Franchise opportunities usually involve launching fresh concepts or opening up new territories with tested ideas.
But Allegra Network of Northville, Mich., is taking a different twist on the franchise model, using it to consolidate an aging industry.
Allegra matches franchisees with quick-print shop owners looking to retire or sell. The self- described “E-harmony of the printing industry” expects to complete about 60 sales this year, said Darryl Buchanan, the company’s vice president of franchise development.
Although the company has been around since 1976, Allegra in recent years has shifted its approach from placing franchisees into new shops to helping them acquire existing ones.
Nationally, Allegra has about 400 small print shops and 200 sign shops within its network. In Colorado it has only two shops, one in Wheat Ridge and one in Colorado Springs.
Allegra should gain a more commanding presence here with plans to place franchisees in another eight shops in the state, four in the metro area and four outside, Buchanan said.
“Denver doesn’t need more print shops; it needs stronger print shops,” Buchanan said.
For a $40,000 franchise fee, Allegra trains those new owners, typically refugees from the corporate world, to run a printing business.
The franchisees must also separately pay to acquire the existing printing business that Allegra has matched it with. A franchisee can expect to pay $250,000 and up, depending on the revenues of the shop.
As franchiser, Allegra also negotiates discounts on equipment and supplies, provides marketing assistance and offers peer support from other owners within the network.
The ideal franchisee is someone who has spent 10 to 20 years in the corporate world and wants to leave the rat race but isn’t ready to retire, Buchanan said.
Most of the new breed of franchisees are in their late 40s or 50s, with some accumulated savings they would like to convert into a source of income.
John Unruh and Judy Sherman, a couple who came to Colorado from New Jersey as Allegra franchisees in 2004, fit that bill.
Unruh left a middle-management job in the telecom equipment industry. Sherman, his wife, continues to split her time between a job at AT&T and marketing their business, Allegra Print & Imaging in Wheat Ridge.
The couple have taken their printing business from $500,000 in sales to around $1.2 million through internal growth and by acquiring other operations, primarily for their customers.
When he isn’t out drumming up new business, Unruh focuses on scouting out owners looking to retire. He is in the market for a sign shop, a mail house or a digital copy shop.
Faced with the choice of getting out or spending the money to upgrade to digital equipment in a consolidating industry, many owners want out.
“We bought at the bottom end and things picked up,” Unruh said. While getting equipment from an owner who is selling is a bonus, the real interest is in getting new customers.
Most of Allegra’s shops focus on custom jobs for businesses — printing small quantities with quick turn-around times.
Running more jobs through a larger shop improves efficiency, generating the cash flow needed to buy more specialized equipment, provide more services and purchase competitors, Unruh said.
“I think based on the size of shops they are looking for, it is a very good strategy,” said Kathy Lauerman, president of the Printing & Imaging Association of Mountain States in Denver.
Although there are fewer print shops today than in the past, the overall volume of work is holding steady and employee counts per shop are increasing, she said.
Consolidation and technical advances have allowed the newer generation of print shops to do jobs for smaller- business customers that were too costly in the past, she said.
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com
