Welcome to another episode of Atlanta Franchise Today with host Leslie Kuban, expert franchise consultant and owner of FranNet Atlanta. Your franchise evaluation process may involve some twists, turns, and pivots along the way. You may land differently than you expected. In this episode, Leslie sits down with Jose Jimenez, owner of two AlphaGraphics centers in the Atlanta area. He became an AlphaGraphics franchisee in the second half of 2019 after a long career as a civil servant and corporate employee working a completely different field. He has steered his businesses successfully through the tests one would expect at any new endeavor plus the challenges we all faced with the pandemic.
Transcription:
Leslie Kuban:
Jose, welcome. Glad to have you on the show.
Jose Jimenez:
Thank you for inviting me to this. This is great.
Leslie Kuban:
Well, first let’s talk about your business, AlphaGraphics.
Jose Jimenez:
Sure.
Leslie Kuban:
Tell us about who your customers are and how you help them.
Jose Jimenez:
Sure. So the way I frame that is that I work with to solve the visual communications needs of just about anyone, but I focus on businesses, government and nonprofits. And by visual communications, I mean anything from a business card to a sign to promotional items like T-shirts and hats and pens. I love the fact that we can address the entire suite of what someone might need to reach an intended audience.
Leslie Kuban:
So it sounds like you’re an outsource marketing department for a small business or a nonprofit organization. Is that fair to say?
Jose Jimenez:
That is more than fair to say. It is one of my goals to partner with any small business. Clearly larger companies with which we work they have their own marketing departments and often graphics departments, but I really enjoy sitting down with a small organization, partnering with them to think about how to advance their goals, particularly their business goals. And I love feeling like I’m part of the marketing team.
Leslie Kuban:
Do you recall what your criteria were? You start to look at different opportunities, you realize they’re different in different ways, and you did look at several-
Jose Jimenez:
Yes.
Leslie Kuban:
… opportunities, which helped you hone your criteria list, ultimately leading to AlphaGraphics. Do you remember what was on your criteria list?
Jose Jimenez:
I do. In fact, you and I connected at a career placement organization in the perimeter. At the time I was still thinking about what I wanted to do next. So the concept of small business ownership was on my mind and I was very fortunate, frankly, to work with someone like you, because you can run a small business independently or you can make a small business part of a franchise. There is a lot of risk in either direction. Through you and other resources I explored the risks of both and I determined that being part of a franchise network would be less risky from a future perspective than being on my own. Some people believe that being part of a franchise eliminates all risk. That’s not true, and I’m sure we’ll get into that. So that was kind of the first thing. It’s like, “Do I go on my own, or do I do franchising?”
Leslie Kuban:
And then what helps is to establish some criteria so that you can filter options and not spin your wheels and waste a whole lot of time on a business that may be a great business for somebody else, but doesn’t fit your unique criteria.
Jose Jimenez:
Yeah, that’s important. That is important because you can be paralyzed, I think, if you have to explore on your own or you’re looking at… Like, I only really explored three different options. If you’re exploring 300, that can get overwhelming. And if you’re going to do the due diligence correctly, frankly, that is not doable by any human being. So, yes.
Leslie Kuban:
And you had some twists and turns in your journey.
Jose Jimenez:
Yes, I did.
Leslie Kuban:
You were pivoted in your evaluation process, and I think actually that can happen and many of our viewers are where you were and looking at this, and I think those are good to hear, some of the unexpected things that can happen. I’m going to ask you to share your story about that.
Jose Jimenez:
Sure. So, when I first began the journey, I really would’ve prefer to acquire an existing operation. There are pluses to that. There is an existing client base, an existing revenue stream where therefore you can grow, right? There are some risks to that. In talking to other franchisees, frankly, if you buy an existing operation, you’re buying its problems as well. You’re buying its employees who are used to doing things a particular way and you may be buying financial issues that you need to, if you are not careful about your due diligence, you can inherit, to be frank. But in my mind, I would’ve prefer an existing operation. So initially you put me in touch with a franchisee in this network who was looking to sell, and we began a process that lasted about three months. I call it a dance.
Jose Jimenez:
You have to go through carefully. You have to look at the financials. I had an attorney and an accountant working with me, looking at both legal obligations of the operation and the numbers. What I determined sometime in January of ’19 was that while this franchisee had asked the franchisor for help to sell his operations, he wasn’t going to sell. By then the franchisor had determined that it wanted me to be in the network. So I appreciated that, and I’m sure that your audience knows about discovery days, et cetera. That’s when you test-drive the franchisor, and frankly it’s a two-way conversation. They’re evaluating whether you have what it takes to fit, what they’re looking for in an owner. Well, AlphaGraphics had determined that they wanted me as an owner.
Jose Jimenez:
So sometime in middle January of ’19, I said to the franchisor, “I want to be in. You want me in, but this initial path is not it.” So February 8th, 2019, I jumped to do something that had not been done in the AlphaGraphics network in over seven years. I agreed to develop a brand new territory and create a brand new production center from the ground up in the Dunwoody, Sandy Springs area. And some friends, even some other franchisees, were surprised that I agreed to do something that ostensibly is difficult to do, but I don’t regret that choice. As difficult as he has been, he has also had a lot of great things. So, I had to make a decision on the quick.
Leslie Kuban:
And that is what you described. It happens more often than people would like where a seller puts their business on the market to sell and then realizes after you’ve spent time and money that they’re really not ready to exit their business. Does that translate into any advice that you would have for other people who maybe, they’re where you were? They are now where you were and looking to do that. Are there any telltale signs or nuggets of wisdom that you would pass along to that person?
Jose Jimenez:
So, a couple of things quickly come to mind. The interesting thing is, the first one, I still pursued it, right? But when I first sat down with that franchisee who ostensibly had asked for help to sell his property, in 15 minutes, we were having coffee much like this, near here actually. I told him, “You don’t want to sell.” You can tell the moment that person is speaking about future plans, investment he planned to make. That is not the kind of dialogue I would want to hear from someone who is selling. So that will be one marker. Have that conversation, feel that personality. Is that person really ready to exit the business or retire? Because you will have to then, that’s the second one. You have to bring resources of your own to this and understand that just like any other business transaction, the end result is not guaranteed until you sign that contract to buy the business.
Jose Jimenez:
So you have to be willing to spend without necessarily expecting that the sale will go through. Due diligence, by its very definition, means that, hell, he may have been very willing to sell, but chances are always there that you’ll find something when you begin to look at the books of a company or begin to look at legal contracts a company has that make you pause and say, “Maybe this is not the right way to go.” So you have to do that, and you have to be open to the possibility that this is not going to work out. You can hope. We always should hope, but in any kind of business transaction, you’ve got to be willing to say, “This is not going to work out.” And that’s what I ended up doing in January.
Leslie Kuban:
Right. You have to be willing to walk away.
Jose Jimenez:
Walk away.
Leslie Kuban:
And interesting, hindsight’s always 20/20, isn’t it? So you knew in that first coffee meeting that there was a red flag. So I think the wisdom there is really get a sense of, does the person selling their business, is it clear that they have something they’re going towards, that they’re looking forward to? They have a plan so that they’re much less likely to get cold feet at the 11th hour.
Jose Jimenez:
It is understanding people, seeing in the conversation whether you can get their motivation. If you’re planning a trip to Aruba supposed to buy a whole new printer, that can tell you something. And frankly, there is an adage that says, “We should be doing business with people we like.” I liked the gentleman and I’m not bitter in any way about the fact that I had to walk away despite the resources I put into this. In business, if you take it really personally, then maybe this is not for you either. I’m a people person, but I also understand that it’s a business transaction and you cannot force the hand. You hope that there is a meeting of the minds on the price and a meeting on the minds in the eventual decision to sign that bottom line. But if there isn’t, then take the opportunity and the learning and move on, but know that you need to be ready to walk away.
Leslie Kuban:
Yeah. So viewers, whether they’re here in Atlanta or out in California, how can they get in touch with you and do business with you, Jose?
Jose Jimenez:
Sure. So we have AlphaGraphics, Dunwoody, Sandy Springs. You can reach us there at (678) 855-7750. Or you can visit our website at US794.AlphaGraphics.com. If you have a project and you’re curious about what we will price, you can send us an email at US794@AlphaGraphics.com. In East Point we are called AlphaGraphics Tri-Cities, Atlanta Airport. That center’s number is (404) 768-5665. And if you happen to be going into the airport, we can have your products ready for you to pick up and go on that plane ride. And our website there is US793.AlphaGraphics.com. And as I mentioned earlier, if you have a project and you want us to quote it, you don’t even have to bother with the website. You can just send us an email at US793@AlphaGraphics.com. And on the website itself, you’ll discover the suite of products, including those promotional items that we offer.
Leslie Kuban:
I’m so glad you joined me on the show today.
Jose Jimenez:
Well, Thank you for the invitation.
Leslie Kuban:
Thank you so much for sharing about your journey.
Jose Jimenez:
Thank you. Thank you for the opportunity to speak to you again. I always enjoy hanging out with you and for the opportunity to speak about it.
Leslie Kuban:
Well, folks, I hope you have enjoyed this episode on Atlanta Franchise Today. Please tune in next week. Look forward to seeing you then.
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