The Pros and Cons of Converting Your Independent Business to a Franchise Brand
If there are concerns from independent business owners about converting to a franchise, Image360 Franchise Development Manager Mike Miller knows well, “First and foremost it’s the name change: ‘Do I have to change my name?’ Next is, ‘Do I lose my independence?’ And third, ‘Will there be a royalty fee?’”
Mike has been in franchise development for nearly a decade. He works directly with entrepreneurs who want to open a new Image360 Center and with existing franchise members and entrepreneurs who are looking for Image360 resale opportunities. He also works with independent sign companies and independent print companies discussing the benefits of the Image360 Advantage™ Program and our Independent Dual Brand (IDB) Program as an add-on to their respective businesses.
“For independent sign businesses, the reality is you do have to transition to the Image360 brand,” says Mike. “But with our Advantage™ Program there are countless benefits that come your way. For independent print Centers, we also have our IDB Program where you maintain your existing business and add an Image360 onto it. In both cases Image360 doesn’t remove the independence from your independent business: You’re still in business for yourself, but no longer by yourself. And yes, there is a royalty fee, but you gain access to the many benefits of the Alliance Franchise Brands network.”
Image360 introduced its Advantage™ Program in 2013. The first independent owners to convert to Image360 were Earl and Teresa Walker operators of Indigo Signs in Tucker, Georgia, a suburb of Atlanta. Earl’s background was in creative design and business management. He opened as Indigo Arts in 1998 as a home-based business. Teresa worked in banking for 25 years before she joined Earl in the business in 2007. [Their full story appears in our blog titled: “Why Independent Business Owners Earl and Teresa Walker Converted to Image360®.”]
“I connected with the Walkers through a grassroots direct mailer to the greater Atlanta area,” said Mike. “I tried to reach Earl several times, and when I finally got him on the phone, I said, ‘My name is Mike Miller, and I’m with Image360.’ I’ll never forget how Earl responded, ‘I know who you are, and I know what you want.’
“Earl and Teresa were running their business the best they could, and realized they couldn’t get over the hump. Was it sales? Was it marketing? Was it operational support? Like all independents, it turned out the Walkers needed a little bit of all three. We helped Earl with a sales strategy: How to get out in front of people. How to meet new clients. How to request the proposals. And, how to close the deal.
“We provided them with marketing support including social media and a brand-new, fresh website. For operational support, we helped the Walkers in terms of reduced pricing on materials that brought their cost of goods down and increased their profits. We conducted an ROI analysis on their equipment: Is it time to buy a piece of equipment? Is this the right piece of equipment to buy? Our in-house support staff sat down with them and discussed all that. We’ve been able to provide the Walkers with support across operations, sales and marketing.”
Most independent business owners don’t understand a royalty. But when they get into business with Image360, they quickly realize and appreciate the ongoing return when paying the fee. It’s worth repeating here what the Walkers had to say about the abundant support they receive.
“As an independent, you’re winging it and hoping that it gets you where you want to go,” said Teresa. “With Image360, we’re a member of a network of sister Centers that we can talk to. In the past, if we couldn’t figure it out, it wouldn’t get done.”
“I wasn’t a numbers person,” admitted Earl. “I knew art, and I knew graphics. I knew how to make signs, and I knew how to print. But I didn’t know all the ins and outs of running a business and looking at numbers, comparing margins, and having a supply chain that you can buy from. Now we have a regional director, and we’re part of a Performance Group that’s holding me accountable. As an independent business owner, you have to have someone holding you accountable.”
The IDB Program is another option to join the Alliance Franchise Brands network and still retain an independent identity. As an example, Mike shares the story of Al and Nancy Karnavicius. They were coming out of the real estate business and opened a quick-print shop. “We bought a copier,” said Al, “hired one employee, and launched our independent Bayprint business in 1982, serving customers primarily in Pinellas County in the Tampa Bay area of Florida.
“The business has evolved and today our expertise is in interior display products. We know a lot about that and we like selling it. But we’ve found that there’s a limit to what we are able to do as a small independent company. I have a very good friend who owns a print shop and bought a sign and graphics franchise as a bolt-on to his business. His business has taken off.
“As luck would have it, Mike Miller walked in one day and said, ‘Hi, I’m from Image360. Would you be interested in learning about our franchise?’ I told him I didn’t want to lose my Bayprint identity, but I’d be interested if they had a bolt-on program. We met several times, did our due diligence, signed papers in November, and celebrated the Grand Opening of Image360 of St. Petersburg Central on February 27, 2019.
“I never would have ever imagined being in a franchise because I’m a very independent guy. But, I liked this concept a lot: the training, the technical support, the marketing support, the ability to have peers who are doing the same thing who you can talk to in a formal or informal setting. Plus, the Image360 program is a flexible, multi-year deal, so we’re not locked in for the rest of our lives. We’re in a position where we’ll be looking at retirement in a few years, and the potential for an exit strategy within this system was a real motivator.”
Mike added, “A lot of independent sign and graphics owners don’t realize that when they go to sell and exit their business, the stars have to align for them to find a buyer—someone with industry experience, who is interested in the business, and has the means to take it on. For Al and Nancy it made sense from an exit-strategy standpoint to partner with us and convert the sign portion of their business to Image360. Now when they go to sell this business, they can model it as a cash-flow positive business, in an exciting industry with the backing of a franchisor that is willing and able to provide the support they’ll need to take on something of this magnitude.
“The bottom line is if you’re in a position where you own either an independent sign or an independent print company and you want to bolster the sign and graphics portion, Image360 has a program that is tailored specifically for that with marketing and sales and operational support, including exit strategy planning. It’s definitely worth your while to take a look at the opportunity to see if it might have some benefit to your situation and your goals.”