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Photo Restoration Becomes Profitable with Hollywood FotoFix



Photo Restoration Becomes Profitable with Hollywood FotoFix


by Chad Nielsen

Picture this: a young man helps his aging grandmother down the steps of her red-brick home and into a brown sedan. They cruise down the tree-lined street toward the neighborhood supermarket. Just as he turns the corner, a black sports car appears from the opposite direction and skids to a halt in front of the old woman's house. Out jumps a twenty-something brunette wearing a black jumpsuit and dark glasses. She sprints to the front porch, leaving the motor running and the car door open. She unlocks the door with the key from under the planter box, and seconds later emerges with an ordinary-looking picture frame snatched from the living room wall. Her tires screech as she speeds away.

Welcome to the high-stakes world of photo restoration.
"We have people who will literally steal the print off their grandma's wall, bring it in and tell us 'you've got one hour,'" said Frank Tona, store manager of Crown Camera in Redding, CA. "Grandma wouldn't let them take it. That's pretty common. You'd be surprised."

Photo restoration is an emotional business. Families often feud over old photographs, and satisfied customers shed tears on the spot. The last image of a lost loved one can be as priceless as memory itself. It has also become an increasingly profitable business, especially for the clients of Hollywood FotoFix, a family-owned company based near Salt Lake City that has become a leader in this growing field.

"It's huge," said Jim Schwarzbach, owner of Jim's Photo Lab in El Paso, TX. Jim's does about 60 photo restorations a month, all through Hollywood FotoFix. "Restorations are one of the last things left in this industry that have huge profit margins."

Traditionally, the opposite was true. The costs of setting up a digital lab, hiring talented artists, and training them on the latest software are prohibitive. Once the artists have developed their restoration skills, it becomes even more expensive to keep them on staff. And it takes time to get a restoration done right.

One enterprising employee at Jim's decided to put his Photoshop knowledge to work and surprised Schwarzbach by doing a restoration himself instead of sending it out. "I can save you money," he said. Asked how long it took, he gleefully responded "only six hours."

"I give him credit for seeing an alternative solution," Schwarzbach said. "He just didn't quite understand how inexpensive it is to get somebody else to do the work for you." Jim's sells restorations for between $49 and $129, depending on how much work is required. By outsourcing to Hollywood FotoFix, the lab's profit margins on restorations are "at least 50 percent." Other retailers have reported margins as high as 75 percent or more.

As the growth of digital photography and the increasing capabilities of consumer inkjet printers eat away at the traditional photo processing industry, those numbers should be getting your attention.

"Roll counts are never going to go up again," Schwarzbach said. "The salvation of photo labs is being able to take pictures further, to quote Kodak."

A stroll through Jim's Photo Lab is a testament to Schwarzbach's faith in the profitability of photo restoration. A poster in the window (provided by Hollywood FotoFix) advertises restorations, and before-and-after shots pepper the store. Schwarzbach even decorates his frame display with restorations, and his salespeople are trained to mention the service as often as possible.

Tim White, owner of Image Pros of Wisconsin in Oshkosh, has a different take on photo restorations. White doesn't expect them to overtake the traditional services of his retail and small commercial lab, so he doesn't actively promote the service. "It's a small part of overall operations, but it's an important part because it's a service that people expect a business like ours to be able to provide," White said.

"The thing that we like about it is that we're able to offer the service, get good quality and turnaround times and still be able to get a pretty good margin," White said. "Other out-lab services don't allow much margin."

According to Mark Long, President and CEO of Hollywood FotoFix, outsourcing is the perfect solution for labs that don't do many photo restorations, but want to offer the service to keep their clients satisfied. "You ought to be hooked up even if you're only doing one order a year," Long said. "It doesn't cost you anything."

There are no start-up fees. New customers can usually take advantage of special offers that give them their first order for free, or close to it. The equipment needed to get started is a computer, scanner and a color printer (if you don't have an archival printer, prints can also be outsourced). "If you're doing print-to-print, then you already have all the equipment you need," Long said.

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