THE OPPORTUNITY IS HERE: New Rapid Refill COO Sees Huge Growth Potential

(Minneapolis, MN) —- Big-name printer and copier makers say they don’t feel threatened by companies such as Rapid Refill Ink, the franchised retailer that specializes in the remanufacturing, refilling and sale of inkjet and laser toner cartridges to both consumers and businesses. But don’t tell that to Steve Hockett, the company’s new 45-year-old chief operations officer.

“Consumers vote with their wallets all the time,” Hockett said. “They will go wherever they believe they are getting good quality, convenience, service and pricing. The ink cartridge refilling industry is huge and growing dramatically. Rapid Refill Ink has the opportunity to establish itself as the leader in our industry with a commitment to those values.”

Hockett recently joined Rapid Refill Ink after serving as president of FranChoice Inc., a company that matches prospective franchisees with franchisors. Prior to joining FranChoice, Hockett spent 15 years with Great Clips, the franchised hair salon brand where he was vice president of operations.

Since it began franchising in 2004, Rapid Refill Ink has grown to 55 locations throughout the United States with an additional 20 to 25 stores expected to open by year’s end. Hockett expects Rapid Refill Ink to add 150 locations in 2007 and 250 in 2008.

Having assumed many of the day-to-day responsibilities of Rapid Refill Ink president and founder Dan P. White, the aggressive growth strategy dovetails well with Hockett’s experience. During Hockett’s tenure at Great Clips, the franchisor grew from 200 to 1,700 salons.

“I see a lot of parallels to Rapid Refill Ink,” Hockett said. “It’s a small-box, franchised retail concept that is customer-focused. It is also in an emerging sector of franchising in much the same way that hair care was 20 years ago.”

According to The Wall Street Journal, 308 million remanufactured cartridges are expected to be sold in 2006. A typical Rapid Refill Ink store carries 1,100 different inkjet cartridges and 200 models of laser toner cartridges, with overall savings on remanufactured cartridges ranging between 30 and 70 percent.

“There are no secrets in this business,” Hockett said. “It’s a matter of taking care of customers and solving their problems. A customer wants ink when they need ink. They don’t want it next week. They want it today. Rapid Refill Ink fills that need with its convenience, value, selection and service.”

Franchisors such as Rapid Refill Ink are planning to make a dent in the revenue streams of larger tech companies who derive dependable revenue streams from the sales of ink and toner cartridges. According to figures cited by Lyra Research Inc., in a WSJ online story, “franchisors are ramping up sales at a rate of 10 percent a year, compared with growth for big tech companies along the lines of six percent a year.”

“From an operating profit perspective, Hewlett-Packard has essentially become an ink company that builds hardware to deliver their ink,” Hockett said. “That is a pretty substantial change from the way things were 10 to 15 years ago.”

The industry was abuzz recently when Hewlett-Packard accused another national reseller of refilling used printer cartridges with ink that relies on a formula for an HP-patented ink brand. It was not an official legal action, but HP asked the company to stop using inks with the same chemical composition as one of its patented brands.

While the action was seen as an attempt to crack down on the cartridge refill industry, Hockett said it posed no concern for Rapid Refill Ink.

“HP’s focus is on defending its patents, which makes a lot of sense,” Hockett said. “From Hewlett-Packard’s perspective, some concepts are getting too close to the line in regards to patents. The companies that will succeed are the ones who will stay away from infringing on any patents. That is Rapid Refill Ink’s plan.”

Hockett said he views Rapid Refill Ink as a “strong and sound” company. He said he sees no need for dramatic changes. His short-term focus is to solidify the company’s marketing, real estate and operational support departments to support his long-term goal of aggressive growth.

“We want to strengthen the areas that are necessary to develop a thriving retail concept while at the same time recruiting franchisees who are focused on helping us grow the Rapid Refill Ink network,” said Hockett, who added that the company is in the process of moving its headquarters from Springfield, Ore., to Minneapolis.

Rapid Refill Ink will celebrate the third anniversary of its franchising program in January 2007. While the emerging cartridge refilling industry features a number of franchised competitors, Hockett said Rapid Refill Ink is well-positioned for growth.

Says Hockett, “We have an opportunity to create a global brand name very quickly. The same printers we use here in the U.S. are used around the world, so this is a concept that can just explode across America and across the world. The demand is there, the need is real and we plan to build a system to deliver value driven printer ink solutions worldwide.

Potential franchisees are attracted to Rapid Refill Ink because it has momentum and solid fundamentals in place. The market is huge and no one dominates it. The opportunity is there for two or three concepts to grow fast and become recognized brand names. Rapid Refill Ink will be one of those. We want to be the leader in the industry.”