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Commentary & Analysis

Redrawing the Franchise Box

By Noel Ward,

By WhatTheyThink Staff
Published: July 5, 2005

By Noel Ward, Executive Editor Unlike fast food franchises where individual owners were accountable for what McDonald's called Q,S,C &V (Quality, Service, Cleanliness & Value), franchised print shops had no strict performance requirements. July 5, 2005 -- Print franchises, usually called quick printers, got started in the 1980s, offering a path to a stable business based on rising business and consumer demand and proven technology. Numerous franchised operations opened, many with 20-year contracts. This provided security for franchisor and franchisee alike, but as technology and market conditions changed, it became difficult for both sides of the agreement to achieve the success they envisioned. Unlike fast food franchises where individual owners were accountable for what McDonald's called Q,S,C &V (Quality, Service, Cleanliness & Value), franchised print shops had no strict performance requirements. Customers' experiences could range from poor to excellent, and there was little beyond convenience to draw a customer to a particular store. Over the past decade, the changing dynamics of the print market has put pressure on quick printers to pay a lot more attention to keeping their businesses profitable and more agile in their response to shifting market conditions. The major franchises have all made efforts to support this, but often meet the same reluctance they experienced when urging shop owners to shift to desktop publishing and digital printing. Furthermore, many traditional printing franchisors are seeing a decline in participation as the 20-year contracts of the 1980s reach the end of their terms. Some printers are closing, while others just change the business name and keep on rolling, and the monthly franchise fee goes to their bottom line instead of the "home office." A New Box A new printing organization is hoping to capitalize on the changing printing market with a model that focuses on accountability and results. CPrint (Certified Printers International) allows its affiliates to continue to use their own individual identities (even one of an existing franchise), but still have use of certain trademarks, brands, marketing materials, training, buying group, management support, and other CPrint services to help increase sales and profits. What makes CPrint different is that affiliates are required to maintain performance and competitive standards What makes CPrint different is that affiliates are required to maintain performance and competitive standards if they wish to participate in the program. "No other printing franchise sets standards for the affiliate that must be achieved by a certain time or affiliation will be withdrawn," says Tom Crouser, president of Crouser & Associates, the firm guiding CPrint. "This helps us assure the quality for everyone, especially the customer." Crouser believes the industry is ready for a new type of franchise based on business processes and services. "The traditional franchises could be described as incubator franchises. They were very successful in selling a business system to help newcomers to the printing industry get started." He calls CPrint a 'second-generation' franchise that focuses on business process improvements, from accounting to sales to production management. It targets existing printing companies who already understand the basics and want to move to a higher level. It provides owners the opportunity and training to work on their business rather than in it. Crouser suggests that the printers who would be most interested in Cprint are not necessarily the most successful today – but are the ones who will be the market leader tomorrow. Fast-tracking for results Crouser calls CPrint a 'second-generation' franchise that focuses on business process improvements and provides owners the opportunity and training to work on their business rather than in it. A major difference is the length of license term, which begins at two years instead of the industry's typical twenty. The industry is changing rapidly and the short agreement period provides a sense of urgency. "We must demonstrate the value of CPrint to an owner quickly, so we build in accountability with a two-year agreement," explains Crouser. "We are working together toward the same goal. If either CPrint or the printer doesn't perform as expected, we can end the relationship." The printing company also has a responsibility to the organization. The affiliate has two years to meet the minimum performance requirements and competitive standards that are required for success, or it is not eligible for renewal, Once the company meet the standards, its is allowed to use all CPrint services. The helps assure CPrint promotes a brand recognized for its quality and service. Over the past six years, the organization's predecessor--maintained an 86 percent retention rate with over half of the drops resulting from not meeting standards. Support System Crouser suggests that the printers who would be most interested in CPrint are not necessarily the most successful today – but are the ones who will be the market leader tomorrow. More than 100 independently-owned printing companies from throughout North America are in the process of affiliating. Once they join, they have access to a support system that includes a business model with uniform financial management, budget formats, and business practices. "It's not only access," says Crouser, "we teach the model in our training programs and have business advisors who help affiliates implement it." All affiliates have an assigned business advisor and a board of directors--up to 7 owners of similar-sized firms--to assist in planning and ongoing operations. Affiliates also have increased training opportunities for employees. In addition to residential training courses and conferences, CPrint offers more than 30 hours of online employee training each month--more than any other printing organization in the country. The training is designed to train employees in printing-specific classes so they will be able to do a better job. Joe Davis, from Gerand Printing Service in Bowling Green, Kentucky has found the approach has helped turn his business around. " Small business people cherish the independence that goes along with owning their own shop. In many cases, we act like kings in our own countries and do not seek the wisdom of others. We create messes and do not know how to clean them up," says Davis. "The CPrint framework includes being accountable to a board of printers while we all learn how to make changes to improve our businesses. This Board of Directors approach keeps me moving in the right direction." Leveraging technology "CPrint also makes it easy for affiliates to implement new technology," said Crouser. "We investigate technology and develop the marketing material, training opportunities, and support for the products. This allows affiliates to get new technology to their customers faster and gives the affiliate a way to make his company unique." Crouser cites the SeePrint Driver program as an example of making a technology tool successful. "Our affiliates can access to a special computer program that automates the customer file transfer and eliminates many file problems," said Crouser. "The program has been successful in making it easier for customers to buy from CPrint affiliates. Our difference was that we didn't just introduce the program and hope someone would take advantage of it. We begin an ongoing program of training and support that helps the affiliate keep focused on the opportunities SeePrint Driver gives them." Affiliates can also participate in the group's buying cooperative. CPrint has purchasing agreements with a number of major vendors who, in addition to offering the best possible prices, work closely with CPrint to develop unique product offerings and special training opportunities. "Our buying partners not only help the affiliate's bottom line by helping lower the individual cost through group purchasing, but they also are helping us learn the best ways to sell their products and services," said Crouser. "It helps develop a partnership that most small printers couldn't enjoy any other way." The group has also developed some special marketing programs such as its RapidRepeat System and CPrint Gateway System to give the affiliates unique reasons to call on customers. Other Franchisees Welcome CPrint is targeting existing printing companies with 4 to 20 workers and from $300 to $3 million in sales, most in the $500K to $1.2 million range. These shops are owner-managed and are single locations. About half of CPrint affiliates have other members of the family involved in the business on a daily basis. While most affiliates are independent printers, being a member of another franchise doesn't preclude a printer from affiliating with CPrint. In fact, it may compliment the services of an existing franchise. A printer with a solid understanding of business, who has a trained staff, and has knows how to the new technology, can be extremely successful." "We see it in the auto industry where a dealer provides a number of different makes under one umbrella. We can do the same here by providing services and benefits not available anywhere else. Our low cost and short contract can make it profitable and practical." Crouser believes this can be an exciting and successful time for printers. "The printing industry is going through more change," said Crouser. "The number of printing companies has been shrinking. Consolidations are up and shops are closing. Yet more printing is being produced and sold than ever before. A printer with a solid understanding of business, who has a trained staff, and has knows how to the new technology, can be extremely successful." A decade ago I had a few consulting gigs where I prowled franchised print shops, auditing their practices and doing some evangelism for digital print, mostly on behalf of franchisors or master franchisees. In my humble opinion, CPrint offers what a lot of those businesses needed then, and what even more need today. It's a different approach to the market and it redraws the box for franchised print. It's worth checking out. And you can do that, at http://www.CPrint.org/ or give them a call 304-965-7100. Check it out!

 

 

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