Allegra Franchise Sales, Costs & Profits (2023)

As for many printing franchise, Allegra has reduced its footprint over the years: from 260 franchises 10 years ago, the Allegra now has just over 190 franchises in the US today.

Still a leader in the printing industry, Allegra has added additional marketing services to its scope over the years to stay competitive in a market switching to digital alternatives.

So should you start a new Allegra franchise in 2023? Is this a good business?

By looking at the financials from the latest FDD, Allegra sure seems like a great business. Indeed, you would need to invest a mere $293,000 to set up a new shop, whilst the average turnover per year is $1,143,000..! Impressive, no?

In this article we’re looking at Allegra and its latest FDD to find out how much it (really) costs, and how profitable the business really is. Let’s dive in!

Key stats

Franchise fee	$45,000
Royalty fee	3.75%
Marketing fee	2.00%
Investment (mid-point)	$244,000
Average sales	$757,000
Sales to investment ratio	2.0x
Payback period	[franchise_value_investment_payback]
Minimum net worth	$250,000
Minimum liquid capital	$100,000

About Allegra

Allegra Marketing Print Mail is a full-service marketing, mailing and printing company headquartered in Plymouth, Michigan. Its centers offer direct mail services, custom printing, graphic design, marketing and promotional services and more to businesses and institutions.

Allegra Marketing Print Mail was founded in 1976 and began franchising in 1977. The company has 192 franchises in the US and 52 international locations, especially in Canada.

Allegra Marketing Print Mail has positioned itself as an important player in the $178 billion North American print and marketing services industry. Today, it provides passionate and interested franchisees an opportunity to serve their communities through multiple pathways and by providing printing and marketing solutions to a wider array of sectors, such as marketing and business communication services, email marketing, printing and mailing, etc.

Allegra franchise pros and cons

The Pros:

• In-house financing: The franchisor provides its franchisees with a variety of in-house financing options as well as third-party financing through partnerships with third-party lenders. Franchisees get financing for startup costs, franchisee fees, equipment and inventory and ongoing costs.
• Exclusive territory protection: The franchisor allows the franchisees to operate their franchise in an exclusive territory. It does not authorize any other Allegra Marketing Print Mail franchises or operate related brands in the protected location.
• Franchise training and support: The franchisees benefit from extensive classroom and online training. They are trained about the business concept, growth strategies, products and services, hiring and training qualified staff and compliance. It also offers them continuous support to run their centers smoothly.
• Marketing and publicity: Allegra provides its franchisees with marketing and advertising channels to help them boost sales and improve profitability. These include regional advertising, ad templates, national media, email marketing, loyalty program apps and local store promotions.
• Flexible franchise concepts: The franchisor offers its franchisees various franchise options to choose from, such as Allegra Marketing*Print*Mail Centers, the MatchMaker program and more, allowing franchisees to establish their centers quickly and sustain their legacy while expanding their customer bases.
• Site selection: The franchisor offers its franchisees site selection assistance to identify a viable business location. It also helps them with the designs, lease negotiations and construction of their centers.

The Cons:

• Not a passive investment opportunity: The franchise does not allow for absentee ownership. Franchisees are required to actively take part in the daily operations and management of their centers.
• Not a part-time business: The franchise cannot be operated on a part-time basis. They must be open full-time, at least following the standard B2B working hours of 9am–5.30pm
• Not a home-based opportunity. The franchise cannot be operated from home or a vehicle. Franchisees must establish a fixed office facility within or near their franchise premises.

Allegra franchise costs

You would have to invest on average $293,000 if you chose to open a Allegra franchised shop under the MatchMaker programme; and $181,000 under the Advantage programme instead.

The investment covers all the start-up costs you may need to open an Allegra franchised shop. You must pay the franchisor. In addition to the $10,000–$45,000 initial franchise fee, the investment also covers:

• Formulation costs: utility deposits, leasehold improvements, exterior signage, professional fees, training expenses, etc.
• Equipment: software, equipment, etc.
• Initial Marketing: Marketing and Brand Identification, Kickstart Initial Marketing Deposit, etc.
• Operating costs: rent deposit, insurance, professional fee, additional funds for 12 months, etc.

Here’s the full breakdown of costs per shop format:

Startup costs (Matchmaker Centers)

Type of Expenditure	Amount
Initial franchise fee	$45,000
Formulation costs	$7,706 – $55,640
Equipment	$6,150 – $133,128
Initial Marketing	$15,000 – $28,883
Operating costs	$55,595 – $206,100
Total	$129,451 – $456,751

Startup costs (Advantage Centers)

Type of Expenditure	Amount
Initial franchise fee	$10,000
Formulation costs	$4,200 – $42,115
Equipment	$6,150 – $133,128
Initial Marketing	$7,500 – $25,727
Operating costs	$2,900 – $121,100
Total	$30,750 – $332,070

Allegra franchise fees

Allegra franchise revenue

On average, an Allegra franchise makes $1,143,000 in sales per year.

This number is the average sales per franchise center for 149 of the 188 franchised centers that operated in all of 2022. This is a +16.6% year-on-year increase vs. 2021 ($980,000, 148 units).

Allegra franchise profits

On average, Allegra franchises make $186,000 in profits per year (16% EBITDA margin).

We calculated this number using the information available in the Franchise Disclosure Document 2023. Luckily, Allegra Marketing Print Mail provides detailed information on the cost structure of its franchised-owned centres, which we have summarized below.

Profit and loss	Amount	% of sales
Sales	$1,142,735	100%
COGS	$(380,531)	33%
Gross Profit	$762,204	67%
Staff	$(286,027)	25%
Operating Expense	$(290,598)	25%
EBITDA	$185,580	16%
Capital Asset Cost*	$(73,249)	6%
EBT*	$112,331	10%

Important note: surprisingly, the FDD includes depreciation and amortization above EBITDA (which is a non-cash expense and therefore below EBITDA). Therefore, we have adjusted the profit and loss above to reflect that: instead of the 10% EBITDA margin as per the FDD we estimate EBITDA is in fact ~16% of sales.

Is Allegra a good franchise investment?

We found Allegra franchises have an excellent 4 years payback period on average.

In other words, you would reimburse your investment within 4 years if you were to invest and start a new Allegra franchised business. This assumes a 7% net profit margin, in line with the 10% EBT as calculated earlier.

To be clear: a 4 years payback is excellent and as such Allegra is a great investment (at least from a financial standpoint). It’s also in line with printing shop franchises that have a 3-5 years payback on average, as per our own benchmarks.

Disclaimer

Disclaimer: This content has been made for informational and educational purposes only. We do not make any representation or warranties with respect to the accuracy, applicability, fitness, or completeness of the information presented in the article. You should not construe any such information or other material as legal, tax, investment, financial, or other professional advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, advertisement, or offer to buy or sell any franchises, securities, or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the franchise and/or securities laws of such jurisdiction.

All content in this article is information of a general nature and does not address the detailed circumstances of any particular individual or entity. Nothing in the article constitutes professional and/or financial and/or legal advice, nor does any information in the article constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content in this article before making any decisions based on such information or other content.