In this FDD Talk post, you’ll learn the following:
- Section I – Background information on the FASTSIGNS franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a FASTSIGNS franchise, based on Item 7 of the company’s 2017 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a FASTSIGNS franchise, based on Items 5 and 6 of the company’s 2017 FDD
- Section IV – Presentation and analysis of FASTSIGNS’ financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
- 2016 average gross sales for the 541 FASTSIGNS Centers; the 500 Full-Service FASTSIGNS Centers; the 125 Full-Service FASTSIGNS Centers in the top quartile; and the top 25 Full-Service FASTSIGNS Centers that were open and in continuous operation in the United States during the entire calendar year ending December 31, 2016
- 2016 average gross sales for the 23 Full-Service FASTSIGNS Centers that opened in calendar year 2015, the 20 Full-Service FASTSIGNS Centers that opened in calendar year 2014, and the 17 Full-Service FASTSIGNS Centers that opened in calendar year 2013
- 2016 average gross sales for FASTSIGNS franchise owners who (i) were in business for at least two years prior to January 1, 2016; (2) reported gross sales for each of the 12 months in 2016; and (3) advised FASTSIGNS that they employed a full-time outside sales representative during this period who was not one of the franchise principals of the Center
- average total sales generated by the 34 outside sales professionals hired by FASTSIGNS franchisees in 2014, and 36 outside sales professionals hired by FASTSIGNS franchisees in 2015, that completed 12 consecutive months in the outside sales professional position, during their first 12 months in that position
- 2016 average sales, cost of goods sold, labor expenses (including franchisee principal), advertising expenses, auto expenses, facility expenses, equipment expenses, general and administrative expenses, and EBITDA for the 288 FASTSIGNS Centers included in the 2016 Financial Benchmarking Survey
Section I – Background Information
15 Things You Need to Know About the FASTSIGNS Franchise
Secures Up to $21 Million to Continue Rapid Growth Nationwide
1. At the end of 2017, FASTSIGNS announced that it had partnered with ApplePie Capital to offer new and existing franchisees up to $21 million in debt capital to drive the brand’s expansion across the U.S.
2. FASTSIGNS experienced a record-breaking year in 2017 with 35 centers opened in the U.S. and Canada. The company also signed 44 franchise agreements by the end of 2017 and said that it had plans to open at least 45 new centers in 2018.
3. Catherine Monson, CEO of FASTSIGNS International, Inc., said, “2017 has been another record year for FASTSIGNS, in every metric. We are experiencing continued growth both in the U.S. and abroad. As we look toward future growth, with both new and existing franchisees, ApplePie Capital is the ideal partner to support our aggressive expansion goals.”
4. Monson added, “ApplePie understands the franchise business model and has developed a comprehensive lending program designed to address the specific needs of FASTSIGNS’ franchisees. ApplePie Capital’s decision to extend up to $20 million of credit to FASTSIGNS franchisees will help our franchisees open new centers, remodel existing locations, provide capital for acquisitions, and assist with refinancing.”
Signs Master Franchise Agreement to Accelerate Global Expansion
5. At the start of October 2017, FASTSIGNS announced that it had signed a Master Franchise Agreement with the Famalco Group to open 16 new centers across Malta, Greece, and Italy over the next several years. The Famalco Group said that it is confident that FASTSIGNS will succeed in these new international markets.
6. Hermann Mallia, business development director at Famalco Group, said, “When seeking to reinforce our marcom division through collaborations with external partners, FASTSIGNS was the obvious choice. Their wealth of knowledge in the industry, business planning and technical support, combined with Famalco Group’s passion for growth and innovation were the ideal match. Through our franchise agreement with FASTSIGNS, we have invested in the industry’s most recognized brand which enables us to bring new concepts of visual communications into the markets we shall operate in.”
7. FASTSIGNS has been growing rapidly both domestically and internationally. At the time of the announcement, FASTSIGNS had already opened 25 new stores in the U.S., Canada, and England. The company had also signed 26 new franchise agreements to develop new, co-branded, and conversion locations worldwide.
8. In addition to the new centers in Malta, Greece, and Italy, FASTSIGNS has plans to expand its presence in Australia, Mexico, Saudi Arabia, the United Arab Emirates, Canada, Puerto Rico, Grand Cayman, and the United Kingdom. FASTSIGNS is also seeking qualified candidates in international target markets such as Brazil, Quebec, North Africa, Southeast Asia, India, Europe, and Latin America.
CEO Receives 2017 Distinguished Women Award
9. In early November 2017, Catherine Monson, CEO of FASTSIGNS International, Inc., received the 2017 Distinguished Women Award presented by Northwood University. The award was created in 1970 by the Northwood University Board of Trustees to honor role models by recognizing the enormous contributions women make to communities, businesses, nonprofit organizations, and public and private sector services worldwide.
10. Honorees share a dedication to higher education and represent the values Northwood University espouses for its own students: commitment to free enterprise, the partnership of arts and business, and the management of global commerce.
11. Upon receiving the award, Monson said, “It’s an honor to be recognized among Northwood University’s Distinguished Women Award recipients, both past and present. Northwood University is dedicated to developing future leaders of a global free enterprise society and understands the important role that education plays in developing these future leaders. I am excited about meeting the students and being part of this year’s Distinguished Women celebration.”
12. FASTSIGNS was founded in 1985 by Gary Salomon and Bob Schanbaum in Dallas, Texas. Encouraged by the success of their first location, Salomon and Schanbaum started franchising FASTSIGNS a year later. Within three years, FASTSIGNS grew to 16 locations, but Schanbaum passed away. Salomon pushed forward in honor of Schanbaum and continued to grow the company.
13. By the start of the 1990s, FASTSIGNS had 150 locations; its first international store opened in 1991. Over the next decade, FASTSIGNS continued to grow globally and in 2003, the company was acquired by Roark Capital Group. Since 2014, FASTSIGNS has been owned by Levine Leichtman Capital Partners.
14. Today, there are over 675 FASTSIGNS locations in nine countries.
Entrepreneur’s Franchise 500
15. FASTSIGNS has ranked on Entrepreneur’s annual Franchise 500 list every year for the past 10 years. The brand’s highest rank was No. 79 in 2013, while its lowest rank was No. 138 in 2008.
Section II – Estimated Costs
- Please click here for detailed estimates of FASTSIGNS franchise costs, based on Item 7 of the company’s 2017 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on FASTSIGNS’ initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2017 FDD.
Section IV – Financial Performance Representations (Item 19, 2017 FDD) and Analysis
- On December 31, 2016, there were 640 FASTSIGNS Centers open and in operation, of which 67 were international. 541 FASTSIGNS Centers were open and in continuous operation in the United States during the entire calendar year ending December 31, 2016. The analysis set forth below is based solely on the average yearly gross sales for those 541 FASTSIGNS Centers for 2016.
- Of the 541 FASTSIGNS Centers open and in continuous operation in the United Slates during the entire calendar year ending December 31, 2016, 500 FASTSIGNS Centers were “Full-Service” Centers. 17 FASTSIGNS Centers were “Satellite” Centers, and 24 FASTSIGNS Centers were “Co-Brand” Centers.
- A “Full-Service” Center is the FASTSIGNS Center that the franchisor typically offers under the Franchise Disclosure Document. It includes production equipment and is a stand-alone business.
- A “Satellite” Center is a FASTSIGNS Center without any production equipment and is owned by a franchisee who also owns a Full-Service FASTSIGNS Center. The franchisor no longer offers Satellite Centers for sale.
- A “Co-Brand” Center is a FASTSIGNS Center that is operated from and within an existing, independent, and complementary business.
- The following tables refer to “Gross Sales.” “Gross Sales” includes cash and credit sales as well as any goods or services received by the franchisee in exchange for goods and services sold at the FASTSIGNS Center. “Gross Sales” does not include sales or use taxes.
Part 1 – Systemwide Gross Sales – Centers Operating for the Entire 2016 Calendar Year
- The following Table provides systemwide Gross Sales for all operational FASTSIGNS Centers and the Gross Sales for Full-Service Centers.