In this FDD Talk post, you’ll learn the following:

• Section I – Background information on the AlphaGraphics franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for an AlphaGraphics franchise, based on Item 7 of the company’s 2018 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for an AlphaGraphics franchise, based on Items 5 and 6 of the company’s 2018 FDD

• Section IV – Number of franchised and company-owned AlphaGraphics outlets at the start of the year and the end of the year for 2015, 2016, and 2017, based on Item 20 of the company’s 2018 FDD

• Section V – Presentation and analysis of AlphaGraphics’ financial performance representations, based on Item 19 of the company’s 2018 FDD, including information on the:

• total gross sales for all AlphaGraphics business centers during the company’s last 3 calendar years (2015 to 2017)

• 2017 average and median gross sales for the 144 single-unit AlphaGraphics business centers in the U.S. that have been in operation for 1 year or more as of December 31, 2017

• 2017 average and median gross sales for the 42 multi-unit AlphaGraphics business centers in the U.S. that have been in operation for 1 year or more as of December 31, 2017

• 2017 median gross sales, gross margin, operating expenses (payroll, accounting and legal fees, advertising and marketing, auto operating expenses, building rent, royalties, lease and rental expenses – copier, office supplies, property and liability insurance, travel and entertainment, utilities, and all other overhead expenses), EBITDA, and other miscellaneous stats (depreciation, interest, cost percentages for different profit centers) for the 139 franchisees operating a U.S. AlphaGraphics business center at a single location for the full calendar year ended December 31, 2017 and that provided expense data

Section I – Background Information

16 Things You Need to Know About the AlphaGraphics Franchise

Acquired by MBE Worldwide to Expand U.S. Presence and Business Services Offerings

1.  In early October 2017, AlphaGraphics was acquired by MBE Worldwide, a global third-party logistics, printing, and communications services network with approximately 2,600 locations in 39 countries (including nearly 500 in the U.S.) following the acquisition. MBE specializes in third-party logistics, concentrating on shipping, micro- and related retail-logistics services.

2.  The acquisition of AlphaGraphics by MBE, which acquired the U.S.-based PostNet franchise system in April 2017, gives Mail Boxes Etc. an even stronger presence in the U.S. market and an expanded global services offering. AlphaGraphics will continue to operate as an independent company and will retain its current management team. The companies will also retain their individual names, business concepts, and brands.

3.  Gay Burke, executive chair of AlphaGraphics, said, “This is an exciting development for the AlphaGraphics franchise system. Combining forces with MBE Worldwide creates unique opportunities to synergize with colleagues similarly steeped in managing a franchise-based network of entrepreneurs.”

4.  Paolo Fiorelli, chairman and CEO of MBE, added, “AlphaGraphics is an excellent strategic fit for MBE because of its entrepreneur-driven, people-centric, customer-first business model, which complements our MBE business and culture. Also, AlphaGraphics has earned a reputation for technological and service excellence in the highly competitive print, marketing and communications industry in the U.S. We are excited to welcome AlphaGraphics to the MBE family and will work together to provide high-value solutions to our business and consumer customers across the globe.”

Moving Headquarters to Denver, Colorado

5.  At the beginning of March 2018, AlphaGraphics announced that it was moving its headquarters from Salt Lake City, Utah to downtown Denver, Colorado before the end of the year. At the time of the announcement, Ryan Farris, president and chief operating officer of AlphaGraphics, said, “We have made the strategic business decision to be in the Greater Denver Metro Area. We are reviewing specific location alternatives and expect to make a final decision shortly.”

6.  The AlphaGraphics network is currently supported by a seasoned team of nearly 50 full-time employees. In the move, the company will consolidate much of its finance, marketing, and network support service teams in the new location. AlphaGraphics considered several U.S. cities for the headquarters relocation.

7.  Paolo Fiorelli, chairman and CEO of MBE Worldwide, which acquired AlphaGraphics in October 2017, said, “The Denver area has excellent air transportation connections, a highly skilled labor force and other impressive characteristics to support the company’s growth plans.”

8.  Farris expanded on his earlier statement saying, “The Denver area is a great metropolitan market to attract and retain top talent to meet the company’s needs for the future. The area also has good transportation connections, a beautiful natural environment, a vibrant culture and a balanced emphasis on the quality of work and life. Colorado is certainly an exciting next chapter for the future of AlphaGraphics and only builds upon the tremendous growth, entrepreneurial owners, and excellent corporate talent that the Salt Lake area and State of Utah has provided.”

Holds Its Annual Conference and Technology Expo in Austin, Texas

9.  In early August 2018, AlphaGraphics held its annual industry leadership conference in Austin, Texas. More than 300 attendees representing AlphaGraphics centers across the United States and Brazil gathered at the Hyatt Regency to share best practices with their peers, and discuss their vision for the brand as the company adapts its offerings, processes, and culture to maintain its positioning as an industry leader as the landscape of printing and marketing continually evolves.

10.  Ryan Farris, president of AlphaGraphics, said, “In the brand’s 48th year in existence, we are leveraging experiences from owners, employees and customers to continue to drive the tremendous growth the network has seen in the first half of the year as we focus on meeting the needs of the customer of today and shape our plan of action to support the customer of tomorrow. This year’s theme of ‘Keep AG Wired’ resonates well with our brand and the connectivity that continually energizes the network’s efforts as we prepare to celebrate the brand’s success in our next 48 years of growth.”

11.  The start of 2018 has been especially successful for the AlphaGraphics brand and the four-day conference, held August 1st through 4th, featured interactive training sessions, themed networking opportunities, as well as subject-matter expert panel discussions on a range of topics including VDP mailing, automated multi-channel marketing campaigns, social media, Web-to-print technology, digital printing, and much more.

12.  In addition to providing learning opportunities for franchisees, also on the schedule at the conference was the AlphaGraphics Technology Expo featuring more than 65 vendors showcasing their latest printing and marketing technologies to franchisees.

Company History

13.  AlphaGraphics was founded in 1969 by entrepreneur Roger Ford in Tucson, Arizona. Ford wanted to create business centers that offered customers the latest visual communications technology. After successfully building the company’s operating systems into a successful and profitable business model, Ford began franchising the AlphaGraphics concept in 1979.

14.  In 1984, AlphaGraphics became the first desktop publishing retailer and by the end of the decade, AlphaGraphics began expanding internationally. AlphaGraphics became the first printing services franchise in the United States to open international locations.

15.  In 2001, AlphaGraphics was acquired by the Pindar Group and moved its headquarters to Salt Lake City, Utah. After the Pindar Group went bankrupt, AlphaGraphics was sold to Western Capital Resources Inc. in 2014. In late 2017, AlphaGraphics was sold once again, this time to MBE Worldwide, which plans to move AlphaGraphics’ headquarters to Denver, Colorado by the end of 2018.

Entrepreneur’s Franchise 500

16.  AlphaGraphics ranked No. 142 on Entrepreneur’s 2018 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of AlphaGraphics franchise costs, based on Item 7 of the company’s 2018 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

• Please click here for detailed information on AlphaGraphics’ initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2018 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2015

• Outlets at the Start of the Year:  242
• Outlets at the End of the Year:  254
• Net Change:  +12

2016

• Outlets at the Start of the Year:  254
• Outlets at the End of the Year:  256
• Net Change:  +2

2017

• Outlets at the Start of the Year:  256
• Outlets at the End of the Year:  256
• Net Change:  0

Company-Owned

2015

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2016

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2017

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

Section V – Financial Performance Representations (Item 19, 2018 FDD) and Analysis

Part 1 – Total Gross Sales for AlphaGraphics’ Three Most Recent Calendar Years for All U.S. Business Centers

• The table below shows the combined Gross Sales for all of AlphaGraphics’ U.S. Business Centers during the last three calendar years.