FDD Talk: The Signarama Franchise Opportunity (Financial Performance Analysis, Estimated Costs, and Other Important Stuff You Need to Know)

In this FDD Talk 2016 post, you’ll learn the following:

• Section I – Background information on the Signarama franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Signarama franchise, based on Item 7 of the company’s 2016 FDD

• Section III – Presentation and analysis of Signarama’s financial performance representations, based on Item 19 of the company’s 2016 FDD, including information on the:

• 2015 average gross sales of Signarama Centers in operation for 3 full years or more as of December 31, 2015, which properly reported their 2015 sales, segmented into 2 categories: (1) Signarama Centers that employed a full-time outside sales person in 2015; and (2) Signarama Centers that did not employ a full-time outside sales person in 2015

• 2015 actual gross sales of the Center which attained the highest sales volume and of the Center with the lowest sales volume in 2015

• number of Signarama Centers that have achieved Hall of Fame membership status within the Signarama franchise system, and the criteria for membership in the Hall of Fame

• number of Signarama Centers included in the Million Dollar Circle in 2015, and the criteria for inclusion in the Million Dollar Circle

Section I – Background Information

From One Successful Franchise to Another

Signarama was founded by Roy Titus and his son Ray in 1986 in Farmingdale, New York. Prior to starting Signarama, Roy founded the successful national franchise Minuteman Press.

Through Minuteman Press, Titus developed close ties with 3M. In order to open the first Signarama, Titus used 3M’s new (at the time) vinyl film along with technology from a company called Gerber Scientific.

The first location, which was known as Speedy Signarama USA, was initially part of the Minuteman Press franchise company. Speedy Signarama quickly found success and became its own company. Franchising began a year later in 1987.

Through the years, Signarama has successfully expanded. Ray Titus still remains with the company as CEO and Jim Tatem, who produced signs at the first location, is the company’s President.

Today, Signarama has nearly 900 locations around the world.

Company Refresh

In a recent interview, Signarama’s President Jim Tatem said that Signarama had just completed a “refresh of the brand.” Tatem says that Signarama has changed its identity by modernizing its name, adding an icon, and implementing new technology.

Additionally, the company’s tagline has changed from “Signarama – Where the World Goes for Signs,” to “Signarama – The Way to Grow Your Business.” Signarama’s new tagline reflects the company’s desire to become more of a marketing and consulting company in addition to producing signage for clients.

Signarama has also started to heavily market wall graphics. The company’s stores are now able to offer wall decor by using the same equipment used for creating vehicle and window graphics. According to Tatem, both indoor and exterior materials are available for the wall graphics.

Tatem also said that many franchisees have started offering digital signage. These stores are using digital technology, LCD panels, and full-motion video screens to create dynamic signage for clients.

Future Growth Plans

Signarama has plans to further grow the company over the coming years. Currently, Signarama plans to open at least 65 new franchise locations in the U.S. in the next couple of years. The company is specifically targeting the Pacific Northwest and Central portions of the country.

Globally, Signarama is aiming to open 70 new stores and hopes to focus that growth in Asia, South America and Europe.

Toward the end of 2015, Signarama signed two master agreements, one in Canada and the other in the United Kingdom.

President Jim Tatem, sees Signarama growing to “1,500 high-profit, high-sales locations worldwide by 2018.” Tatem says that the growth will be fueled by:

• Increased staffing to an already strong marketing team.
• More research and development funding.
• Expanded regional support of franchisees.
• Development of additional core-product offerings.
• Better equipping master franchisees for additional expansion.
• Expanded outside sales teams for individual stores.

Another area fueling Signarama’s growth is conversions. Several independent sign shop operators are converting their stores into Signarama locations.

Consistently Ranking on Entrepreneur’s Franchise 500

Over the past decade, Signarama has consistently earned a spot on Entrepreneur’s annual Franchise 500 list. Signarama ranked No. 223 on the 2017 list. This is the lowest spot the company has earned in the last decade. This year’s ranking is down from 2016’s No. 76 spot. Signarama’s highest rank was No. 66 in 2010.

Section II – Estimated Costs

• Please click here for detailed estimates of Signarama franchise costs, based on Item 7 of the company’s 2016 FDD (updated).

Section III – Financial Performance Representations (Item 19, 2016 FDD) and Analysis