What I Like (And Don’t Like) About the Proforma (Promotional Products) Franchise Opportunity

What I Like About the Proforma Franchise Opportunity

1.  Proforma is a business-to-business franchise opportunity in a $200 billion market.  It involves selling to small business owners over 1 million different promotional, print, and marketing communications products and services supplied by a network of vendors (over 360 preferred manufacturing companies).

More specifically, Proforma franchisees are salespeople — or when they reach a certain level, manage a sales force — who sell marketing solutions to their clients by offering Proforma’s comprehensive product line, which includes:

• Promotional Products – brand awareness campaigns, trade show programs, corporate gifts, etc.
• Custom Printing Services – digital printing, custom packaging, creative services, etc.
• Business Forms, Documents, and Management Services – business cards and stationary, checks and other financial forms, invoices, etc.
• eCommerce Solutions – control brand identity, provide sales force with customizable marketing materials, collateral management, etc.
• Multimedia Solutions and Services – video production, 3D animation, interactive presentations, website development, etc.
• Total Product Management – consultation, graphic design, print management, product sourcing, inventory management, distribution, and order fulfillment

2.  The Proforma franchise opportunity is available to existing industry business owners ready to grow, existing industry salespeople looking for independence, and non-industry aspiring entrepreneurs looking for opportunities in the lucrative business-to-business market.

3.  Manufacturing companies produce almost everything that Proforma sells.  Proforma has built strong relationships with these manufacturers and as result, franchisees benefit from special discounts, new products, and unique programs.

4. Proforma offers back office support (order entry and reporting, accounting, collections, financial planning) thereby minimizing, or sometimes completely eliminating, the franchisee’s back office operations.

5. Proforma’s B2B sales lead generation service can create potential customer lists for franchisees, so that they can begin calling and sending awareness marketing campaigns.  Franchisees can even ask Proforma’s business development team to set up appointments for them.  Through the appointment setting program, Proforma can make introductory calls on behalf of franchisees to find the decision makers and learn more about the prospective companies.  Proforma secures 350 appointments per month on average.

6.  Proforma’s business development team — consisting of full-time, experienced Request for Proposal (RFP) process specialists — assists franchisees in crafting responses to RFPs that can range from 10 to 300 pages.  For those accounts with a large enough sales potential, franchisees can work directly with the RFP specialists to develop a proposal that is professional and appropriate to the request.  For smaller proposals, there is an extensive library of materials available for use by franchisees.

7.  Proforma has a dedicated mergers and acquisition staff that can help franchisees who want to grow their business by purchasing or merging with another company in the industry.   The Proforma team can help with finding merger and acquisition prospects, negotiating the deal, and assisting with post merger integration.

8.  In most cases, a Profoma franchise is a homebased business. If the franchisee has no previous experience in the promotional product or print industry, the franchise fee is $29,500.  Franchisees pay a one-time fee of $4,500 for a start-up marketing kit, and pay monthly royalties on a declining scale of 8%-6% of sales, 1%-0.5% for the marketing fund, and a technology fee of $100 per month.

9.  According to the 2010 Franchise Disclosure Document, Proforma franchisees average 36% gross margin on an average sales volume of $401,588.  Typically, individuals franchisees are able to take home 80%-85% of the gross profits (so on average, franchisees take home between $115,657 to $122,885).

10.  Another very unique aspect of a Proforma franchise is that franchisees can leave the network at anytime, with just 60 days of advanced notice.

* The Proforma franchise has no territorial exclusivity, so franchisees can market to any small businesses anywhere.  I’m on the fence whether to consider this as good or bad.  Normally, I would say that having no territorial protection is a bad thing, but since this franchise is heavy on the sales function, it’s nice not to be restricted to a limited sales territory.

What I Don’t Like About the Proforma Franchise Opportunity

1.  My only fear is that the Internet will eventually transform this industry, just like it has so many others.  Of course, there will always be a need for a personal, full-service approach to selling promotional, print, and marketing communications products and services.  But eventually, I expect the widespread online availability of promotional products direct from manufacturers will put pressure on the franchisees’ gross margins.  Even if it’s just the promotional products side of the business that is impacted, this will still cause a dent in revenues.