Cleveland company offers free franchise opportunity
Proforma, a print and promotional products company in Cleveland, wants to give away a franchise valued at $20,000 to a qualified business person in the Grand Rapids area. Proforma founder and co-CEO Greg Muzzillo says his company is just trying to do its part to spur a little economic growth here.
“Our company grew last year even though most businesses didn’t,” Muzzillo said.
“We just feel that if every business that was doing well each did a little bit to help turn this economy around, we’d all be better off. Businesses can help turn it around one company at a time and one person at a time. We just want to lead by example.”
Proforma offers custom promotional products, custom business forms, commercial print and other graphic communications solutions for businesses. The company has a $250 million dollar network of more than 650 franchise owners in North America that serve more than 50,000 clients. This is the first franchise the company is giving away and its in response to the economic downturn, Muzzillo said. He has sold the franchises for $19,5000 to $49,000 in the past.
The franchise consists of training, computer software and access to a $30 million line of credit a franchise owner needs to deal with Proforma’s manufacturers, Muzzillo said. He said any of the company’s 650 franchise owners can tap that line of credit, as well as credit with Proforma’s suppliers.
“It’s really a connection to our system, our training, our tools and resources that get people in the business. Our franchise owners don’t own printing equipment. Our model is to be a broker distributor, and, basically, our people need a lot of open lines of credit to get out and go sell and grow a business.”
Credit for franchise members is based upon orders in process and on sales. Muzzillo said there is no annual franchise fee. Rather, ongoing fees are based on a percentage of sales.
Businesses spend about $1,000 a year on printing for every white-collar employee they have, including direct mail, catalogues, price sheets, purchase orders, invoices, business cards, letterheads and envelopes, Muzzillo said. Proforma also sells promotional products such as hats, pins, mugs and T-shirts.
“According to our market intelligence, businesses in the Grand Rapids area last year spent more than about $300 million on printing and promotional products, so that’s a huge market,” he observed.
“Some industry associations are projecting that business spending this year may be off 3 to 5 percent. Even if business is off 3 to 5 percent, it’s still a $290 million to $295 million marketplace in Grand Rapids, and a very big opportunity for the right person.”
Jeanne Englehart, president of the Grand Rapids Area Chamber of Commerce, said she would approach the offer with a “healthy dose of skepticism.” She said it’s an unusual offer and wondered aloud why someone hasn’t already started a Proforma franchise here if the market in Grand Rapids is so great for it. But she did say that having an access to a $30 million line of credit alone is “very valuable.”
A lot of chamber members are starting businesses now because they are laid off or out of work for some reason, Englehart said. A lot of them want to stay in West Michigan because they love this community, so they are taking a chance and starting a business, whether it’s home-based or a franchise.
“What he’s saying is consistent with what we’re hearing from folks who are out of work,” she said. “One of the questions I would have is, who’s already doing this kind of work in this community and how is it going to impact their business? We welcome any business to Grand Rapids; we just also want to make sure that we support the businesses that are already here, as well.”
Muzzillo said it’s an ideal opportunity for a business development professional or a business sales professional who has been let go and is struggling to find the right job. A Proforma franchise owner calls on businesses and presents them with a Proforma catalogue of products. The franchise owner then places the order with one of Proforma’s nearly 1,000 suppliers in North America that do the actual printing of the business forms and promotional items, Muzzillo explained.
“Grand Rapids is a market that we like,” he said. “In cities with populations of between 100,000 and 250,000, the competition is less keen, which means the profits are higher,” Muzzillo noted. “The chances of success in a market the size of Grand Rapids is very high.”
Muzzillo said the right candidate has to have the skill set of a sales manager or salesman in the business-to business environment and must be able to show that he or she has the resources and contacts to be successful in the Grand Rapids market.
“Most businesses buy printing and promotional products not from a little retail quick-print shop, but from salespeople that call on them at their location,” Muzzillo noted. “In North America, only about 5 percent of printing and promotional products are ordered through a little quick-print shop.”
“Our product mix is excellent: In good times and bad, businesses need what we sell, and some businesses in bad times order even more because they know they have to promote harder and go get new customers,” Muzzillo said.
Proforma has franchises in Portage, Bloomfield Hills, Gross Pointe Farms, Traverse City and Fenton, among other cities in Michigan.
Muzzillo said anyone interested in the free franchise can contact the company.