Digital Print Centers Put Allegra Network at Industry Forefront

Focus Not Just on Printing, But Being 'Communications Services' Provider

NORTHVILLE, MICH (Wednesday, July 28, 2004) - Allegra Network LLC, one of the world's largest printing franchises, is taking to heart the words of its principal shareholder, Domino's Pizza founder and former CEO Thomas S. Monaghan.

"Tom Monaghan says that only exciting goals are worthy goals," said Carl Gerhardt, Allegra Network's recently named president and COO. "And you see what he accomplished with Domino's."

Although Gerhardt assumed his new post in January and the company relocated its headquarters from Troy to Northville, Mich., in February, Allegra Network's newest endeavor is its most striking.

Already boasting more than 400 full-service and graphic communications centers offering both traditional and digital printing across North America and Japan, Allegra Network is introducing the Digital Print Center, a streamlined facility that specializes in digital document output, copying and graphic design, along with other business communications services. Digital Print Centers have no traditional printing presses and will operate under the Allegra Print & Imaging brand.

For small- to medium-size businesses - the core of Allegra Network's customer base - digital printing offers turnaround 50 to 70 percent faster than traditional printing and the ability to do smaller full-color, high-quality runs less expensively.

Digital printing also enables customers to personalize documents with an individual's name or specific message allowing, for example, targeted marketing campaigns to their clients. Many Digital Print Centers will also have mailing service capabilities, providing their customers with total print solutions.

"From concept to finish and even distribution, we're a communications services provider, not just a printer. Being able to market to individuals specifically is a growing need and growing demand," said Gerhardt, who succeeded William D. McIntyre as president after McIntyre was named the company's new chairman. "We work with companies as communications partners, offering creative solutions to their project needs."

The first prototype Digital Print Center opened in Indiana late in 2003 and a second opened in Ohio earlier this year. Both are co-owned with current franchisees. Sales have proven so strong that Allegra Network plans to open four to eight additional centers this year, most likely in the Midwest.

"Both centers have exceeded our goals in sales and operational performance," Gerhardt said. "In addition, results from focus group market research with both customers and prospects affirmed that 90 percent of our marketing and product positioning is right on target."

A nationwide rollout is planned for 2005. Allegra Network already has a solid support system in place, with 10 regional operations directors providing assistance to its franchisees, as well as its comprehensive marketing, technology, operational and profit mastery programs.

In addition to the communications solutions the Digital Print Center will provide to businesses, the concept presents a myriad of investment opportunties for potential franchisees. The Digital Print Centers can be operated by as few as two people, typically the owner, who manages the accounts, and a graphic designer. As sales increase, additional staff and equipment may be added to the center.

Although the investment to open a traditional Allegra Network printing center is only $256,000 to $358,500, the total investment to open a Digital Print Center is even less, at approximately $245,000. A major portion of the investment can be financed, thereby preserving the owner's cash for working captial.

The simplicity of the Digital Print Centers - no press to operate, just computers and copiers - makes it an easy business to own for entrepreneurs without printing experience. Digital Print Center investment opportunities are especially well-suited to those who are marketing driven, interested in utilizing the latest technology, seek the freedom of being their own boss, couples seeking dual incomes and those looking to own a second business.

"Allegra Network has a history of successful women business owners," commented Allegra Network Director of Marketing Janice Milhem. "Since we are a relationship-marketing company, franchisees with good business and people skills really excel. So many of our franchisees, women especially, are driving forces within their communities. Some have grown their businesses to more than $2 million in sales by building their brand through the contacts they have developed. Many have won awards and have been recognized within their business community for their contributions. Networking is key."

Industry figures support the growth in digital printing. According to the Xerox Corporation, in 2001 there were 16,000 full color (digital) production systems in use. By 2006, installations are expected to reach 38,000, an increase of 137 percent. The use of digital-based printing is projected to increase from 23 percent of all jobs in 2000 to 48 percent by 2020, according to Rochester Institute of Technology's School of Print Media.

"Digital Printing is a growing, aggressive segment," said Darryl Buchanan, Allegra Network's vice president of franchise development. "The simple operating strategy and minimal staffing requirements of the Digital Print Center allows entrepreneurs from various backgrounds to take advantage of this segment's numerous advantages."

Gerhardt also knows first-hand the potential of the printing industry. He and his wife, Judy, opened their franchise in Colorado Springs in 1985 and it grew to more than $2 million in annual sales within the Allegra Network.

"I came out of corporate America," said Gerhardt, "so I can tell you that this is a huge opportunity for baby boomers looking for their next career path."

The company's financial strength, stability, growth rate and size led to Allegra Network's recent ranking in Entrepreneur magazine's Franchise 500® (2003); ranked the best in its industry, Allegra Network was also ranked the 54th best franchise opportunity and the 20th fastest growing franchise. From 1995 through 2002, Allegra Network bought three franchised printing companies, the largest being Insty-Prints, Inc., with more than 200 locations.

Allegra Network's major focus for the past 10 years has been to support its existing franchisees through its more than 30 customized programs. One support program Allegra Network provides to its franchisees is its Acquisition Program. Over the last nine years, Allegra Network has assisted its franchisees in acquiring more than 140 established printing businesses through the program, adding more than $43 million in incremental sales. Franchisees who acquired competitors in 2003 grew at an average of 26 percent and retained 72 percent of their acquired sales.

As a result of the company's emphasis on digital technology and solid marketing, annual median store sales have increased from less than $350,000 in 1993 to more than $670,000 in 2003. Systemwide sales have increased from $156 million in 1993 to $270.6 million in 2003.

Gerhardt's goal is to double Allegra Network's system-wide sales within three to five years. It's a lofty goal, but then again, Allegra Network's largest shareholder probably wouldn't expect anything less based on what he was able to accomplish in his storied career.

In 1985 alone, with Tom Monaghan as CEO, Domino's Pizza opened 954 stores, making it the fastest-growing pizza company in the country at the time.

So, pizza and printing might have more in common than you think.

"Hopefully it says a lot in terms of the opportunity that is here," Gerhardt said of Monaghan's investment in the Allegra Network. "Tom has confidence in not only the marketplace, but confidence in the company and our management team. Otherwise, he would not have become involved."

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