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AlphaGraphics Franchise Costs & Fees

Date of Incorporation: 1970
Franchising Since: 1980
Headquarters: Salt Lake City, Utah

Business Description: AlphaGraphics, Inc. is the franchisor. The products and services produced by an AlphaGraphics Business Center may include: graphic design, color and black and white offset and digital printing, bindery, mailing and fulfillment, multi-channel marketing communication solutions, e-commerce, large format signage and point of purchase, vehicle wraps, promotional products, direct mailing campaigns, packaging, business identity and brand awareness packages, customer loyalty programs, search engine marketing and optimization solutions, social media and other visual communications services.

Franchise Offer: The franchise offered is to operate an AlphaGraphics Business Center, which offers customized print and marketing solutions to businesses using data driven, multi-channel communications that may require a blend of design, print, web, mobile and social media services. Currently, you may develop your Business Center through one of the 4 following pathways: develop a new business center, acquire an existing graphics related business and convert to a Business Center, purchase an existing Business Center, and convert an existing graphics related business to a Business Center.

Financial Assistance: The franchisor does not offer direct or indirect financing, nor does it guarantee a franchisee’s note, lease or any other obligation. Most new franchisees obtain financing from third-parties or self-fund. The franchisor may provide assistance in helping franchisees understand funding choices and requirements. The franchise is listed on the SBA Franchise Registry that is hosted by FRANdata.com. This listing may provide franchisees with faster SBA loan processing because the franchisor’s Franchise Agreement and franchise contracts have already been reviewed and approved as eligible for financing by the SBA.

Training and Assistance: The franchisor provides two phases of initial (new franchisee) training: Orientation and Certification. The Orientation phase lasts a minimum of 5 to 7 days. The Certification phase lasts for a minimum of 2 to 4 weeks. Orientation and Certification includes self-directed, e-learning, training at the franchisor’s Salt Lake Office and on and off-site training. Franchisees or the Managing Owner must successfully complete, at the franchisor’s discretion, both phases of the training program to the franchisor’s satisfaction (or else be replaced). Franchisees may request additional or special training or assistance of franchise personnel. The franchisor or its designees will provide additional and special training or assistance that is reasonably requested and when its personnel are available.

Territory: The Franchise Agreement will identify a Protected Area in which franchisees will have certain rights. Generally, a Business Center and an AGStudio will receive a Protected Area containing a minimum of 2,500 total businesses, including a minimum of 500 targeted businesses with 5 or more employees.

Term of Agreement and Renewal: The length of the initial franchise term is 20 years. If franchisees are in good standing, they can renew your Franchise Agreement for one renewal term of 10 years on the then-current terms.

Obligations and Restrictions: The Business Center must at all times be under the franchisee’s direct supervision or, if the franchisee is an entity, a Managing Owner who the franchisor has approved. If franchisees are an entity, they must designate one of the owners as the “Managing Owner.” The Managing Owner must be a natural person who owns a controlling interest in the franchise (at least ⅓ or ½ of the voting shares, depending on how many owners) and has the authority of a chief executive officer. Franchisees must offer and sell at the Business Center or AGStudio all services and products that the franchisor periodically requires for AlphaGraphics franchises. Franchisees cannot offer or sell any services or products that the franchisor has not authorized.

Estimated Number of Units: 280

Investment Tables:
Initial Investment for a New Business Center
Name of Fee Low High
Initial Franchise Fee $40,000 $40,000
Training Fee $8,000 $8,000
Sales & Marketing Opening Campaign $15,000 $15,000
Ramp-In Office $7,800 $14,400
Real Estate Deposits & Leasehold Improvements and Construction $5,000 $50,000
Equipment, Furniture, Fixtures, Signs, Inventory, Remodeling and Decorating Costs $130,000 $155,000
Finance Costs $0 $17,000
Miscellaneous Opening Costs $5,000 $15,000
Additional Funds (12 months) $50,000 $90,000
ESTIMATED TOTAL (excluding real estate purchase or lease costs) $260,800 $394,400
Other Fees
Type of Fee Amount
Royalty (Ongoing) Royalties range from 7% down to 3% of Gross Sales, subject to a yearly minimum.
Alpha-Graphics Integrated Marketing Fee (AIM Fees) (Ongoing) 2½ % of Business Center’s Gross Sales. Currently the franchisor caps AIM Fees at $15,000/year for the first Business Center and $7,500 for each additional Business Center or AGStudio.
Managed Services Program Fee for the Franchisor’s Managed Services Program (Ongoing) Mandatory: $875 - $960 per month
Optional: $0 - $635 per month.
MIS System Fee (One-Time) $15,000
Survival Ware Subscription (One-Time) $500
Network Conference Registration Fee (Ongoing) Then-current fee (currently $725 per person).
Accounting Fees $300 - $700
Additional Training or Technical Assessment Fee (if applicable) $800-$1,500 per day plus all related travel expenses for training and Technical Assessment.
Transfer Fee (if applicable) $20,000 - $40,000
Interest (if applicable); Late Fee (if applicable) Interest at the lesser of 1.5% per month or highest contract rate of interest applicable law permits; late fee of $25 or maximum legal rate for each delinquent payment.
Audit & Legal Fees (if applicable) $3,000 - $15,000
AGAlliance Acquisition Program (Optional) Fee 1: a $1,000 fee for identifying and marketing potential acquisition leads.
Fee 2: a 1% success fee for each acquisition that is closed based upon the size (measured by annual revenues) of the acquired business.
AG Business Builder Program (Optional) A 1% success fee for each acquisition that is closed based upon the size (measured by annual revenues) of the acquired business.
Liquidated Damages (if applicable) Based upon formula in FDD.
Facilitated Resale Program Fee (Optional) A success fee of the greater of $25,000 or 6% of the total purchase price of the Business Center at the time the closing of the transfer occurs.
Insurance (if applicable) Cost of insurance.
Sales & Marketing Opening Campaign Amount not expended by franchisees for their campaign.

The above information has been taken from the FDD of AlphaGraphics. Year of FDD: 2016

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