Signarama Franchise Costs: Estimated Initial Investment (Item 7, 2022 FDD)
If Equipment is Leased
1. Initial Franchise Fee: $49,500
- A $9,500 binder is due before Signarama begins its efforts in assisting you to locate a site for your franchise. The remaining $40,000 will be due at the signing of your franchise agreement. This $9,500 binder fee is refundable up to the time that you sign your franchise agreement.
- If you are an existing storeowner, you will pay a reduced franchise fee of $29,500 for your additional outlet.
2. Travel and Living Expenses While at Training School: $105 to $245 ($15 to $35 per day)
- Signarama provides your transportation to its Florida Corporate Headquarters where it holds its training. It also provides your hotel accommodations and one daily meal. The only cost that you will incur will be for your daily meals and your entertainment.
3. Real Estate (rental payments vary from location to location): $4,500 to $7,500
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- A typical new Signarama Center generally occupies 1,000 to 1,500 square feet of retail space, or 2,000 to 2,500 square feet in a light industrial space. Both require interior space with HVAC, lighting fixtures, electrical outlets, and telephone wiring installed for your business.
- Ample parking, signage opportunities, and street frontage all play an important part as well in the site selection process.
- Signarama will help you find your location and then you and Signarama must agree that it is the right place for you to open up your new business.
- At your option, Signarama’s affiliate, Franchise Real Estate, assists you in locating and negotiating the lease for the premises, with construction management, store design and layout, obtaining building renovation costs and, in some cases, will receive compensation from the landlord.
4. Real Estate Service Charge: $0 to $1,500
- If you opt not to use Franchise Real Estate, or if you retain another real estate services company to provide these services, you will be required to pay a service charge of $1,500 to Franchise Real Estate.
5. Leasehold Improvements: $0 to $47,000
- You will need to improve your Center premises to meet Signarama’s specifications and standards, including changes to flooring, ADA bathrooms, ceiling and walls, paint, sprinkler, HVAC, and electrical.
- The cost of leasehold improvements will depend on a number of factors including the layout and condition of the premises, labor and material costs, plans and permits in the market where your Center will be located, and the landlord’s contribution to the cost of the improvements.
- In some cases, Franchise Real Estate may be able to assist you in negotiating with the landlord to pay for all or a substantial portion of the improvements or to reimburse you on terms agreed to between you and the landlord.
- Some required improvements such as exterior signage, including installation, and window graphics are provided by Signarama as part of the equipment package.
- This range of costs assumes some construction allowances are provided by the landlord which are reimbursable to you based on terms agreed between you and the landlord. Regionality, labor, unions, and the condition of the space may also affect this range of costs.
6. Equipment Package Initial Payments and Processing Fee (if leased): $30,100
- You must acquire Signarama’s complete equipment package. You may obtain this equipment by paying cash or obtaining a lease or loan.
- Signarama does not guarantee the terms of any lease, loan, or note executed by you for the financing of your initial investment, equipment, or continuing the operation of your franchise.
- Signarama has arranged for equipment leasing through Navitas Credit Corporation (“Navitas”). If you choose to lease through Navitas, you will be required to pay approximately $3,117 monthly, plus any applicable sales and use taxes for a period of 60 months.
- Depending on your personal credit status, the leasing company may approve you for less than the full amount of the purchase price of the complete equipment package. If you are approved for a lesser amount, you will be required to pay the remaining balance, plus any applicable sales tax, directly to Signarama.
- There is a “purchase option” in the amount of $101 due at the end of the payment term.
- At the time of signing the lease, Navitas will require you to pay a security deposit of 20% or higher of the leased amount plus a processing fee of $399.
7. Insurance: $1,000 to $2,000
- You are obligated under your franchise agreement to hold certain business insurance policies including a comprehensive general liability policy, a policy covering “all risk” of physical loss, and additional policies as may be required under your local laws or ordinances.
- Signarama also recommends that you obtain hired and non-owned automobile insurance, cyber liability, data security, and technology errors and omissions insurance.
- The amount listed in this table reflects Signarama’s estimate of basic insurance for your first 6 months of operation.
8. Security Deposit/Utility Deposits/Licenses: $0 to $3,000
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- You will need to provide deposits for your real estate and your utilities. The amounts of these deposits will vary depending on the practices of your landlord and/or utility company.
- You must also register your business with the local county along with a fictitious name and other requirements of your local or state government. Each of these entities may charge a fee for your registration and/or certain taxes.
9. Additional Funds (0 to 6 months): $35,000 to $55,000
- You will need capital to support your ongoing expenses, e.g. payroll and utilities, to the extent that these costs are not covered by sales revenue when you first open. This figure does not include sums necessary for living or personal expenses nor payments for your debt service.
- Signarama’s estimate of the capital you will need to support your ongoing expenses during your start-up phase is based on Signarama’s 34 years of experience in the business.
10. Totals: $120,205 to $195,845
- These amounts are based on Signarama’s estimate of average costs and market conditions prevailing as of the date of the Disclosure Document and its 35 years of experience in the business.
If Equipment is Purchased
- The total estimated initial investment necessary to begin operation of a Signarama franchise, if equipment is purchased, ranges from $240,604 to $316,244.