Reference no: EM131147612

Case Study: Franchise Strategic Planning

As one of the world's largest graphic communications franchisors, Allegra Network LLC enjoys an enviable vantage point for spotting trends and opportunities in the print industry. "Our job at headquarters is to provide our franchise members with tools, processes, and outsourced services that increase their profits," says Tim Wood, vice president of technology for Allegra Network.

Founded in 1976 in Michigan, Allegra Network LLC has grown to support more than 600 locations in the United States, Canada, and Japan, and its sales rank in the top 200 among all franchises of any industry worldwide. The franchise includes six leading brands in its printing division—Allegra Print & Imaging, American Speedy Printing, Instant Copy, Insty-Prints, Speedy Printing, and Zippy Print—as well as the Signs Now brand in its signs division. Locations offer full-color printing, graphic design services and electronic publishing, digital color copying, high-speed copying, and online file transfer.

What sets Allegra Network apart is the company's extraordinary commitment to franchise training, technology implementation, and store profitability. Franchisees are attracted by the company's Profit Mastery Program, which includes advanced training; an annual benchmarking study for profitability called the Operating Ratio Study; and Performance Groups of about six franchise owners who act like a board of directors, advising each other on business directions and technology adoption.

But these important programs and commitments didn’t just happen. To counteract slowing growth in the print industry, Allegra headquarters aggressively began developing new services and more efficient processes to give its print franchises a competitive edge. One strategy was helping franchises offer more diverse services, both to differentiate themselves and to gain new sources of revenue. "We want to transform print craftsmen into effective marketers as well," says Wood.

To this end, Allegra headquarters began providing outsourced services that its franchises can offer to their customers. One is a web-based service that customers can use to order variable pieces such as business cards, letterhead, forms, brochures, and pocket folders. Headquarters uses software from Printable Technologies to create web-based design templates that can be customized online. Once customers have entered their data, the server instantly generates an Adobe Portable Document Format (PDF) file that they can proof and then submit online for printing. Allegra Network centers perform imposition in-house, and then deliver or ship the finished product to the customer.

"The advantage of online job submission is that the customer actually assists in the production process," says Wood. This workflow has at least three advantages: Allegra saves many hours by not having to type in the variable information, customers receive immediate proofs instead of having to wait based on the workload at the print center, and the print centers have nearly eliminated errors for these repetitive pieces. "Our previous error rate was 2 per 100 jobs," Wood says. "Use of Adobe PDF has reduced that by 98%, to 4 per 1,000 jobs." Practically eliminating reruns has enabled Allegra headquarters to offer the web-based job submission service to its stores for about 10% of the setup costs and 20% of the monthly fee of another leading e-commerce print provider.

QUESTIONS:

What inputs did Allegra management use to formulate their strategic plan?

What benefits did Allegra franchisee’s gain from the organizations strategic planning commitment?

Why do many small businesses fail to do strategic planning?

Does buying a franchise reduce the need for a small business to do strategic planning? If not, how does it change it?