemic with New Products, Services

AlphaGraphics ended 2020 with a slight decrease in net number of stores, at 269, down from 273 in 2019, with four of them being company owned and 244 located in North America. Revenues were off 22.8% systemwide, from $304.7 million in 2019 to $229 million in 2020. Average sales per store were at $850,000, down from $1.4 million the previous year, in line with the experience of the majority of the other print franchises. The highest revenue shop was up significantly, however, from $12.5 million to $16.3 million. CEO Ryan Farris noted that two franchise owners actually hit the $16 million mark in 2020. The cost of investing in a center remains at about $300,000.

“The top end of the network performed well," Farris said. "If they had robust capabilities, they fared a lot better than the centers with limited production capabilities.”

One factor that helped was 197 owners applying for and receiving PPP. 

“The average loan was $100,000, with larger centers receiving up to $500,000, and most are applying for the second round in January/February," Farris said. "About 75% of them that qualified the first time, qualified the second time as well. It helped them maintain the staff they needed and not take a loss. Without the PPP loan, I think we would have seen more significant layoffs and certainly more closures. On a positive note, the network steadily improved sales, picking up steam each month between August and December, with a positive upward trend through the fourth quarter. In that final month of December, systemwide sales were only down year-over-year by about 13%.”

AlphaGraphics saw an increase in the percentage color digital printing compared to the year before, at 26% of revenues compared to 15% the year before. Black and white digital also grew, from 7% to 9% of revenues. Offset printing, however, was down. In 2019, the network did about $43 million in signs.

“In 2020, we did almost exactly the same revenue volume in signs, but as a percentage of overall revenues, it was significantly higher, 18% compared to 14% of total revenues," Farris said. "It was a whole different mix of products – a lot more window, floor and wall signage and a lot less event-related signage. If the broader network had more robust wide format capabilities, we would have performed even better.”

Direct mail was also up with people working from home.

Fastest growing and emerging segments for the network were wide format, packaging and labels.

“We wouldn’t have performed as well as we did in 2020 if we hadn’t gotten into the signs and wide format space several years ago," Farris said. "I know some of the sign businesses are adding commercial print. To me, it’s more about small business marketing solutions that include printing, and not about the specific output device as has been in the past, focusing on the traditional manufacturing mindset. I think it’s important to do commercial print, signs and marketing. It is important to provide comprehensive marketing solutions, provide those key communications through any and all mediums customers need. When it comes to supporting small businesses, it’s going to be a blended model. I can’t imagine people being specialized by specific manufacturing equipment moving forward.”

Brokered services were down.

“We got better at doing some of that work in house, like wide format," Farris said. "Work we would have normally sent out was done in the network. We didn’t have massive country-wide programs or very high volume print runs that would have been sent out to a trade printer. So we were able to do more in-house.”

 While some of the other networks were buying PPE (masks and gloves primarily) from China for resale, AlphaGraphics took a little different approach, selling a small volume of branded masks, but also producing safety shields, countertop dividers, ordering raw materials from overseas by the truckload and subdividing it for the network.

“Individual centers would cut them down, distribute and install them,” Farris said. “A lot of that work we did internally and didn’t outsource.”

Also in response to the pandemic, AlphaGraphics introduced a new product called Building Outstanding Experiences, agBox, to support virtual events. These are custom boxes they produce with direct print and other finishes. 

“Boxes can be anywhere from 1.5 to 4 inches deep, depending on the need," Farris said. "It could be, for example, a sales kit to introduce a company to new customers. The most popular is company parties or holiday parties where we send out the current HR materials, exercises and activities to accompany the Zoom call, through the holiday season. Now we are moving into the true virtual events. We work with their sponsors to add relevant promotional items to the box, put in all the swag materials and training material, events schedule, the normal things you would get at an in-person event, and we ship them out to the attendees. The average quantity is 30 to 50 boxes, so small orders, but we can produce those small quantities at an affordable per unit price for them, generally less than the cost of lunch. Since we launched it in November, we’ve done about $3 million worth of agBox kits. We’re looking at doing a national marketing campaign, since we see this need still being there. We think it’s our largest potential, with window, wall and floor graphics being the second largest as businesses and schools continue to open, providing social and motivation visual communications, updating graphics, etc. Digital marketing is our third.”

Example agBOX

Fortusis, which includes the Kwik Kopy Business Centers, Franklin's Printing and The Ink Well brands, was only down one net center in 2020 as compared to 2019, from 38 to 37. Annual revenues were down 22%, which is not out of line with most of the other franchise networks. In 2019, the network had one center with more than $1 million in revenue; 2020 saw three centers reach that mark, according to CEO Curtis Cheney, who noted that several centers actually did better in 2020 than 2019, largely due to a diversity in customer base. One success story Cheney noted was a center in Louisiana that printed all of the school materials for all of the students in their district and probably had the best month they had ever had.

As 2019 came to a close, Fortusis was on a path to start actively recruiting new franchisees, after spending time doing a full analysis of franchise offerings, new shop start-up configuration and more. That was put on hold when the pandemic struck. Although there was a net decrease in centers, three resales took place during the year, including two new owners who had no print experience. The plan had been to bring on two to three new centers in 2020, but Cheney was pleased overall that he was able to bring on new owners to take over existing shops.

In 2019, the average investment for a new Fortusis center start-up was $350,000, was reduced to $239,875 in 2020, and upon further examination, is now even lower. Cheney said that this reduction, ranging from $195,750 to $226,000 with an average of $210,875, is the result of reducing the initial franchise fee and redesigning center layout to reduce the cost on the furniture package while maintaining a robust equipment package.

Like most other franchise networks, brokered services were up in 2020 as compared to 2019, as was wide format and signage, with other categories remaining about the same in terms of percentage of overall revenues. Cheney attributes the increase in brokered services to the fact that some centers were closed during part of the year and needed to outsource work to continue to meet customer needs. And pandemic-related production of PPE and floor graphics also contributed toward overall performance.

Not all centers have wide format; in fact, as we spoke to Cheney, he was visiting such a center, and while he was there, four people walked into the shop who had been looking for both print and signs; the competitor next door couldn’t provide the signs, so they were asking if Fortusis could -- a clear indicator that adding wide format and signage might not only increase revenues through implementation of a new service, but also add to print revenue as well, since customers are likely to prefer a one-stop solution. Cheney said that from a customer perspective, they just look at it as printing, regardless of the size. 

Looking ahead, Cheney believes the network will be back to early 2020 levels by the end of the first half. The franchise is rolling out a new web-to-print solution with a significant investment to customize it to the network’s need.

“How do you create an e-commerce solution that takes full advantage of a franchise model?” he wondered. “Average sales prices for copying vary significantly depending on which part of the country they are in. We needed a website that could accommodate each center’s pricing, give them the ability to download their own work – to make it work for everyone is a challenge.”

One advantage Fortusis may have as it rolls out this solution is actually the small size of the network.

“Before we start selling a lot of franchises, we want to make sure our foundation is solid, we know exactly what we are going to do and what we can offer,” Cheney said. “The e-commerce piece has been a thorn in our side for a long time. It’s not cookie cutter.”

But working with his relatively small group, and understanding and meeting that array of requirements, should make it easier to extrapolate and build a system that will also support the needs of new franchisees as they join the network. The e-commerce launch is planned for early April with full implementation by July.

One of the other outcomes of the pandemic situation, according to Cheney, is that everyone has gotten more comfortable with virtual trainings, which will help make the roll-out easier.

Fortusis is also seeing an increase of walk-in business from people who are working from home and don’t have access to the infrastructure they had before; he expects that to continue moving forward.

“I think this is the perfect opportunity for me to rally our franchisees around the fact that no matter what comes our way, there is an organization standing behind them," Cheney said. "Just as we had all 13 of our centers in Texas close because of the ice storm, we had a number of centers that were able to offer them help. The more we can pull together and help one another, the better off we are.”

Franchise Services Shares Positive Outlook for Future Growth

Franchise Services, which includes the Sir Speedy, PIP and Signal Graphics, saw a significant decrease in centers in 2020, at 280, down from 322 in 2019. According to its President, Rich Lowe, this had little to do with the pandemic; rather the company disenfranchised its centers in China by mutual agreement. He noted that only 10 centers closed domestically. Revenues were down 22%, at about $900,000 in 2020, but in the early months of 2021, business is picking back up.

Its largest center actually grew substantially, from revenues of $13.6 million in 2019 to $17 million in 2020. Part of that growth is attributed to production of documentation for East Coast financial institutions that report on bankruptcies. 

Total systemwide sales in 2020 came in at $252 million. The network was up 6.5% in January and February, before the pandemic hit. Key growth areas included signs and brokered services. Lowe said that about 22% of the company’s business is in signs, up about 11% over the previous year, and he expects that to continue to grow, especially as we get back to in-person events, hopefully later in 2021. The largest volume sign business in the network is about $1.5 million, representing about half of that center’s business. Lowe expects that trend to continue, with 50% of revenues over time coming from signs.

Steve and Emily Albritton operate the Sir Speedy center in Tampa, Fla., one of the network’s more successful operations 

Digital color printing still represents about 25% of the business, and many of the centers have seen significant growth in mailing services with the pandemic. In addition to providing mailing services for end customers, the network had more than 5 million touches with its customers via direct mail and email to promote the business. He noted, however, that the company took a hiatus on its own promotional mail the first two months of 2021 to give centers the opportunity to update their mailing lists.

“So many people are working from home, have changed jobs or don’t have jobs,” he said, “that mailing lists quickly got out of date. Once we start back up, though, we expect that to continue to be a key business development service we offer our franchisees.”

On the brokered services side, he said that part of the business has continued to grow, largely due to a wider range of sourcing opportunities. Interestingly, a large part of that in 2020 was PPE, including masks, gowns and gloves, much of it imported from Asia. That is an area he believes will be part of the business model for the foreseeable future. In terms of brokered services in general, Lowe noted that when he started in the business 32 years ago, brokered services were about 8.5% or 9% of the business, and today on average it is north of 30%.

“We just didn’t have the sources back then that we do today,” he said. “That really has made a big change in our business.”

 In terms of challenges, a clear focus is helping both franchisees and their customers rebound their businesses and maintain cash flow.

“Because we have been able to take advantage of PPP funding from the government to the tune of about $16 million across the network in the first round,” he said, “most of our centers are in a fairly good cash position.”

During the year, several asset acquisitions were made – meaning acquisition of the assets of independent printers, including their books of business. Lowe does not see an emphasis being placed on opening new centers, however, in the current climate. Rather, there is a focus on developing a conversion program that will attract more small printing businesses to the network that would like to take advantage of the support and services the network offers.

A great deal of focus in the network is also being placed on recruiting talent, doing cross-training of staff, and improving workflow automation. He spoke about a tool developed by one of the centers in Florida, Plan Profit, based on SalesForce, and sitting on top of Printers Plan or PrintSmith.

“We have about 10% of centers already using this tool with great success,” he said, “and more that are interested in using it. I hope we can get to about 50% of centers using this workflow tool, which gives them a wide range of capabilities they didn’t have before to better manage their businesses.”

Overall, Lowe has a positive outlook as to the future of the network, and the industry in general. For Franchise Services, signage of all types will be a key growth element, and some centers are starting to work on offering packaging solutions. As in-person events scale back up, he foresees huge demand for soft signage. And various centers are also producing a wide range of indoor and outdoor signs, building and vehicle wraps and more. Most centers have roll-fed printers, some have flatbeds, and the network is looking forward to adding some of the new HP Latex printers recently announced, with white ink, that will expand the range of products that can be offered.

As a side note, this is the 32^nd year Lowe has been with Franchise Services as mentioned earlier, and his father, Don Lowe, just celebrated his 40^th anniversary, and 49 years of working with the same board of directors. As we noted last year, longevity has done nothing to dim their enthusiasm for the business, the success of individual franchisees, and the support and help they are able to provide to end customers in marketing and other materials and services.

Minuteman Press Sees Business Bouncing Back in 2021

For the first time, I think, since I have been following the print franchises, which dates back before the turn of the century, Minuteman had a slight decrease in the number of centers, from 967 in 2019 to 948 in 2020. Systemwide revenues for the network were down about 19%, pretty much in line with other franchise networks. Average shop sales were also down, from $632,222 in 2019 to $563,720 in 2020. The highest revenue center, though, increased sales from $7,484,595 to $8,045,482.

In terms of percent of revenues by application, color digital printing was down year over year, from 36% to 28%, with minor differences in other areas, including a slight uptick in brokered services.

Minuteman Press President Nick Titus attributes the decline in centers to the fact that there were a number of new franchisees that entered the system right before the pandemic hit and just didn’t have the resources to carry through. In addition, some multiple center owners who had kind of a hub and spoke arrangement, consolidated to one location, and were able to keep all staff on, but reduced overhead by closing some locations.

“March and April were pretty bad,” Titus said, “but we put everything we had into providing marketing materials to our franchisees and implemented some new programs to help them through this, including our Bounce Back program, offering free advertising to local businesses, and a marketing campaign called 'Let’s Build Your Business,' and that helped a lot.”

Minuteman also provided resources to franchisees relative to government subsidies including PPP, which most centers took advantage of. 

Minuteman centers also produced PPE to help with the pandemic. Minuteman centers were an early adopter of dye sublimation printing including heat presses, and those were placed into service to create masks in-house. All centers also produced pandemic-related signage. Titus sees that as a continued area of growth, including production of T-shirts, a nice addition for the owners to get involved with. It’s easy to understand, the demand is there, and the investment is low.

“At the home office,” Titus said, “one of our main challenges is staying on top of government regulations; every state is different, every county is different, every city is different. For example, many of the inner cities are still very much shut down. Whereas areas outside of those cities, more is open. You never knew what was coming at you next.”

At the center level,  few reduced the number of employees; payroll numbers are right where they have always been, at 22%.

“The biggest challenge for our owners,” Titus said, “is getting through to customers to help them with their marketing efforts. At this point, they all have their social distancing signage and PPE. It’s getting people back into the rhythm of marketing to build their own businesses and the things we can help them with. That’s always been a challenge, really; it’s just on a larger scale now.”

Titus said that the network is only down about 5% now, with many centers back to pre-COVID sales.

“We shot right out of it. In the U.S., in May, June, July, it was back up.”

He also said that there has been a lot of interest in franchising from people in restaurants, gyms, etc., who were really hammered and have always been in business for themselves.

“Right now the interest is high,” he said. “Right now people are working from home, but when things open back up, they don’t necessarily want to be commuting to the city and are looking for something closer to home.” Titus expects the number of centers to recover.

In terms of the drop in color digital printing as a percentage of overall revenue, Titus said that mailing has increased, including color postcards, so it’s likely that the volume didn’t really decrease that much; it was just categorized differently.

In terms of the future, Titus is bullish.

“I don’t think we are any different,” he said. “Our trends go with the industry. I definitely see marketing materials and promotional products coming back. Things will change; they may not be doing as many in-person trade shows, but virtual trade shows have been popping up all over. And there is a significant kitting and fulfillment opportunity there, to provide attendees with many of the materials they might have received by attending an in-person show. People want to keep their name in front of you, so I do see promotional products coming back more than ever.”

In terms of a return to in-person meetings, Titus said it’s all over the place. Different organizations have different perspectives. Minuteman moved its World Expo from 2021 to 2022. 

“We had to make that decision last year in April or May for contract reasons. No one knew where this was going to go. We’re feeling comfortable that we will be able to hold it in August of 2022.”

Proforma Shows Growth in 2020

As we did last year in the "Print Franchise Report," Printing News is also covering the performance of Proforma, a network of print distributors. While this is a different franchise model than what we usually think of as print franchise networks, it still accounts for a substantial amount of printing – in fact, about $538 million in 2020, up 5%.

Founder Greg Muzzillo ssaid that in 2019, the network generated just over $500 million (not the $600 million that was reported in last year’s review). Franchisees, who do not own any equipment, are still generating 38% to 40% gross profitability, and many were already working from home, so the transition to work from home was less of a challenge – that and the fact that they don’t operate any equipment. Rather, they source for their customers printing and promotional products, online technology, company stores and variable data solutions. The network’s highest performer came in at $38 million, slightly down from last year’s $40 million. There were 601 members in the network at the end of the year, compared to 600 the previous year.

Muzzillo said that December was strong with January 2021 being a little soft for unknown reasons. February numbers were not available at the time we spoke, but he expects 2021 to pick up as the year progresses.

During the pandemic, Proforma worked with its franchisees to quickly pivot to areas of opportunity. One Muzzillo identified in particular was uniforms, including scrubs.

“Uniforms for security, healthcare, construction (safety gear), elder care, businesses that were thriving, were in high demand. That’s one example of how we were able to help them take advantage of opportunities in not only products that were selling but markets that were buying.”

Muzzillo said that many of his members already have a lot of knowledge about what he classifies as “wearables,” including fabric types, thread count, etc., so it was an easy pivot for them.

“What’s certain is that even if markets are off 30% to 40%, there are still hundreds of  billions of dollars of promotional products being sold," he said. "That’s for certain. The key is to guide our people to go find what is being purchased right now.”

To foster this, Proforma did a great deal of training on how to sell in today’s world, how to utilize LinkedIn prospecting, including automated LinkedIn messaging, how to conduct Zoom sales calls – a total of some 300 webinars to help the network adjust to the new reality.

While the network previously produced a great deal of revenue from meetings and events, which were not happening, at least in-person during the pandemic, they were able to maintain at least some of that revenue to support virtual events with what Muzzillo described as “Events in a Box.” He noted that some businesses are even spending more on promotional products, wearables and event pieces because they didn’t have to pay for the event venue, meals, etc.

“People don’t always figure those things out,” he said, “about a third of those webinars were on the topic of what’s selling and who’s buying right now, and how do you go find them, and ‘Event in a Box’ was clearly one of those opportunities.”

Proforma continues to invest in its technology platform. Muzzillo said that one of the most powerful is the company stores.

“We offer several different levels of company stores,” he said. “That ranges from pop-up stores to high-end variable data stores. Because many companies have a distributed workforce now, they wanted to be able to deliver items that would normally have been picked up at the office and let their people order online.”

“I think there will be a shake-out this year," Muzzillo said. "Sometimes the difference between slower sales and expenses not falling, it takes a while for it to catch up to businesses. We are now seeing it catch up. We’re seeing businesses having fire sales and really good salespeople looking for better homes. PPP has helped business stay afloat, but it’s a temporary fix.”