In this FDD Talk 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 2019 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 2019 FDD
- Section IV – Number of franchised and company-owned Proforma outlets at the start of the year and the end of the year for 2016, 2017, and 2018, based on Item 20 of the company’s 2019 FDD
- Section V – Presentation and analysis of Proforma’s financial performance representations, based on Item 19 of the company’s 2019 FDD, including information on the:
- number of Proforma franchise owners in operation for the entire 2018 calendar year that had 2018 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 2018 calendar year that had 2018 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 2018 calendar year that had 2018 gross profit greater than 35%, greater than 40%, greater than 45%, greater than 50%, and greater than 55%, respectively
- 2018 average, high, and low order size for Proforma franchise owners during calendar year 2018
- number of Proforma franchise owners with 2018 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 2018 sales of $2,000,000 or greater (Multi-Million Dollar Club Franchisees), and their average, high, and low gross sales
- 2018 average gross sales, gross profit, and gross profit percentage for start-up franchises (i.e. franchise owners entering the system without relevant industry experience)
- 2018 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
20 Things You Need to Know About the Proforma Franchise
Announces Record-Breaking Million Dollar Club Membership
1. Near the end of January 2019, Proforma announced that it had another record-breaking year for its exclusive Million Dollar Club with a total of 126 franchises achieving million or multi-million dollar success in 2018.
2. Last year’s members include 17 first-time Million Dollar Club franchise owners, eight first-time Multi-Million Dollar Club franchise owners, and two first-time 5 Million Dollar Club franchise owners. Proforma’s Million Dollar Club sales range from $1 million to $35 million with members earning additional recognition for $5 million, $10 million, and $25 million in sales.
3. Greg Muzzillo, founder of Proforma, said, “Proforma’s record-breaking Million Dollar Club is a testament to our mission of helping our Owners’ dreams come true so they can live their best life. Every sales tool, marketing campaign, business development program and support service that Proforma offers is designed to help our Owners achieve their business goals. We couldn’t be more proud of this hard-working group of dedicated Owners who have put their resource to work to reach Million Dollar Club status.”
4. During the 2018 Million Dollar Club celebration, which took place at Terrane Oceanfront Resort in California from April 4-7, 2019, Proforma welcomed a total of 77 franchises to the Million Dollar Club, 40 franchises to the Multi-Million Dollar Club, four franchises to the 5 Million Dollar Club, four franchises to the 10 Million Dollar Club, and one franchise to the 25 Million Dollar Club.
5. According to Deborah Lanigan, owner of Proforma Mega Marketing Solutions, “Reaching million-dollar status and being recognized as part of Proforma’s Million Dollar Club is an amazing milestone for me and my business. With the help and support of the Proforma network, I have been able to reach my professional business goals, while providing first-class marketing solutions and support to my amazing clients. I love what I do and I’m proud to be a first-time Million Dollar Club member and part of the Proforma Family.”
Appoints New Vice President of Strategic Partner Development
6. In late February 2019, Proforma announced the promotion of Michele Cardello to vice president of strategic partner development, effective immediately. In her new role, Cardello will continue to establish and lead Proforma’s efforts to develop and implement innovative programs in order to build the strongest and most prestigious partner network in the industry. Utilizing her expertise as a global supply chain expert, Cardello will continue to expand Proforma’s presence overseas in both new and existing categories.
7. Greg Muzillo, founder of Proforma, said, “It is with great pleasure that we announce the well-deserved promotion of Michele Cardello to Vice President of Strategic Partner Development. We are confident Michele will continue to provide the leadership and direction needed to support our valuable partner relationships. Michele’s experience and dedication has been instrumental in expanding our supplier partnerships throughout North America. To date, her efforts have helped Proforma expand our global presence as she continues to build our supply chain overseas.”
8. Joining Proforma in 2014 as the manager of meetings and events in vendor development, Cardello was quickly promoted to director of strategic partner development in 2015. Traveling between the Cleveland and Tampa Support Centers, Cardello has continuously worked side-by-side with Proforma leadership, owners, and supplier partners to collaborate on unique and innovative projects such as ProVision2, Proforma’s new business management technology platform.
9. According to Cardello, “I am honored to be a part of the strategy team of this incredible organization and a member of the Proforma Family. I look forward to continuing to work alongside my colleagues, our Owners and Supplier Partners as we embark upon a momentous time in our organization’s storied history. Greg and Vera Muzzillo’s leadership and continued support has allowed me to grow and build upon our preferred partner network while working on new and innovative projects to benefit Proforma’s Owners and key Supplier Partners.”
Celebrates 1,000 Users on New Business Management System
10. In mid-June 2019, the Proforma senior leadership team met with the Proforma Owner Advisory Council (OAC) Technology Committee to celebrate exceeding 1,000 users on the company’s new ProVision Business Management System. Proforma’s OAC consists of peer-elected Proforma members from across North America.
11. Proforma has invested over $10 million dollars developing its new proprietary system, gaining the reputation as the most influential technology organization in the print and promotional products industry. Proforma employs over 75 technology professionals to power its advanced technology. Proforma continues to invest heavily in the technology and innovation of ProVision, creating efficiency and profitability for its members.
12. Proforma, the second-largest printing and promotional products distributor in North America, has announced that its ProVision system currently includes more than 1,000 users. As ProVision is in its pre-release stage, this is an extraordinary milestone that is sure to propel further excitement and interest in the organization leading up to its full release on November 11, 2019.
13. Mike Tracy, co-owner of Proforma Brand Proformance and member of Proforma’s OAC Technology Committee, said, “ProVision provides the most efficient order entry and back office process functionality possible. We have dynamically grown our sales and profits this year without growing our administrative burden as a result of utilizing the ProVision system.”
14. Vera Muzzillo, CEO of Proforma, added, “ProVision is the most powerful business management system in the market. We have exposed the platform to numerous distributors over the past several months, and the majority of them have committed to join Proforma because of our technology expertise. We are very appreciative of the support and advice of our OAC Technology Committee for their hard work in helping us every step of the way.”
15. According to Proforma OAC Technology Committee member Rhonda Reedy of Barefoot
Swag, Powered by Proforma, “As a member of the Owner Advisory Council Technology Committee, I was fortunate to tour Proforma’s technology innovation lab and meet many of the technology professionals who work tirelessly to bring this unprecedented level of technology to our industry. I’ve been in the industry for many years and have experienced several technology systems, and I can easily say that Proforma has developed the best in the industry.”
16. Proforma was founded in 1978 by Greg Muzillo with a college friend. Muzillo and his business partner started the company with only $200 and decided to provide medium-sized businesses and large corporations with business documents, forms, promotional products, printing, and other services. Within a year, Proforma’s sales grew to $250,000 and the client list expanded to 300.
17. By 1982, sales reached $1 million and a few years later, Muzillo developed the Proforma franchise model. The company’s franchise model consists of a network of independent distributors working together to build marketing clout and strong supplier relationships.
18. Over the next few years, Proforma continued to grow around the United States and the first international franchise opened in 1991 in Canada. By the start of the early 2000s, Proforma grew to 500 offices.
19. In 2001, Vera Muzillo, Greg Muzillo’s wife, joined the company and she was appointed CEO in 2009. Vera Muzillo remains as CEO of Proforma, while Greg Muzillo has stepped down from day-to-day activities, but is still involved with the company’s leadership.
Entrepreneur’s Franchise 500
20. Proforma ranked No. 373 on Entrepreneur’s 2020 Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of Proforma franchise costs, based on Item 7 of the company’s 2019 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 2019 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
- Outlets at the Start of the Year: 676
- Outlets at the End of the Year: 666
- Net Change: -10
- Outlets at the Start of the Year: 666
- Outlets at the End of the Year: 641
- Net Change: -25
- Outlets at the Start of the Year: 641
- Outlets at the End of the Year: 638
- Net Change: -3
- Outlets at the Start of the Year: 1
- Outlets at the End of the Year: 0
- Net Change: -1
- Outlets at the Start of the Year: 0
- Outlets at the End of the Year: 0
- Net Change: 0
- 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, 2019 FDD) and Analysis
- To help you evaluate this franchise opportunity, Proforma has compiled certain actual historic Gross Sales, Gross Profit, and Average Order Size information for the calendar year ending December 31, 2018.
- Proforma has compiled the information for each franchise classification based upon information Franchise Owners have reported through its system for the calendar year ending December 31, 2018. 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. During 2018, the time period of the financial performance representations made herein, there existed no company- or affiliate-owned outlets, and 638 total franchised outlets.
- Results from Franchise Owners who either began (26) or terminated (29) their franchise relationship with Proforma during 2018 are not included in the financial performance representations provided herein.
- 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 (250 Owners Representing 42% of the Franchised Businesses Reported in Item 19)
- In calendar year 2018, 250 Franchise Owners in the survey had sales greater than $400,000. These 250 Franchise Owners include 223 RIE Franchise Owners and 27 Start-Up Franchise Owners. This group represents 42% of the total number of Franchise Owners that were in operation for the entire calendar year of 2018 and reported in Item 19.
- The reported information does not include the results of 29 Franchise Owners whose affiliation with Proforma terminated during 2018, including 4 Start-Up Franchise Owners and 25 RIE Franchise Owners.
- The reported information does not include the results of 26 Franchise Owners whose affiliation with Proforma began during 2018, including 0 Start-Up Franchise Owners and 26 RIE Franchise Owners.