Magazine Article



Pathways To Success

Why might the new players find a path to success that was denied the old management?

It will have two major burdens lifted from its shoulders:

The Fuji Debt

Larry Destro and others have indicated that the existence of the obligations to Fuji made it impossible to develop any new funds from banks or other sources. It essentially stopped any progress. Even prospective franchises shied away from a relationship because the future looked so grim, according to Larry.

Company Stores

At one time Moto had as many as 90 company-owned stores in operation. Larry Destro said that as recently as a year ago there were 42 such stores and Moto was losing a million dollars a year on them. Most were sold off to new or existing franchises and some were closed. There are 11 remaining at this writing and Harry Loyle said that the new operation will not be taking over any such stores. He said his entire focus of time and money will be to support and grow the franchise family.

Harry Loyle would not reveal any details of the business plan developed by the investors at this time. "We'll wait until after the court has approved the sale," he said.

I have learned, however, that the new operation will at least focus on two areas:


At present, according to Ron Mohney, VP and equipment guru, about 100 Moto stores have digital minilabs. About 80 are Fuji Frontiers, mainly model 370, and the remaining are Noritsu, models 2711, 3011 and 3101. One franchisee complained to me that he felt that Moto has been too slow to get all stores digitally equipped. A number of the Moto stores are on thin financial ice and it will be interesting to see what Harry can do to make it easy for them to get into digital. "Our goal is for 100% digital by the end of the year." That's a big bite and it will be fun to watch Fuji and Noritsu maneuver here.

Digital Portrait Studios

Portrait studios have long been a staple at Moto and the franchise agreement requires it. A number of Moto Stores, about 50, according to Ron, have advanced their program with a digital portrait setup and reports are that they are doing very well. The system consists of a digital camera and either a digital minilab for prints or some other digital printer. Key to the system is the Express Digital software package that is designed for the customer to preview exposures immediately and make purchase decisions. Print delivery in an hour.

Where To Go From Here

With the old Moto behind them, where do Fuji and Kodak fit into the picture of the new Moto?

On one hand is Fuji, having to swallow a $15 million pill. Hard feelings, anyone? Harry said, "My first priority is to establish a good relationship with Fuji." On Fuji's side is Bill Diminno, himself a former employee of Moto when he was president of Moto Photo East back in the 1980's. His job now is senior vp and general manager of Fuji's photo imaging group. In other words, he sells minilabs. And there are still some 150 Moto's without digital so the welcome mat should be out in Elmsford. "Our business dealings with the Moto franchises will go on un-interrupted," Bill said.

As for Kodak, I understand that the supply agreement that was executed with Moto will be picked up by the new Moto. Harry said that Kodak was very supportive of his business plan and the asset sale transaction. "We certainly do not want to interrupt the flow of Kodak merchandise to the stores," he said. Joe Diliberto, Kodak's GM and VP of the photo specialty channel, said of the possible new Moto, "They have a great challenge before them. They have Kodak's full support."

As for the franchises and their retail customers, including some 250,000 Moto Club members, it should be business as usual as the changeover from the old Moto to the new should be somewhat seamless. The franchises were told of the announcement in two conference calls made on separate days following the November bankruptcy announcement. I understand the statement from management didn't take too long and that the Q&A took most of the time with each call lasting well over an hour. Concerns? "What's in it for me?" "How do they see the future?" "Will there be a continuous flow of material to the stores?"

Nice to see that the individual entrepreneur doesn't lose his focus when the big picture guys are doing their thing.

In speaking to me privately, some were outspoken as to their criticism of old Moto saying they didn't know why it took so long for them to declare bankruptcy. Their hope is that the new Moto can get the program back on track and deliver on its promises. ptn

(For the record, I had a personal relationship with Moto Photo. In 1987, investors, my wife and I owned eight one-hour labs in New Jersey, Photo To Go, that we sold to Moto Photo. Mike Adler and Dave Mason were the Moto principals we dealt with. [Fortunately, the sale was for cash, not stock.] Subsequently, I joined the Moto staff as a vice president and remained in that position for less than two years. Since then my contact with Moto has been only periodic and in conjunction with my work. I also purchased a small amount of common stock along the way. Wallpaper, anybody?)ptn

Jerry Lansky is president of MiniLab Consultants, Inc.,
P.O. Box 475, Colts Neck, NJ 07722. Tel: (732) 946-8484.