In this FDD Talk 2017 post, you’ll learn the following:
- Section I – Background information on the Proforma franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Proforma franchise, based on Item 7 of the company’s 2017 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Proforma franchise, based on Items 5 and 6 of the company’s 2017 FDD
- Section IV – Presentation and analysis of Proforma’s financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
- number of Proforma franchise owners in operation for the entire 2016 calendar year that had 2016 sales greater than $400,000, greater than $1 million, greater than $2 million, greater than $5 million, and greater than $10 million, respectively
- number of Proforma franchise owners in operation for the entire 2016 calendar year that had 2016 gross profit greater than $100,000, greater than $250,000, greater than $500,000, greater than $750,000, and greater than $1 million, respectively
- number of Proforma franchise owners in operation for the entire 2016 calendar year that had 2016 gross profit percentage greater than 35%, greater than 40%, greater than 45%, greater than 50%, and greater than 55%, respectively
- 2016 average, high, and low order size for Proforma franchise owners during calendar year 2016
- number of Proforma franchise owners with 2016 sales over $1,000,000 through $1,999,999 (Million Dollar Club Franchisees), and their average, high, and low gross sales
- number of Proforma franchise owners with 2016 sales of $2,000,000 or greater (Multi-Million Dollar Club Franchisees), and their average, high, and low gross sales
- 2016 average gross sales, gross profit, and gross profit percentage for start-up franchises (i.e. franchise owners entering the system without relevant industry experience)
- 2016 average gross sales, gross profit, and gross profit percentage for RIE franchises (i.e. franchise owners entering the system with relevant industry experience)
Section I – Background Information
13 Things You Need to Know About the Proforma Franchise
Record Number of Owners in Million and Multi-Million Dollar Clubs in 2016
1. To start off 2017, Proforma announced that a record total of 171 owners achieved million or multi-million dollar success in 2016. Of these top performers, 16 owners were welcomed into the Million Dollar Club for the first time and 14 owners were inducted into the Multi-Million Dollar Club.
2. Proforma presented the new inductees with Million Dollar Club jackets at a ceremony held at the Ritz Carlton, Dove Mountain in Tucson, Arizona. They were also rewarded with a three-day getaway to the world-class resort to enjoy networking with supplier partners and to celebrate each other’s accomplishments.
3. Proforma also had an unprecedented 14 owners included in the Inc. 5000 list of the fastest growing private companies in the United States. In addition, Counselor Magazine named Proforma as the number two Best Place to Work in the industry in the large companies category.
Launches 600th Client eCommerce Store
4. In mid-October, Proforma announced that it had launched its 600th client eCommerce store on its ProStores platform, a proprietary online storefront system. The ProStores platform was introduced in 2016 to provide B2B and B2C end users with a streamlined, Amazon-like experience for online purchases.
5. The company says that a “combination of soaring online buying trends and the enhanced capabilities of the ProStores platform” has driven a 33% increase in the number of online company stores that the brand has created since launching last year.
6. According to Brian Carothers, Proforma’s Chief Technology Officer, “Both Proforma owners and their clients have reported significant time and financial savings by managing large print and promotional programs through ProStores.”
Executive from Brand’s Early Years Returns in New Position
7. In September, Proforma welcomed back Alan Chippendale, an ASI Power 50 member and the former head of BrandAlliance, the second-largest distributor firm in Canada, as the company’s Senior Vice President of Business Development. In his new position, Chippendale will lead the brand in launching a new bundle of distributor services exclusively for new Proforma member owners with sales ranging from $5 to $50 million.
8. This service package will launch in January 2018 and will give high level owners premier access to Proforma’s new $10 million state-of-the-art technology platform and proprietary eCommerce solution, exclusive one-on-one meetings with the industry’s top suppliers, business development and marketing tools, sales representative prospects, and more.
9. When Chippendale previously worked at Proforma (from 1987 to 2007), he helped the company successfully expand its offerings to include promotional products and recruited more than 25 of Proforma’s most successful million and multi-million dollar producers.
10. Proforma, which provides medium-sized businesses and large corporations with business documents, forms, promotional products, printing, and other services, was founded in 1978 by Greg Muzillo and a college friend with a budget of $200. Within a year of its founding, Proforma had earned $250,000 and built up a client base of over 300.
11. By the early 1980s, sales had reached $1 million and in 1986, Muzillo founded PFG Ventures to franchise Proforma nationally. At the start of the 1990s, Proforma opened its first international location in Canada and by the beginning of the next decade, there were 500 locations open.
12. Proforma has continued to grow and today, there are over 750 stores worldwide. Additionally, Proforma has appeared in Inc. Magazine’s Inc. 500 list of Fastest Growing Companies three times.
Entrepreneur’s Franchise 500
13. Proforma has appeared on Entrepreneur’s annual Franchise 500 list every year in the past decade. The company’s highest rank was No. 59 in 2012, while its lowest rank was No. 476 in 2017.
Section II – Estimated Costs
- Please click here for detailed estimates of Proforma franchise costs, based on Item 7 of the company’s 2017 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Proforma’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2017 FDD.
Section IV – Financial Performance Representations (Item 19, 2017 FDD) and Analysis
- To help you evaluate this franchise opportunity, Proforma has compiled certain Gross Sales, Gross Profit, and Average Order Size information for the calendar year ending December 31, 2016.
- Proforma has compiled the information for each franchise classification based upon information Franchise Owners have reported through its system. Proforma did not audit this information.
- Some Franchise Owners have earned this amount. Your individual results may differ. There is no assurance that you will earn as much.
- Proforma has computed the average Gross Sales, Gross Profit, Gross Profit Percentage, and Average Order Size for each type of franchise based upon information it has collected in the ordinary course of business.
- Proforma compiled this information only from Franchise Owners whose franchised businesses were in operation for the entire year. Results from Franchise Owners who either began or terminated their franchise relationship with Proforma during 2016 are not included.
- The Gross Profit information was derived by subtracting the reported Cost of Goods Sold from the reported Gross Sales. From their Gross Profits, Franchise Owners pay Proforma’s fees and pay all the business, wage, and debt service expenses associated with running their businesses, including any taxes.
- Franchise Owners are classified as Start-Up or RIE. A Start-Up Franchise Owner is a Franchise Owner entering Proforma’s franchise system without Relevant Industry Experience. A RIE Franchise Owner is a Franchise Owner entering Proforma’s franchise system with Relevant Industry Experience. RIE includes both Relevant Industry Experience and Conversion franchises.
Part 1 – Franchises with Gross Sales Greater Than $400,000 (236 Owners Representing 38% of the Franchised Businesses Reported in Item 19)
- In calendar year 2016, 236 Franchise Owners in the survey had sales greater than $400,000. These 236 Franchise Owners include 209 RIE Franchise Owners and 27 Start-Up Franchise Owners. This group represents 38% of the total number of Franchise Owners that were in operation for the entire calendar year of 2016 and reported in Item 19.
- The reported information does not include the results of 50 Franchise Owners whose affiliation with Proforma terminated during 2016, including 6 Start-Up Franchise Owners and 44 RIE Franchise Owners.
- The reported information does not include the results of 39 Franchise Owners whose affiliation with Proforma began during 2016, including 3 Start-Up Franchise Owners and 36 RIE Franchise Owners.