Commentary & Analysis
Gerhardt and Marcantonio on Allegra's Acquisition of Signs by Tomorrow
Cary Sherburne, WhatTheyThink’s Senior Editor, had a few questions for Allegra’s Carl Gerhardt and Mike Marcantonio about this acquisition. Here’s what they had to say.
By Cary Sherburne
Published: February 1, 2012
As the press release indicates, Signs By Tomorrow will be held as a separate company within the Allegra corporate structure. According to Marcantonio, this “builds a wall” that keeps sensitive information, such as marketing, field support, customer information, etc., confidential so that this information is not being accessed by both sign companies Allegra now owns. However, certain functions will be shared at the corporate level that do not violate the competitive situation.
Gerhardt pointed out that this will streamline costs, and also allow more leverage with vendors, adding, “This type of arrangement is not without precedent in our industry. Way back, when Sir Speedy (Franchise Services) acquired PIP, it was a similar situation. They had overlapping territories, but it worked out for them.”
Both Gerhardt and Marcantonio asserted that if the integrity and intent of the organization is proper, this type of arrangement does not betray the trust of existing franchisees. Gerhardt added, “Our intent is to make us into a stronger company that will be able to provide better support for all of its components.”
It is possible, according to Allegra, that these business might be integrated down the road, depending on overall market conditions and those in certain markets.
Marcantonio reports that reaction from Signs Now franchisees has been “pretty positive,” adding, “We have always operated under the philosophy that we put our franchisees first, and Joe McGuinness operates under that same philosophy. What he didn’t do when he approached retirement was auction the business off to the highest bidder. He wanted someone who could carry on serving members in the way in which they were accustomed, and he hand-picked us for that purpose. We are very pleased with the executive team he has put in place, including President Ray Palmer and VP of Operations Andrew Akers.”
Both franchises have similar equipment configurations and offerings. Average store sales for Signs Now are just shy of $400,000, while average store sales for Signs By Tomorrow are just over $400,000. Gerhardt adds, “Each claims to have its secret sauce, but there are a lot of similarities in the profiles.”
One of those similarities is the deployment of HP Latex inkjet products in both operations.
Allegra plans to augment Signs By Tomorrow capabilities with its marketing expertise that it also brings to the other members of its franchise network. The company has also recently made a six-figure investment in FranConnect, a CRM solution that is available to all of its members. In addition, in exchange for the royalties that franchisees pay, Allegra invests in programs and resources to give back to franchise members, giving them a competitive edge over independent printers who do not have access to that type of support.
Gerhardt concluded, “Our network understands that there are big competitive forces out there that are common enemies, including Internet-based print providers and the Big Box superstores. We want to fight together rather than fight each other. One thing this company has always prided itself on is having integrity in what we do to enhance the businesses we serve—all of them and not one against the other. Over time, we believe this acquisition will prove to be a benefit to both Signs Now and Signs By Tomorrow, as well as the rest of the Allegra network.”