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Acquisitions Places Allegra Network in Second as Largest Print Franchise

Press release from the issuing company

Troy, Michigan, June 3, 2002 -- Allegra Network LLC, jumped from fifth to second largest printing franchise in the world in systemwide sales after the organization's acquisition of Insty-Prints, Inc. this year. The execution of the company's acquisition growth strategy affirms Allegra Network is at the forefront of the industry's massive consolidation trend. The acquisition of Insty-Prints expands the company's geographical reach to more than 500 locations in North America, Poland and Japan and systemwide sales of $306.9 million (2001) and marks the third acquisition Allegra has completed in the last seven years. In 1995, Allegra acquired Zippy Print, a Canadian franchise printing company and in 1998, the company acquired the franchise agreements of Quik Print and Instant Copy centers from XYAN, Inc. Allegra Network's recent acquisition successes come during a period of rapid industry consolidation. In 1989 there were 26 franchise organizations in the industry; in 2001, that number dropped to just 14. The number of individual locations in the franchise sector also has been steadily decreasing for several years; 229 shops in 2001 were closed ? representing a 6% decline from the previous year. In 2000, there were nearly 32,000 commercial printers in the United States. By 2010, it is projected there will be only 23,500 (a 26 percent decrease), according to TrendWatch, a leading industry research and consulting firm. However, as the number of locations decline, industry sales continue to climb. Due to industry growth and emerging market and technology forces, printing sales are projected to grow more than 40% from $68.4 billion (2000) to $96.3 billion by 2010. "Our acquisition growth strategy has helped put us in a leading position in our industry," President and CEO Bill McIntyre commented. "Our increased size provides us with the leverage to bring more value to all of our franchise members in the areas of marketing, technology and national vendor contracts." In addition to the organization's successful corporate acquisition growth strategy, Allegra Network has demonstrated tremendous stability and growth opportunity for its franchise members. In 1995, the company created the Acquisition Program for its franchise members to enhance the value of their business through the completion of a successful acquisition. The program assists franchise members in identifying suitable independent printing businesses to purchase and guides them throughout the entire purchasing process. Since the program was established, Allegra Network has completed 117 acquisitions contributing to more than $36 million in incremental sales. "Acquisitions are one of the quickest ways to build sales and profitability," commented Darryl Buchanan, vice president of franchise development. "It is important to take advantage of the industry's consolidation as well as the many benefits acquisitions offer." Statistics show that Allegra Network members who completed an acquisition kept 74% of their acquired sales at the end of 12 months. In addition, those members also raised their sales 34% one year after completing an acquisition when compared to sales one year prior to an acquisition. Franchise members who completed an acquisition have also kept 79% of their acquired sales and have raised their total sales 45% two years after doing an acquisition when compared to sales one year before doing an acquisition. Franchise members also agree that completing an acquisition brings many growth opportunities. Allegra Print & Imaging Owner Ray Buening boosted his business from $738,000 to $1.2 million after the completion of an acquisition. Ray commented, "The Acquisition Program is a very simple and easy way to identify print companies that are interested in selling their business. There was very little time required on my part to get started; the experienced personnel and equipment acquired greatly enhanced the service and capabilities we offer to our customers." Despite a weakened economy presenting hard times for many businesses, Allegra Network's estimated sales per shop of $567,000 marked a 3.3 percent boost from last year's figures. "In a difficult economy, it is especially important to provide our franchise members with the programs and support necessary to grow their businesses," commented Bill McIntyre. "The Acquisition Program creates additional opportunity for them to do so." Allegra Network ranks in the top 200 in sales among all franchise companies worldwide and is celebrating its 25th anniversary in franchising this year. Allegra Network members specialize in full-service print and graphic communications and include Allegra Print & Imaging, American Speedy Printing Centers, Instant Copy, Insty-Prints, Quik Print, Speedy Printing Centers, and Zippy Print. The company's principal shareholders include members of Allegra Network management and Domino's Pizza founder and former CEO Thomas S. Monaghan.