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I am hearing strange stirrings at quick-print chain Alphagraphics. The U.K. holding company of Salt Lake City-based Alphagraphics is beyond bankruptcy. They are actually in receivership.The family company, Pindar, which as I recall is over a century and a half years old, currently owes over $27 million in pension to its workers.
But here is the really unusual thing: As Pindar liquidates, rumor has it that a few Alphagraphics franchisees are trying to buy out the U.S. franchising company.
The question is what form of franchisee takeover will this be? Using the model of selling franchises and collecting royalties to support franchise operations through hired professionals, Alphagraphics is in the business of franchising. It has no company-owned quick print shops in the United States. In managing the franchise chain, it uses a traditional top-down corporate model.
That creates blind spots.
Several years ago, a franchisee in the United Kingdom, Andrew Pindar, became the chain's new benign king and chairman. He soon replaced the old CEO, an MBA from the commercial printing giant R.R. Donnelly & Sons, with its current chief minister Kevin Cushing, a large Alphagraphics franchisee from the Midwest. Both the chairman and the CEO brought considerable quick printing know-how to the kingdom. They focused keenly on the basics of the quick-print business.
In this bird's opinion, the quick printing execution of the brand's two-hundred plus shops are second to none in the mature, shrinking quick print store segment of the franchise world.
Will this new takeover attempt result in an autocracy, where one franchisee calls the shots? Or will it be a franchise oligarchy, in which a few of the largest and most powerful franchisees protect their own interests by becoming franchisor?
Consider this: Franchisees who are under the Alphagraphics flag pay
taxes royalties to the king. They have yet to stop the power of the king by requiring him to sign a Magna Carta, a collective agreement that would provide fundamental rights of franchise renewal and protection from encroachment by the crown. These lords and barons, that is to say business and property owners, do not have an elected association or parliament. There is no governance structure to look out solely and independently for their interests and liberties. There is only the franchise advisory board, selected by the king. On good days, its board members are listened to so that the monarch can hear what his subjects want. In short, rudimentary governance structures have yet to develop in the chain in which a republic can later emerge. For now, there will be no republic that satisfies the demands and needs of the general population of business owners that hoist the Alphagraphics flag. Those institutions that provide checks and balances — e.g. independent franchisee associations, national franchisee advertising cooperatives, information technology boards, franchisee supply chain cooperatives — take years to erect.
A few of the more powerful franchisee barons, who are in the business of quick printing, can call the shots from which the rest of the stores can benefit. They no doubt will want the same power and mindset that currently pushes franchisees to fall in line. But franchisee oligarchs can help the chain outperform against the competition because of the enlightened quick printing knowledge that operating their own shops demand of them.