Independent To Franchise? Opinions Part I

1. To help me find good workers. It is true I have to find the employees, but once I find them, they can help me screen, evaluate, train and keep those employees.
2. Measure the output and performance of these employees.
3. Provide name recognition. I have lost customers to Alphagraphics and Insty-Prints and do not know how to go back and retrieve these customers.
4. Provide assistance with established systems: accounting, billing, job filing, credit and collection policies.
5. Equipment purchases. Our purchase of a Xerox 5065 was a disaster. I am still fighting with Xerox.
6. With a major franchise, maybe Xerox will pay more attention. Besides they can make a more attractive pricing deal with the major companies.
7. Help in buying equipment. Besides getting a better deal they know what makes money and what does not.

1. I do have the opportunity to take advantage of the purchasing leverage of a much larger group than just my group of one. I am now in a group of almost 50 stores (+/- 35 company stores and +/- 15 franchisees) up and down the west coast and now expanding across the continent. When I call Xerox, Kodak, or the local canon rep they know the name LAZERQUICK and it does help get their attention. LAZERQUICK has been in the printing business for over 25 years and was the #3 top Quick Printer in the country in sales in 1994.

When LAZERQUICK buys equipment for their company stores franchisees have the opportunity to join in at their bulk purchase prices. Recently they were able to obtain very favorable quotes on some new color printers and we were all offered the opportunity to participate. Before they entered into the deal they had four or five color printers from various vendors lined up in an office testing them all out head-to-head. Something that I, as one little guy in the wilderness would not have the ability to do.

As soon as I joined LAZERQUICK my color copy service and supply costs dropped by 30% - upon renewal of contracts.

LAZERQUICK was helpful in my getting a like-for-like trade on my 5065 - after it had been down for 7 straight days one Thanksgiving week. I have invoked their name in other service situations as well. It always helps lubricated the wheels of action.

Anytime they do anything in bulk for the company stores we have the opportunity to piggy-back along. And of course having more franchise locations increases their leverage when they approach vendors.

I order some supplies direct from LAZERQUICK. They buy in pallet quantities, and even with additional costs it is cheaper then the 10 quantity column I would have to purchase to get a favorable rate directly - and I don t have all my money tied up in inventory.

Sometimes I use the LQ leverage to work in the local marketplace. I ve gone to the local supplier and said: You know I d really rather spend my money here but one of the reasons I joined LQ was to take advantage of their purchasing power. They have negotiated this deal - Now you don t have to match it to get my business, but what can you do? And it has gotten me discounts as much as 20% off list, and I can keep my money in the local economy.

2. One of the things that was significant for me was that they are in the printing business - not the franchising business. This means that they are not going anywhere - like away in the night. They are committed to succeeding in the same business I am involved in.

3. We have access to their entire management team. In the past week I have personally asked questions of the head of operations, The purchasing director, Mike Hart - Director of Franchising (several times), the head of Human Resources, The head of internal production, The training director and the controller. As well I have had conversations with a company employee and three franchise owners.

With my affiliation with LAZERQUICK I have bought a group of friends and peers. Even though we know who our competitors are in our towns, and visit with them at Chamber of Commerce events, it s kind of tough to get one on one with them about specific issues or problems. After all, we are all going after the same customers and dollars. But with LAZERQUICK I have immediate access to a pool of professionals in the same business who are on my side to help, assist, support and hand-hold if necessary.

I have at my disposal a resource of experienced managers. I can also call any manager or employee in the company and ask whatever I will and they will answer and share their experience with me.

4. I have to find my own employees but I frequently consult with their Human Resources person for a second opinion about advertising for help, who to hire, how to handle a discipline issues, termination or other points of interpersonal friction.

One of the first things I did after signing was to take their employee manual and modify it for my purposes. I had had a private consultant quote of $800.00 for this and that was a good chunk of my initial franchise fee right there.

Franchisees can use or modify any LQ training materials and resources and they are available on disk to make it even easier. With their systems and years of experience they have the tools and systems to aid the owner in evaluating and measuring productivity in the shop. They also keep an extensive collection of books and cassette and video tapes for franchise use. For instance - they have all the NAQP convention tapes so we can benefit from them without having to buy the whole collection ourselves.

5. We have the option to participate in their marketing efforts - or not. We make the call as to what is appropriate in our market and if we choose to co-participate they supply us with flyers, mailers, cards, or other signage as appropriate.

In review, our affiliation with LQ has been very beneficial for us. Their package offers the ability to tap into their expertise when we feel the need and still the autonomy to chase our own dream in our own manner. The economic advantages alone have more than made up for our monthly royalties and all the support and advice makes the deal even sweeter. Hope this helps. Good luck and keep up the good work.

1. To help me find good workers. It is true I have to find the employees, but once I find them, they can help me screen, evaluate, train and keep those employees.

My former franchise certainly never did one thing in helping me to screen, evaluate, train or keep an employee. I have received that help from NAQP and their association with SPSS and Directional Insight.

2. Measure the output and performance of these employees.
Again my former franchise never did anything to measure the output or performance of any employee - In fact when you ask for this kind of help you were told that they could not help - you are an independent business and must do it yourself.

3. Provide name recognition. I have lost customers to Alphagraphics and Insty-Prints and do not know how to go back and retrieve these customers.
I never had and results from my former franchiser s name. My name was and still is based on my performance and the work I ve done. McDonald s gives you name recognition in food, but no one looks for a printer by name except a Kinkos.

4. Provide assistance with established systems: accounting, billing, job filing, credit and collection policies.
This was one of the weakest areas of my former franchise. They made big talk and had thick books, but they were worthless. Again going to NAQP meetings will return 100 times the value and a small percentage of the cost.

5. Equipment purchases. Our purchase of a Xerox 5065 was a disaster. I am still fighting with Xerox.
An even worse area for my former franchisor - they sold my predecessors each a Xerox 9500 to run single copies on - a major disaster. Then they sold me two 1065s, another disaster. After I left and made my own selections I ve done much better (an Xerox 5090, 1090, 5380 and 5385)

6. With a major franchise, maybe Xerox will pay more attention. Besides they can make a more attractive pricing deal with the major companies.


Again, I ve gotten more attention from Xerox and BETTER prices (they had to pay my former franchise kickbacks - those came straight out of my pocket) since I left

7. Help in buying equipment. Besides getting a better deal they know what makes money and what does not.
No they don t, at least not what makes money for the printer - only what makes the biggest kickback for my former franchise

And that s his reasons. How reasonable are his expectations? Let us know what you think. That s what I think. Former Franchisee.

1. This printer has 8 yrs. experience in trying to find good employees; I don t believe franchisors or franchisees have any better luck than independents in finding them... I think the key in finding and keeping good employees rest squarely on the shoulders of the owner... does he pay well, fairly, is he honest, does he keep his promises, does he provide well maintained equipment and a good working environment, does he offer upward mobility, does he offer job security, etc.? These are just a few of the questions and I don t believe the franchisors offer and secrets that will make this task of keeping employees any easier.
2. Name Recognition -- I have never put much weight on name recognition... having the name of a franchise can be a double-edged sword... a bad experience with one franchisee can damage or hurt all of the rest; a bad experience with an independent only hurts that independent. Kinkos might be the only exception, one Kinkos is pretty much the same as the next when it comes to hours of operation, services offered and overall quality; however, even among Kinkos the quality of service varies dramatically from one store to the next.
3. Paying 4-8% in royalties is a lot to pay for someone who already has 8 years experience in the business... accounting systems, billing systems, etc. vary widely even among franchisees, and this kind of knowledge can be purchased a lot cheaper by simple networking, hiring a consultant, etc.
4. Most equipment and supply purchases can be made just as competitively as an independent as a franchisee, especially when you consider the royalties being paid; remember, there is no such thing as a free lunch. Contrary to popular opinion, the printing industry in general is not a major player for Xerox (Kinkos is an exception); Consequently, unless Xerox is really clearly at fault, I would not count on the Franchisor being able to exert enough pressure to get someone out of a hole they probably put themselves into in the first place.
5. Franchisors learn most about what makes and doesn t make money from their franchisees -- especially those on the bleeding edge. It is not absolutely necessary to be a franchisee in order to learn from them... once again networking in local chapters, NAQP, etc. is often a lot cheaper.
6. Before I made a final decision, I sure would want to talk to both current and former franchise members in the franchise I was considering joining, and ask them those same questions... I sincerely believe the printer in question is looking in the wrong area for solutions to what appears to be some serious problems... my guess is the answers are a lot closer to home, if he is willing to really listen and make some drastic changes.