Cary Sherburne: Hi, I’m Cary Sherburne, Senior Editor at WhatTheyThink.com, and it’s my great pleasure to be here with Carl Gerhardt, who is Chairman of Allegra Network, and a finalist in the 2011 Print CEO of the Year Award. Congratulations.
Carl Gerhardt: Thank you Cary. I’m very proud and actually surprised to be a member of that group of five. Thank you very much.
Cary Sherburne: And so maybe you can talk a little bit about what are some of the achievements that you’ve done within Allegra Network that you believe led to this award because, of course, it’s, you know voted on… we have a group of experts that narrow the field. We had 44 nominees, by the way. So you ended up in the top five out of 44, and then your peers vote on the top five to rank them, so it was quite an achievement you should be proud of.
Carl Gerhardt: Well thank you very much. And also I’d say congratulations to my good friend and arch rival competitor, Kevin Cushing with Alpha Graphics. Kevin’s done a very good job there so we rival each other in a lot of ways.
Yes, as you know Cary, I came into take the job of Chief Operating Officer back in 2004 of Allegra Network. And really, we were doing a new strategic plan for the company and really trying to redefine a growth strategy because what used to work in franchising, in our segment of the industry, really wasn’t working any more. So really, we did probably; I’ll say three things that were the most significant. One was we decided to do a bit of a diversification strategy, so we decided to get into the wide format end of things fairly significantly. In 2005, we successfully acquired anther franchise chain called Signs Now, which gave us a very nice growth. They had about $90 million in system wide sales. A couple of other franchise members, which we have, and plus we were moving our printer centers into wide format as well. So the diversification strategy was one of those.
The other thing we did was develop also, a way for… to bring some independent printing operations into our system, we call the Matchmaker Program. So we would look for centers that fit our model, kind of and where the owner needed an exit strategy. We would bring in a buyer from the outside and make the match; we called ourselves the eHarmony of the printing business. And bring them into our network. And we’ve done somewhere close to 50 of those since I’ve been in the… I took the position of Chairman in 2000… or excuse me, CEO, in 2007, and then just transitioned to Chairman in July of this year. But… so we brought in a good number of those. So we have that and we also have a program now, as Alpha Graphics does to allow people to just affiliate with our chain as well, so…
Cary Sherburne: So they’re existing businesses, same owner, they just convert to the franchise model.
Carl Gerhardt: They can transition to the franchise model, correct. And we’ve got so many slants on that that we think are going to be interesting as well. The third thing, that’s very significant as well, is about four years ago, we launched a major strategy to really move seriously into the marketing arena, to become a marketing communications provider as well. We brought in a Chief Marketing Officer, who ran one of the top 50/50 business-to-business agencies in the country, to be our Chief Marketing Officer. And we now have our Marketing Resource Center; in our new headquarters building location we’ve made big investments in that. So we have a staff of people in the Marketing Resource Center that allows us to put our franchisees through a certification program where they become what we call marketing central qualified. And we’ve put over 100 of them through that, we’ll probably put another 100 of them through that over the next year or two where they can really make the transition. And we changed the brand too, from Allegra Print Imaging to Allegra Marketing Print and Mail. And NC Prints will use Marketing Print Mail as a print line too.
So we’re changing the model to marketing companies that also do print. And that’s a major transition. A lot of people are talking about it, we’re actually doing it. And we think it’s pretty successful, but it’s taking some investments to do that.
One quick thing, a fourth way also, we’ve had a management transition. You see, I was Chairman, this was for the CEO. I was CEO until July 1, and then Michael Mark Antonio is now President and Chief Executive Officer. We’ve been going through that transition for about two years here now really, so.
Cary Sherburne: Now, he’s from outside the industry, right?
Carl Gephardt: He’s from outside the industry, correct. He worked for Domino’s Pizza; he was the Vice President there, made an investment in this company in the year 2000 along with his father-in-law, who was the founder of Domino’s. And they’ve been our majority investors. Mike’s the majority investor. He was a passive investor, but once we started this marketing initiative, he sort of fell in love with… with the industry and with our franchise members and decided he really wanted to come into the active management of the company. So that was about three to four years ago. So that’s when we sort of began the transition program where Bill Macintyre, who was Chairman at the time, he retired July 1. And I’m now Chairman, so at some point I’m going to fade into the background as well. Not quite yet, and but, Mike is really running the day-to-day operations of the company now. So I’ve got more time to do things like this.
Cary Sherburne: Yeah, that’s great. Well congratulations again. Well deserved and…
Carl Gephardt: Thank you and congratulations for WhatTheyThink for what you folks have done to bring a whole new dynamic to the industry and communications and it’s been very needed and very effective, and it’s helped us a lot, all of us.
Cary Sherburne: Thank you very much.
Carl Gephardt: Thank you.