By Ed Avis
When Bruce Franz gives tours of Franz Reprographics’ main location in Minneapolis, he tells guests that he and his wife, Patty Franz, bought the business in 1999. Then he tells them that there is exactly one piece of equipment from that time still in use – the forklift.
That fact illustrates the rapid transition of technology in the reprographics industry. Keeping up with that transition – and acquiring other reprographics firms that found challenges to keep up – has been essential to Franz Reprographics’ success.
“I think the reprographics busines has been one of the fastest changing industries out there,” says Franz, whose father, Al Franz, launched the company in 1965. “Dad did a lot of photo engineering repro work, and when we acquired the company, we knew the photo business was going away. We said, ‘Where is this business going to go?’”
Bruce and Patty upgraded the company’s technology to meet current needs and changed the name from Franz Engineering Reproductions to Franz Reprographics. Those changes helped the firm maintain its standing in the crowded Minneapolis market – competitors included ARC, ABC, Gill Repro, Albinson’s and Minnesota Blue – but they felt they had to do more to thrive.
“We knew we had to broaden our wings out of the Minneapolis metro area,” Franz says.
A Series of Acquisitions
Their first move in that regard was the 2007 acquisition of Michelle’s Blueprint in Rochester, Minnesota. Michelle’s Blueprint had been a trade customer of Franz Reprographics and the owners had a good working relationship, so the acquisition made sense. Franz upgraded the technology of Michelle’s Blueprint and quickly expanded market share.
“There were two other blueprint firms in Rochester in 2007; within a year both of them had closed and we were the only ones left,” Franz says. “The customers saw the new technology we brought in and gravitated towards it.”
Franz says he discussed the acquired company’s name with the previous owner, and she recommended that they change it from Michelle’s Blueprint to Franz Reprographics. Franz felt he didn’t need his name on the door, but the previous owner convinced him that he should leverage the credibility associated with Franz Reprographics. He’s glad he did, because once that location’s market share started to grow, potential clients began considering Franz a regional firm, rather than just local. That led to new work.
“For example, a company in Minneapolis noticed our Rochester location, and said, ‘We have an office in Rochester, too. Can you help us there?’ So our business grew that way,” Franz explains.
The company’s next acquisition came in 2011. A large national office copier dealer had acquired several businesses in Sioux Falls, South Dakota that included large format equipment sales and service. But that wasn’t their specialty at the time, so eventually they transitioned that book of business to Franz and they established a local office there.
A year later Franz Reprographics expanded further into South Dakota with the acquisition of Dakota Blueprint in Sioux Falls. The owner of that company sold the business because he wanted to focus his business more on construction consulting.
The Franzes wanted to serve clients throughout South Dakota, but it’s vast, so they investigated firms to acquire in other South Dakota cities. The first few they considered didn’t work out, but in 2018 they learned that Mathison’s Blueprint might be available. Franz knew that company’s owners well, and eventually they came to an agreement.
“We purchased certain assets and a certain book of business,” he says.
Mathison’s had three locations – Bismarck, Fargo and Rapid City. The Franzes kept the Bismarck location and it became a Franz Reprographics location, but they decided against doing the same with the Fargo and Rapid City locations.
The company’s most recent acquisition was just this past May– the large-format sales and service business of Tierney in St. Paul.
“Tierney is an industry leader in the AV world,” Bruce explains. “They sell AV all over the country. They had a large-format sales and service division, but they felt it was time to exit that business. It was a good time for them to say, ‘Let’s focus on our core AV business.’ So we acquired a book of business and most of their large-format inventory, and we added two of their employees to our family.”
The Tierney acquisition included a laser sign cutter, which has introduced a new line of business for Franz. That sign cutter, and the rest of the equipment and inventory acquired from Tierney, has been moved into Franz’s location in Minneapolis.
“We reconfigured our warehouse and some of our production facility to accommodate that inventory,” Franz says. “We already have a showroom set up, so we can display the equipment very well.”
Doing Acquisitions Correctly
Growing through acquisition presents certain challenges. The reputation of the company being purchased rides along with the deal, for example, and technology and processes need to be brought up the standards of the acquiring company so that the acquisition doesn’t pull down the overall reputation of the combined firm.
“You can’t go buy anyone willy-nilly,” Franz notes. “You look at each one and say, ‘Does this give us a better reach? What new business streams might come with this business? What is the cost and what is the value?’”
Once the deal closes, the Franzes make sure the technology gets upgraded and employees are properly taken care of. Then they reassure existing customers.
“When you purchase a business you need to do some customer relations and say, ‘We are here to help you,’” Franz explains. “I want the customer experience to be a little better than before. It can’t always be better, but with a little effort you can show that it’s fresh and new. Sometimes once we get rolling with a new acquisition, we’ll have customers call us and thank us. They say, ‘I ordered this paper yesterday and got it today! Thank you.’”
The work continues long after the new company is integrated. Franz says he regularly travels to his company’s locations outside of Minneapolis to get the pulse of the business and interact with employees and clients.
“I like it when I show up in our Rochester location and the customers call me the B-team; I’m not the A-team, that’s our regular employees,” Franz says. “I’m proud that our staff takes an interest in the business.”
Flexibility is Key
How has Franz Reprographics thrived during an era when many other reprographics firms have struggled? Franz says one key is being flexible. An owner must be willing to embrace new technologies or new business lines. If the company’s growth strategy includes acquisition, it should consider if the acquisition in question will open up new opportunities.
Another key is having associates that one can rely on, Bruce says. He is currently president of the RSA and has counted on his friends in that organization for counsel throughout his career.
“As we’ve expanded, and especially with the Tierney acquisition, we now have equipment installed outside of our three-state area, and I know I can call an RSA member to get equipment serviced or get supplies there. These guys and gals have become my family in the business world.”
Franz says he is still looking for acquisitions that can help his firm grow and potentially help a current owner who is seeking an exit from a business. In each case he will approach the opportunity with an eye toward his own eventual exit.
“I think going into these deals with integrity is huge,” he says. “To me, that’s more important than anything. When I leave this world I want to be known as the guy who treated everyone right.”