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 2021 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 2021 FDD

• Section IV – Number of franchised and company-owned Proforma outlets at the start of the year and the end of the year for 2018, 2019, and 2020, based on Item 20 of the company’s 2021 FDD

• Section V – Presentation and analysis of Proforma’s financial performance representations, based on Item 19 of the company’s 2021 FDD, including information on the:

• number of Proforma franchise owners in operation for the entire 2020 calendar year that had 2020 gross sales between $0 and $99,000, greater than $100,000, 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 2020 calendar year that had 2020 gross profit between $0 and $99,000, 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 2020 calendar year that had 2020 gross profit percentage between 0% and 34%, greater than 35%, greater than 40%, greater than 45%, greater than 50%, and greater than 55%, respectively

• 2020 average, high, and low order size for Proforma franchise owners during calendar year 2020

• number of Proforma franchise owners with 2020 gross 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 2020 gross sales of $2,000,000 or greater (Multi-Million Dollar Club Franchisees), and their average, high, and low gross sales

• 2020 average gross sales, gross profit, and gross profit percentage for start-up franchises (i.e. franchise owners entering the system without relevant industry experience)

• 2020 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

15 Things You Need to Know About the Proforma Franchise

24 Franchisees Named to Prestigious Inc. 5000 Rankings

1.  In mid-August 2021, 24 affiliate owners of Proforma, the $500-million industry leader in technology and business success, were named to the most prestigious ranking for the fastest-growing private businesses. For over 30 years, Proforma has continued to hold the greatest presence of all distributor groups on the Inc. 5000 in the promotional products, printing industry, and ecommerce industry.

2.  The Inc. 5000, ranked according to percentage revenue growth over a three-year period, has recognized these affiliates for receiving growth up to 4,681%. Over 70 Proforma owners have been recognized on the Inc. 5000 list in the past 5 years alone. Six owners featured on the 2020 list have received consecutive recognition from Inc. magazine for their sustained business growth.

3.  Vera Muzzillo, CEO of Proforma, said, “We are very proud that Proforma was once again recognized for the consistently remarkable growth our Owners have achieved in recent years. The fact that Proforma continues to be the only distributor organization with this level of Affiliate Owners represented on the Inc. 5000 is a testament that Proforma is truly the industry’s technology and business success leader.”

4.  “We could not have achieved our Inc. 5000 success without Proforma,” said Anita Shina and Jim Hanika, 5 Million Dollar Club members and owners of Proforma Amplified. “Proforma’s support, resources and dedication were the keys to our success. It is an honor to be part of the Proforma family!”

5.  The following were the Proforma franchisees recognized on the 2021 list, in order of ranking:

• Anita Shina and Jim Hanika, owners of Proforma Amplified, ranked No. 83 with 4,681% growth;
• Michele Adams, owner of Proforma Global Sourcing, ranked No. 255 with 1,800% growth;
• Joe and Tracy Troy, owners of Waterfront Promotional Merchandising, ranked No. 1,218 with 396% growth;
• Kim and Pat Shaffer, owners of Commonwealth Graphics, powered by Proforma, ranked No. 1,638 with 282% growth;
• Deborah Lanigan, owner of Debar Hospitality, Proforma Mega Marketing Solutions, ranked No. 1,854 with 244% growth;
• Russ and Tammy Howarth, owners of Proforma Think Ink, ranked No. 1,855 with 244% growth;
• Mike and Amy Anderman, owners of Proforma 123, ranked No. 1,916 with 233% growth;
• Fred Greco, owner of Greco Promotions, ranked No. 2,874 with 136% growth;
• Mike Durkee, owner of Proforma Durkee, ranked No. 2,951 with 131% growth;
• Mike Lazzari, owner of BrandCentric Solutions, powered by Proforma, ranked No. 3,330 with 107% growth;
• Rick Minten, owner of Proforma Bay Business Resources, ranked No. 3,331 with 107% growth;
• Tony Pupo, owner of Logo Print & Promo, ranked No. 3,587 with 95% growth;
• Steve and Donna Raucher, owners of Proforma GPS Global Promotional Sourcing, ranked No. 3,694 with 90% growth;
• Scott and Katherine Morris, owners of Fusion 1, powered by Proforma, ranked No. 4,752 with 49% growth; and
• Kevin Dovel and Don Titka, owners of Proforma Promographix, ranked No. 4,900 with 43% growth.

6.  To be eligible for the 2021 Inc. 5000, businesses must have met certain criteria, including being privately-owned, for-profit, based in the United States, and generating at least $100,000 in 2017 and $2 million in 2020. More than 26 Proforma businesses reached the growth qualifications to apply in 2021.

Holds Largest Million Dollar Club Event in Company History

7.  Proforma reported that it was onsite October 19th, 2021 at the lovely Fairmont Scottsdale Princess in Scottsdale, Arizona to begin preparation for Proforma’s largest Million and Multi-Million Dollar Club celebration in the company’s history. “Nowhere else will you see this concentration of the top producing promotional and print product Owner distributors in the world,” stated Billie Jo Mathusek, Proforma’s chief marketing officer. “Every sales tool, marketing campaign, business development program and support service that Proforma offers is strategically developed to turn million dollar dreams into reality.”

8.  More than 150 members of the Million and Multi-Million Dollar Club gathered together and celebrated tremendous success over the past two years. Proforma’s investment in airplanes and new supplier channels during COVID-19 led to unprecedented growth for the owners and the company as a whole.

9.  According to Vera Muzzillo, CEO of Proforma and a member of ASI’s Power 50, a ranking of the most influential people in promo, “This record number of new members driving Proforma’s overall increased sales in 2021 proves that Proforma is truly the industry’s technology and business success leader. The investment in our $15 million business management system, ProVision, coupled with our ongoing commitment to growth in ecommerce will continue to drive our long term objectives for Proforma. We are passionate about the success of our owners, and we look forward to celebrating all of their hard work and accomplishments in Arizona.”

Reports a Record $60 Million Plus in December Sales

10.  In late January 2022, Proforma reported that it had set a new monthly sales record of $60 million in December 2021. This achievement wouldn’t have been possible without the company’s $20 million investment in business technology leading to more than 5,000 eCommerce stores opened last year. Proforma is confident that its ProStore development and the newly released eCommerce educational program were key contributors to 2021 growth. The company looks forward to continue driving owners to their next level of success through 2022.

11.  Proforma CEO Vera Muzillo said, “This new sales record validates our standing as a top player in the industry. In 2022, we plan to double our eCommerce presence resulting in a total of 10,000 sites built by the end of the year.”

Company History

12.  Proforma was founded in 1978 by Greg Muzillo with a college friend. Muzillo and his friend wanted to offer printing services, promotional materials, documents, forms, and other essential services to medium-sized businesses and large corporations. Their business was an instant success; after starting out with $200, sales grew to $250,000 by the end of the first year. By 1982, sales reached $1 million and Muzillo started franchising in 1986.

13.  Over the next few years, Proforma continued to grow around the United States, and the brand opened its first international office in Canada in 1991. During the rest of the decade, Proforma expanded its offerings and updated its services to meet its clients’ growing needs.

14.  In 2001, Vera Muzillo, Greg Muzillo’s wife, joined the company. A decade later, Vera Muzillo was appointed CEO of Proforma as Greg Muzillo stepped down from running day-to-day activities. Today, there are Proforma franchises across North America.

Entrepreneur’s Franchise 500

15.  Proforma did not rank on Entrepreneur’s 2022 Franchise 500 list.

Section II – Estimated Costs

• Detailed estimates of Proforma franchise costs, based on Item 7 of the company’s 2021 FDD.

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

• 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 2021 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2018

• Outlets at the Start of the Year:  641
• Outlets at the End of the Year:  638
• Net Change:  -3

2019

• Outlets at the Start of the Year:  638
• Outlets at the End of the Year:  627
• Net Change:  -11

2020

• Outlets at the Start of the Year:  627
• Outlets at the End of the Year:  601
• Net Change:  -26

Company-Owned

2018

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

2019

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

2020

• 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, 2021 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, 2020.

• 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, 2020.

• 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 2020, the time period of the financial performance representations made herein, there existed no company- or affiliate-owned outlets, and 601 total franchised outlets.

• Results from Franchise Owners who either began (20) or terminated (46) their franchise relationship with Proforma during 2020 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 (234 Owners Representing 40% of the Franchised Businesses Reported in Item 19)

• In calendar year 2020, 234 Franchise Owners in the survey had sales greater than $400,000. These 234 Franchise Owners include 216 RIE Franchise Owners and 18 Start-Up Franchise Owners. This group represents 40% of the total number of Franchise Owners that were in operation for the entire calendar year of 2020 and reported in Item 19.

• The reported information does not include the results of 46 Franchise Owners whose affiliation with Proforma terminated during 2020, including 4 Start-Up Franchise Owners and 42 RIE Franchise Owners.

• The reported information does not include the results of 20 Franchise Owners whose affiliation with Proforma began during 2020, including 0 Start-Up Franchise Owners and 20 RIE Franchise Owners.

Total

• Sales Between $0 and $99,000:  131
• Sales Greater Than $100,000:  452
• Sales Greater Than $400,000:  234
• Sales Greater Than $1 Million:  119
• Sales Greater Than $2 Million:  45
• Sales Greater Than $5 Million:  17
• Sales Greater Than $10 Million:  6

Start-Up

• Sales Between $0 and $99,000:  18
• Sales Greater Than $100,000:  39
• Sales Greater Than $400,000:  18
• Sales Greater Than $1 Million:  10
• Sales Greater Than $2 Million:  4
• Sales Greater Than $5 Million:  1
• Sales Greater Than $10 Million:  –

RIE

• Sales Between $0 and $99,000:  113
• Sales Greater Than $100,000:  413
• Sales Greater Than $400,000:  216
• Sales Greater Than $1 Million:  109
• Sales Greater Than $2 Million:  41
• Sales Greater Than $5 Million:  16
• Sales Greater Than $10 Million:  6

Part 2 – Franchises with Gross Profit Greater Than $100,000 (274 Owners Representing 50% of the Franchised Businesses Reported in Item 19)

• In calendar year 2020, 274 Franchise Owners in the survey had Gross Profit greater than $100,000. These 274 Franchise Owners include 254 RIE Franchise Owners and 20 Start-Up Franchise Owners. This group represents 50% of the total number of Franchise Owners that were in operation for the entire calendar year of 2020 and reported in Item 19.

• The reported information does not include the results of 46 Franchise Owners whose affiliation with Proforma terminated during 2020, including 4 Start-Up Franchise Owners and 42 RIE Franchise Owners.

• The reported information does not include the results of 20 Franchise Owners whose affiliation with Proforma began during 2020, including 0 Start-Up Franchise Owners and 20 RIE Franchise Owners.

Total

• Gross Profit Between $0 and $99,000:  277
• Gross Profit Greater Than $100,000:  274
• Gross Profit Greater Than $250,000:  158
• Gross Profit Greater Than $500,000:  75
• Gross Profit Greater Than $750,000:  36
• Gross Profit Greater Than $1 Million:  26

Start-Up

• Gross Profit Between $0 and $99,000:  34
• Gross Profit Greater Than $100,000:  20
• Gross Profit Greater Than $250,000:  14
• Gross Profit Greater Than $500,000:  6
• Gross Profit Greater Than $750,000:  4
• Gross Profit Greater Than $1 Million:  2

RIE

• Gross Profit Between $0 and $99,000:  243
• Gross Profit Greater Than $100,000:  254
• Gross Profit Greater Than $250,000:  144
• Gross Profit Greater Than $500,000:  69
• Gross Profit Greater Than $750,000:  32
• Gross Profit Greater Than $1 Million:  24

Part 3 – Franchises with Gross Profit Greater Than 35% (345 Owners Representing 63% of the Franchised Businesses Reported in Item 19)

• In calendar year 2020, 345 Franchise Owners in the survey had Gross Profit greater than 35%. These 345 Franchise Owners include 312 RIE Franchise Owners and 33 Start-Up Franchise Owners. This group represents 63% of the total number of Franchise Owners that were in operation for the entire calendar year of 2020 and reported in Item 19.

• The reported information does not include the results of 46 Franchise Owners whose affiliation with Proforma terminated during 2020, including 4 Start-Up Franchise Owners and 42 RIE Franchise Owners.

• The reported information does not include the results of 20 Franchise Owners whose affiliation with Proforma began during 2020, including 0 Start-Up Franchise Owners and 20 RIE Franchise Owners.

Total

• Gross Profit Between 0% and 34%:  206
• Gross Profit Greater Than 35%:  345
• Gross Profit Greater Than 40%:  173
• Gross Profit Greater Than 45%:  74
• Gross Profit Greater Than 50%:  24
• Gross Profit Greater Than 55%:  8

Start-Up

• Gross Profit Between 0% and 34%:  21
• Gross Profit Greater Than 35%:  33
• Gross Profit Greater Than 40%:  11
• Gross Profit Greater Than 45%:  4
• Gross Profit Greater Than 50%:  –
• Gross Profit Greater Than 55%:  –

RIE

• Gross Profit Between 0% and 34%:  185
• Gross Profit Greater Than 35%:  312
• Gross Profit Greater Than 40%:  162
• Gross Profit Greater Than 45%:  70
• Gross Profit Greater Than 50%:  24
• Gross Profit Greater Than 55%:  8

Part 4 – Average Order Size by Franchise Owner (583 Franchise Owners)

• The Average (mean) Order Size by Franchise Owners during calendar year 2020 was $1,179. The Average Order Size for a Start-Up Franchise Owner was $1,056. The Average Order Size for an RIE Franchise Owner was $1,189.

• The reported information does not include the results of 46 Franchise Owners whose affiliation with Proforma terminated during 2020, including 4 Start-Up Franchise Owners and 42 RIE Franchise Owners.

• The reported information does not include the results of 20 Franchise Owners whose affiliation with Proforma began during 2020, including 0 Start-Up Franchise Owners and 20 RIE Franchise Owners.

Total

• Number of Owners Reported:  583
• Average Order Size:  $1,179
• Median Order Size:  $993
• Owners Exceeding Average:  227
• Percentage Exceeding Average:  38.94%
• Range:  $26 to $135,896
• Lowest Single Order:  $0
• Highest Single Order:  $135,896

Start-Up

• Number of Owners Reported:  57
• Average Order Size:  $1,056
• Median Order Size:  $930
• Owners Exceeding Average:  25
• Percentage Exceeding Average:  43.86%
• Range:  $243 to $3,959
• Lowest Single Order:  $0
• Highest Single Order:  $3,959

RIE

• Number of Owners Reported:  526
• Average Order Size:  $1,189
• Median Order Size:  $996
• Owners Exceeding Average:  202
• Percentage Exceeding Average:  38.40%
• Range:  $26 to $135,896
• Lowest Single Order:  $0
• Highest Single Order:  $135,896

Part 5 – Million Dollar Club Franchises (Sales Over $1,000,000 Through $1,999,999) (74 Franchise Owners Representing 13% of the Franchised Businesses Reported in Item 19)

• The Average (mean) Gross Sales for the 74 Million Dollar Club Franchise Owners during calendar year 2020 was $1,408,498.

• These 74 Franchise Owners comprising the Million Dollar Club include 68 RIE Franchise Owners and 6 Start-Up Franchise Owners that reached over $1,000,000 through $1,999,999 in annual gross sales during the calendar year 2020.

• This group represents 13% of the total number of Franchise Owners that were in operation for the entire calendar year of 2020 and reported in Item 19.

• Average Gross Sales:  $1,408,498
• Median Gross Sales:  $1,369,169
• Number and Percentage Meeting or Exceeding Average:  33/45%
• Range of Gross Sales Reported:  $1,003,151 to $1,959,514

Top 25

• Range of Gross Sales:  $1,559,596 to $1,959,514
• Average Gross Sales:  $1,738,898
• Median Gross Sales:  $1,726,887

Middle 24

• Range of Gross Sales:  $1,266,134 to $1,499,142
• Average Gross Sales:  $1,369,227
• Median Gross Sales:  $1,369,169

Bottom 25

• Range of Gross Sales:  $1,003,151 to $1,240,041
• Average Gross Sales:  $1,115,799
• Median Gross Sales:  $1,101,411

Part 6 – Multi-Million Dollar Club Franchises (Sales of $2,000,000 or Greater) (45 Franchise Owners Representing 8% of the Franchised Businesses Reported in Item 19)

• The Average (mean) Gross Sales for the 48 Multi-Million Dollar Club Franchise Owners during calendar year 2020 was $5,864,611.

• These 45 Franchise Owners comprising the Multi-Million Dollar Club include 41 RIE Franchise Owners and 4 Start-Up Franchise Owners that reached $2,000,000 or more in annual gross sales during the calendar year 2020.

• This group represents 8% of the total number of Franchise Owners that were in operation for the entire calendar year of 2020 and reported in Item 19.

• Average Gross Sales:  $5,864,611
• Median Gross Sales:  $3,712,771
• Number and Percentage Meeting or Exceeding Average:  11/24%
• Range of Gross Sales Reported:  $2,004,930 to $38,813,345

Top 15

• Range of Gross Sales:  $5,251,468 to $38,813,345
• Average Gross Sales:  $11,575,567
• Median Gross Sales:  $7,261,492

Middle 15

• Range of Gross Sales:  $2,820,700 to $5,182,702
• Average Gross Sales:  $3,807,630
• Median Gross Sales:  $3,712,771

Bottom 15

• Range of Gross Sales:  $2,004,930 to $2,652,335
• Average Gross Sales:  $2,210,636
• Median Gross Sales:  $2,110,677

Part 7 – Non-Million Dollar Club Franchises (Sales Less Than $1,000,000) (464 Franchise Owners Representing 79% of the Franchised Businesses Reported in Item 19)

• The Average (mean) Gross Sales for the 464 Non-Million Dollar Club Franchise Owners during calendar year 2020 was $273,616.

• These 464 Franchise Owners include 417 RIE Franchise Owners and 47 Start-Up Franchise Owners that reached less than $1,000,000 in annual gross sales during the calendar year 2020.

• This group represents 79% of the total number of Franchise Owners that were in operation for the entire calendar year of 2020 and reported in Item 19.

• Average Gross Sales:  $273,616
• Median Gross Sales:  $196,716
• Number and Percentage Meeting or Exceeding Average:  166/36%
• Range of Gross Sales Reported:  $120 to $997,640

Top 155

• Range of Gross Sales:  $290,904 to $997,640
• Average Gross Sales:  $561,670
• Median Gross Sales:  $537,692

Middle 154

• Range of Gross Sales:  $124,234 to $290,459
• Average Gross Sales:  $198,259
• Median Gross Sales:  $196,716

Bottom 155

• Range of Gross Sales:  $120 to $121,343
• Average Gross Sales:  $60,432
• Median Gross Sales:  $63,120

Part 8 – Start-Up Franchises (Franchise Owners Entering the System Without Relevant Industry Experience)

• The Average (mean) Gross Sales for Start-Up Franchise Owners during calendar year 2020 was $608,338. This includes 54 Start-Up Franchise Owners who were eligible for inclusion in this report.

• The reported information does not include the results of 4 Start-Up Franchise Owners whose affiliation with Proforma terminated during 2020.

Start-Up Franchises

• Average Gross Sales:  $608,338
• Average Gross Profit:  $208,746
• Average Gross Profit Percentage:  34.3%

Top 18

• Average Gross Sales:  $1,556,939
• Average Gross Profit:  $530,793
• Average Gross Profit Percentage:  34.9%

Middle 18

• Average Gross Sales:  $212,944
• Average Gross Profit:  $75,551
• Average Gross Profit Percentage:  35.6%

Bottom 18

• Average Gross Sales:  $55,132
• Average Gross Profit:  $19,895
• Average Gross Profit Percentage:  37.1%

Part 9 – RIE Franchises (Franchise Owners Entering the System with Relevant Industry Experience)

• The Average (mean) Gross Sales for RIE Franchise Owners during calendar year 2020 was $783,680. This includes 497 RIE Franchise Owners who were eligible for inclusion in this report.

• The reported information does not include the results of 42 RIE Franchise Owners whose affiliation with Proforma terminated during 2020. The reported information does not include the results of 20 RIE Franchise Owners whose affiliation with Proforma began during 2020.

RIE Franchises

• Average Gross Sales:  $783,680
• Average Gross Profit:  $272,424
• Average Gross Profit Percentage:  34.8%

Top 166

• Average Gross Sales:  $1,951,461
• Average Gross Profit:  $668,259
• Average Gross Profit Percentage:  35.7%

Middle 166

• Average Gross Sales:  $308,755
• Average Gross Profit:  $114,302
• Average Gross Profit Percentage:  36.9%

Bottom 165

• Average Gross Sales:  $86,624
• Average Gross Profit:  $33,271
• Average Gross Profit Percentage:  39.1%

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