If you are considering a Signarama franchise, don’t get blindsided by these 13 important franchise fees (from the initial franchise fee, to the royalty fee, to 11 other fees found in Items 5 and 6 of Signarama’s 2016 FDD).
1. Initial Franchise Fee: $49,500
- All franchisees purchasing a new Signarama franchise pay an initial franchise fee of $49,500 when they enter into Signarama’s Franchise Agreement except as noted below.
- Prior to signing the Franchise Agreement, you will be required to pay a $5,500 deposit, commonly referred to as a “binder.” This binder is fully refundable if you do not purchase a Signarama franchise.
- After Signarama receives your binder, it will begin the search for your Center location.
- When you enter into your Franchise Agreement, the binder is applied against the initial franchise fee leaving a remainder of $44,000, which must be paid at the time of signing the Franchise Agreement.
- The initial franchise fee is non-refundable.
- If you are an existing storeowner, you will pay a reduced non-refundable franchise fee of $25,500 for an additional outlet.
- If you are converting an existing sign business to the Signarama brand, you will pay a non-refundable franchise fee of $49,500.
- Eligible United States military veterans will receive a discount of at least 10% of the standard franchise fee or transfer fee. The amount of the discount will vary based on the length of the veteran’s active military service: 10% for active service of less than 11 years; 25% for active service of 11-20 years; and 50% for active service of more than 20 years.
- An eligible veteran is a veteran who has received an honorable discharge.
- Owners in good standing of Signarama’s affiliated brands (EmbroidMe, TBA, SuperGreen, Experimac, JSS, and VTX) purchasing a Signarama franchise will pay a non-refundable franchise fee of $25,500.
2. Equipment: $12,500 to $145,280
- You will need to purchase or lease equipment prior to opening your Signarama Center. The current cost of the equipment (if purchased) is $145,280 and is non-refundable.
- If you lease your equipment, you will be required to pay a refundable down payment of $12,500 at the time of signing the Franchise Agreement, which will be refunded to you upon funding of your lease by the leasing company or credited against any down payment required by the leasing company.
3. Pre-Opening Assistance: $0 to $2,500
- Signarama’s affiliate, Franchise Real Estate, assists Signarama franchisees with site selection, lease negotiation, construction management, store design and layout, and assistance with obtaining building renovation costs.
- Franchise Real Estate may be compensated by your landlord for their services, but if you retain another real estate company for this assistance, then you will be required to pay a service charge to Franchise Real Estate for their pre-opening assistance of $2,500.
- This service charge will be required to be paid prior to opening your Signarama Center and is non-refundable.
- If you are purchasing a resale franchise or if you are converting an existing sign business to the Signarama brand, Signarama will evaluate your equipment needs and your costs for equipment will be less.
4. Cost of Re-Brand or Refresh (resale franchise): $2,500 to $9,000
- If you are purchasing a resale franchise, you will be required to rebrand or refresh the branding of the existing Signarama Center you are purchasing. This cost is approximately $2,500 to $9,000.
5. Data Conversion Fee (resale franchise): $250 to $450
- If purchasing a resale franchise, you will not be required to pay an initial Electronic Point-of-Sale (EPOS) System software license fee (a fee that is included in the cost of equipment disclosed above), but you will be required to pay a data conversion fee. This fee is $250 to $450 if you purchase a resale franchise and is paid prior to the data conversion.
6. Data Migration Services, Membership in Marketing Fund, User and Software Licenses (conversion franchise): $2,900
- If you are converting an existing sign business to the Signarama brand, at the time of signing the Franchise Agreement, you pay a fee of $2,900 for data migration services to transfer your point-of-sale system data to Signarama’s EPOS System, to establish your membership in the Marketing Fund, and for user and software licenses.
- These fees and payments are non-refundable.
The fees listed below are other recurring or isolated fees or payments that you are required to pay to Signarama or its affiliates, or that it imposes or collects in whole or in part on behalf of a third party.
All of these fees and payments are non-refundable and are charged uniformly to all franchisees.
7. Royalty: 6% of your gross sales up to $600,000, 4% of your gross sales from $600,001 to $1,000,000, and 2% of your gross sales over $1,000,000
- Due Date: Payable monthly by the 2nd day of the next month.
- Gross sales include all revenue from the franchise location. Gross sales do not include sales tax.
- The Franchise Agreement requires you to pay to Signarama a continuing royalty which is payable monthly. You are prohibited from offsetting or deducting this required royalty payment in any form or fashion.
- Signarama requires you to pay these amounts through electronic funds transfer or automatic withdrawal, which will be withdrawn from your bank account on the 2nd day of each month.
- Signarama has a unique royalty incentive program for the benefit of its franchisees. If eligible, you will only pay 6% royalty on your annual gross sales up to $600,000 of gross sales, 4% on your annual gross sales from $600,001 to $1,000,000, and 2% on your annual gross sales in excess of $1,000,000 (Signarama calls this a cap).
- Eligibility for this program is based on whether or not you are in compliance with the terms of your Franchise Agreement, especially your timely submission of your monthly royalty statements and payments.
- Please note that the caps are subject to periodic review and change.
8. Transfer/Training: $29,500 or then-current fee
- Due Date: Prior to consummation of transfer.
- Payable by the Seller from the proceeds of the sale of the franchise.
- Signarama may increase the transfer fee during the term of the Franchise Agreement. The transfer fee has been increased in the past at the same time the initial franchise fee has been increased. There is no cap on the amount of the transfer fee.
9. Marketing Fund Fee: $500 or 1% of gross sales (whichever is greater, up to a maximum of $1,500) per month during the 1st year of sign center operations; $600 or 1% of gross sales (whichever is greater, up to a maximum of $1,500) per month during the 2nd year of sign center operations; and $700 or 1% of gross sales (whichever is greater, up to a maximum of $1,500) per month during the 3rd year of sign center operations; and thereafter, Signarama’s then-current fee
- Due Date: Payable monthly commencing the first month sign center is open.
- This Marketing Fee is paid to Sign*A*Rama Advertising Fund, Inc., a Florida non-profit corporation, controlled by Signarama franchisees, and franchisees establish the amount of the fee.
- This fee will be used for national, regional, and local advertising, Internet advertising, search engine optimization, and web hosting and development.
10. Point-of-Sale Software License Fee: $139 per month or then-current fee
- Due Date: Payable monthly commencing first month sign center is open.
- Payable to designated vendor.
- The monthly fee is paid to the licensor of the software for ongoing maintenance and support of the software for up to 10 users. The fee increases by $10 for each additional user added after 10 users. The licensor may increase its fees in the future.
11. Employee Training Fee: $225 or then-current fee per person attending training, plus travel, hotel, and meal expenses
- Due Date: Payable prior to start of training program.
- Payable to Signarama, airlines, hotels, restaurants.
- A training fee is charged if you send your employees to Signarama’s training program or if you bring additional persons with you to Signarama’s initial training program.
12. Renewal Fee: $1,500
- Due Date: 30 days before renewal.
- To cover costs of closing and processing paper work.
13. Audit: cost of audit to $300 per day, plus 10% interest on underpayment
- Due Date: Payable at the time of audit.
- Payable only if an audit shows an understatement of at least 2% on any one month’s reports.
- You give Signarama the right at all times to examine your financial books, bank accounts, and records relating to the Signarama Center together with the right to make copies.
- This audit will be at Signarama’s sole expense; provided, however, you will pay the reasonable cost of any audit where this audit discloses that you have paid less than 98% of your royalties in any one month.
- You will be required to maintain all of your financial records for a period of six years. In addition, you will be required to provide Signarama with a profit and loss statement monthly. You must also send to Signarama financial reports in the form that it requests (balance sheet, profit and loss statement, etc.) annually.
- If your franchise is located in a jurisdiction where the franchise fee, royalty, or any other fees paid by you to Signarama are subject to a tax, then you will be required to pay those taxes. You must file all state, federal, and local financial reports and returns as may be required by law relative to operating your Signarama Center. Signarama has the right to request copies of all of these reports or returns.