The local printer needs to aggressively network to two groups, the graphic designer and the local postal stores and signing them up as partner/affiliates (sound familiar). This will require very attractive commissions be paid to the partners; so attractive that they wont want to do it with anyone else. As it is said in the venture capital business, "Do you want to own a percentage of something or 100% of nothing". It's a strong argument. This is one of those areas where I can tell everyone the answer, and for one reason or another (can't execute, too busy, don't have talents beyond retail, etc), its doesn't happen. Let's just say they need to begin to collaborate with each other more aggressively.
The franchisors should be all over this as they need to help (save) their franchisees. BetaGraphics (our make believe franchisor) needs to do more than educate, but actually push their local franchise into partnering with local graphic artists and postal stores, basically offering satellite franchises (BizOps) and relationships to the local BetaGraphics. These people are looking for a solution that the local quick printer has.
What you read is the why our business model at LightsOnGraphics exists. A player needs to unify the fragmented local market or the local market will ultimately disappear causing everyone to lose; quality will suffer (as it already is) and prices will ultimately rise.