Print to fit

REVIEW SUMMARY
Company. Big Frog
Industry. Franchising
Key. Thanks to their unique printing technology and specific business model, leaders at Big Frog feel confident that their place in the market cannot easily be overtaken.

What do you get when you cross three research scientists with a popular broadcast news program?

The answer: a T-shirt company. At least, that's what has happened to Leeward Bean, Christina Bacon and Ron DeFrece.

The trio had been developing an idea for an internet-based, geek-friendly novelty store in 2006 when they decided to reach out to local news outlets for coverage. They had just acquired a new, high-tech printing device that could deliver ink directly to garments, and wanted to demonstrate.

They used the new device to print a pair of T-shirts with logos for a local business feature operation, hoping to attract attention from the station. The news team bit, and soon after did a story.

The morning after the story ran, the phone started ringing. Suddenly, the scientists' creation had transformed — a novelty store became a T-shirt producer.

Today, that garment-printing company is called Big Frog (Big Dog was taken). Having just completed its first full year in business, the Oldsmar-based company now has 12 locations under contract, and has pulled in roughly $460,000 in revenue.

Bean, the company's chief executive officer, admits to having arrived at the current model in a bit of a roundabout fashion. At the outset, he says, “Big Frog had no intention of doing shirts or franchises.”

But in the process of building a business they expected to have a slightly different focus, the company stumbled upon a unique technology — the aforementioned “high-tech printing device” — that gave them a sizeable advantage in the small-order garment printing space.

Add to that a legitimate franchising inquiry from an experienced small business owner, and you get what Big Frog has: a growing franchise business in a unique market space.

To start, a sale
The journey from research science to garment printing began with a $50 million sale.

In June 2004, Dunedin-based Ocean Optics, Inc. was acquired by United Kingdom-based Halma. At the time of sale, Bean was working for Ocean Optics as its vice president of sales and marketing; Bacon and DeFrece each held management positions, as well.

Bean's executive standing made him a direct beneficiary of the transaction. He was able to take a short break from the working world — emphasis on “short”.

Bacon and DeFrece would soon draw him back from retirement. They wanted a change from their work at Ocean Optics, and wondered if Bean would work with them.

“I told them I'd be happy to help,” he recalls.

The three set their start-up budget at $60,000, and created a holding company in January 2006 called Dream Niche LLC to support their business vision. They named their first company Uniquely Geek, and started navigating the process of selling novelties with “nerd” appeal online.

Bean recalls conversations from early on about adding T-shirt sales to the business model. At first, it seemed as though screen printing costs would be too great to overcome, and the iron-on alternative wouldn't have yielded a high-enough quality product.

“I'm too old to sell garbage,” Bean thought.

But a trip to an Orlando trade show in the spring of that year ended up changing the direction of Bean, Bacon and DeFrece's business. There, Bean made an important discovery while visiting Brother International Printer Co.'s display.

He learned about a new type of technology called “direct-to-garment,” or DTG printing, that could enable a business to take an entirely new approach to creating customized clothing.

For most customers interested in producing a unique clothing item, their first phone call is to the silk screener. That's because screeners are really good at what they do — they can produce large numbers of an item with a simple design. If you want a thousand shirts with a three-color design, the screener is your best bet.

But because of the way they print shirts, most screeners set minimum orders. Most jobs also include set-up and design fees, which can be difficult to distribute over a small number of shirts.

Instead, Brother's DTG technology allows users to print multi-colored images directly to individual garments. That means no minimum orders, and limited set-up costs. It's uniquely suited for customers who want only a handful of shirts, a market that the Dream Niche principals soon found to be densely populated.

They dove in, rebranding Uniquely Geek to Big Frog and making one more major change to their business model, thanks to the interest of an especially curious local business owner.

Avoiding reinvention
Joe Lackey used to own a small independent retail business located in South Tampa, and his business used to need a lot of T-shirts.

In the course of reviewing his options to have printing done, Lackey found a listing for a garment printer that advertised no set-up fee, and no minimum.
Lackey's first thought: “Yeah, right.”

His second thought was to contact the folks who made those unusual claims. He soon found himself talking face to face with Leeward Bean about wanting to get involved in the small-order garment printing business. At first, Bean was worried that he may have found himself another competitor, just a year after getting going on his own business.

But that wasn't what Lackey was after. “I don't want to reinvent the wheel,” he said. “I want a franchise.” Soon after, he reached an agreement with Bean, and closed his old retail operation.

Lackey's commitment was the first of 12 that Big Frog would obtain over two years after issuing its Franchise Disclosure Document in October 2008. Within the company's first full of year of franchising, seven stores would open in Florida, along with two in Georgia, and one in Missouri.

“I've had a lot of fun doing this,” Lackey says of his experience thus far with Big Frog. And the former contractor is enjoying some financial success. In terms of a year-over-year comparison, Lackey says, “The months that have repeated have all been better.”

Bean is having fun, too, and he says his wife has noticed: “She's never seen me happier in anything I've ever done.”

At the same time, he's willing to admit that running a franchising operation is not always sunny. The two main challenges: profitability and responsibility.

Opening stores takes upfront cash. For such a young franchise, that means a lot of liquidity will be needed early on for Big Frog. Bean says it could take two and half years to get from concept to profit.

And while trying to build a business, the leaders at Big Frog will be carrying what Bean calls “the weight of twelve families” on their shoulders. There's a whole lot of trust involved when a recently unemployed entrepreneur decides to take on a franchise opportunity.

But that trust can also be rewarding for the franchisee.

In Bean's words: “Each time we sell a franchise, we're giving people an opportunity to control their own destiny.”

Competition and challenges
Big Frog is enjoying the growth that comes with being the first to arrive at a new market opportunity. But what happens when competitors notice?

What if a much larger company decides to invest in the DTG technology that has propelled Big Frog's business? Could it significantly impact their company?

Bean is confident that the business model his company has constructed will be able to withstand any pressure from outsiders, which would likely come from one of two angles.

The first would be a garment printer with a large existing physical presence — say, a mega-silk screener looking to invest in new technology. Bean doesn't think the bigger companies, used to handling bulk orders, would be able to adjust to the smaller, specialized orders.

“Corporate structures are not built to deal with differentiation,” he says.

The second would be other recent start-ups that have built their business like Big Frog has, with a focus on small-order fulfillment from the beginning.

In fact, Big Frog is already dealing with that sort of competition now; Louisville, Ky.-based CafePress is an online custom clothing store using 68 of the same sort of printers that Big Frog has in each of its stores.

How do you answer that?

Bean says his company will take advantage of its strength in customer service, an arena in which internet-based operators simply can't compete. Given CafePress' scale, Bean argues it's impossible to get one-on-one attention.

“It's like poking a grizzly bear with a pin,” he says.

Big Frog will lean on its customer-friendly, niche-serving business model to grow over the next five years. Bean projects the company will increase their employee count from five today to 36 to serve a growing customer base, which brings between 150 and 200 people monthly into each franchise location on average.