CEO renews franchising and leads his company to $138 million a year.

David Woods has created a franchise that focuses on
promotional products. Last year, $17.8 billion was spent on these items. Woods says his Adventures In Advertising company is on the threshold of continued growth. Long-term expansion plans call for 800 franchisees.

When Adventures in Advertising CEO and President David Woods says his company had the opportunity to start over in 2004, he means it in both a figurative and literal sense. Days before New Year’s Eve in 2003, the business was loaded on three semi-trailer trucks and moved west from its corporate headquarters in Boston to Wisconsin. That’s quite a move.

“A lot of people stayed right to the end. They literally cleaned out their desks and loaded their jobs on a truck to Wisconsin,” Woods recalled. “It was a chance to get a fresh, clean start.”

It’s only fitting that after suffering significant financial losses in previous years, AIA posted a profitable month in January 2004 and has maintained that achievement ever since. The nationwide, franchised network of individually owned promotional product and corporate apparel distributors has gone from almost collapsing to thriving in the rapidly growing $17.8 billion promotional products industry.

The turnaround can be credited to the unassuming Woods, who joined AIA in February 2003 with no previous franchising experience. With 315 franchised distributors in more than 40 states and systemwide sales of $127.7 million in 2005, Woods has positioned AIA to resume franchising, a program that was halted in 2004 as AIA sought to rebound from problems wrought by overzealous growth by the company’s original founder.

With its franchising program launched anew in May 2006, Neenah, Wisconsin-based AIA expects to grant 25 to 40 new franchises annually during the next two to three years, with an initial goal of reaching 500 franchisees. Long-term growth calls for 800 U.S. franchises.

AIA is further positioned to capitalize on both short- and long-term opportunities within its industry since a July 2005 management buyout in partnership with The Riverside Company, a leading private-equity firm that offers the resources to support AIA’s concentrated focus on profitable growth. The transaction was structured as a sale of AIA capital stock by 4imprint Group plc – AIA’s former parent company – to The Riverside Company and members of AIA’s senior management team.

“AIA represents an excellent franchising opportunity,” Woods said. “AIA is a strong, profitable company with 315 franchisees. Although we are just starting to sell franchises again, we’re a well-experienced and very successful company.”

AIA is among the 15 largest of more than 22,000 distributors in the promotional products industry and the largest franchised company in its niche. AIA locations provide local, personalized service and promotional items for direct mail, trade shows, employee incentives, company events, product introductions, corporate gifts, sports tournaments, sales meetings, safety programs and more.

AIA is unique because its consultants are not simply distributors. AIA serves businesses of all sizes by utilizing a consultative approach to gain a complete understanding of a client’s audience, theme and objectives. AIA’s creative team then develops marketing solutions tailored to a company’s unique marketing and promotional goals.

“Our franchise owners think of themselves as promotional consultants. They try to focus on meeting a client’s promotional needs in terms of designing successful programs rather than only focusing on the products themselves,” Woods said. “We need to sell products to be successful, but our franchisees see their role as much broader than that.”

AIA was founded in 1981 and began franchising in 1994. The company experienced tremendous growth, but when 4imprint Group plc—a United Kingdom-based company and the fourth-largest promotional products distributor in the world—acquired AIA in January 2001 it was a struggling behemoth. The rapid growth, which peaked at more than 560 North American franchises in 2002, had not been quality growth. Many franchisees were underperforming.

“AIA was performing poorly and losing money,” Woods said. “Had it not been owned by a large, publicly owned company (4imprint Group), I am sure it would have failed. Fortunately we had a very supportive corporate parent. They gave me complete freedom to do whatever was needed to develop a plan to turn things around.”

The challenge was nothing new for Woods, who had spent most of his career guiding the profitable development of start-up and fast-growth companies. He had previously been CEO of the Lee Wayne Corporation, a leading promotional products distributor, where he increased annual sales from $18 million to $70 million during his 10-year tenure. Prior to joining AIA, Woods served as the first COO of the Promotional Products Association.

Four months after joining AIA, Woods announced his turnaround plan, appropriately enough, on June 6, 2003—the anniversary of D-Day. Troublesome franchisees were terminated, financial and operational improvements were implemented and franchising was later halted.

The results were rapid and impressive. After relocating from Boston to Oshkosh, Wisconsin, in January 2004, AIA had its most successful year to date, posting systemwide sales of $118.4 million with a substantially lower base of franchise owners. The trend has continued, with AIA projecting systemwide sales of $138 million in 2006.

“We stopped franchising almost immediately. We had to go back to the basics and build strong systems on which we could build a profitable company,” Woods said. “We immediately focused on providing high-quality service to our existing, dedicated franchisees. It paid off because our loyal franchisees—those who were working hard and trying to do the right thing—saw that we were committed to our goal of building a large, successful company.”

AIA’s return to profitability attracted the attention of The Riverside Company—drawn by AIA’s growth potential and leadership position within the promotional products industry—and culminated in the July 2005 management buyout. The Riverside Company is the largest private equity firm focused on the small end of the middle market and one of the industry’s most experienced leveraged-buyout investors.

With its new management team already firmly entrenched, the transaction further enforced AIA’s new direction with its results-oriented focus, sound growth strategy and sense of entrepreneurism that results from an owner-managed company. It also paved the way for the resumption of franchising as AIA moved its headquarters to Neenah, Wisconsin, in April 2006.

“There’s much more of an entrepreneurial spirit,” Woods said. “The people who run AIA, in many cases, are actually among the owners. We have solid, experienced backgrounds and The Riverside Company has a very long demonstrated track record of success.”

Jeff Poore, along with his wife Teresa has been an AIA franchisee since 2000. They operate AIA/Marketing Works in Birmingham, Alabama. Poore said Woods and his management team have had a tremendous influence.
“David has been a stabilizing force,” Poore said. “David is more like a father figure. He has given the company stability and provided a comfort zone for the franchisees.”

With an estimated initial investment that ranges between $15,000 to $53,000, AIA provides a strong, affordable investment opportunity both for individuals with prior experience in the promotional products industry and others with strong marketing, sales and management skills. Ninety percent of AIA franchises are home-based businesses and can be initially operated by one person. Owning an AIA franchise is also an attractive opportunity for couples, who typically split operations and sales responsibilities.

Although there are more than 22,000 distributors in the promotional products industry, the vast majority are small, independent companies with only a few employees. AIA’s network of consultants not only enjoys the benefits of working within a franchised concept but also the global buying power that AIA provides from being among the world’s leaders in its industry.

“It is because of AIA that we grew to become a million-dollar company,” said Poore, who launched his business independently in 1995 before joining AIA five years later.

The $17.8 billion spent on promotional products in 2005 increased 5.1 percent vs. 2004 and represented twice the amount spent on Internet display ads. The figure was five times greater than outdoor advertising and more than cable television advertising, according to TNS Media Intelligence.

“I think we’re on the threshold of continued strong growth,” Woods said. “For individuals with an advertising, marketing or sales background, it’s a fun industry. It’s growing rapidly and there are many individual success stories.”

Taken from WEB