Signarama Franchise: Average Sales ($658K) vs. Cost ($120K-$195K)

In this exclusive Franchise Chatter FDD Talk post, you’ll learn the following:

Section I – Estimated initial investment (franchise costs) for a Signarama franchise, based on Item 7 of the company’s 2022 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a Signarama franchise, based on Items 5 and 6 of the company’s 2022 FDD

Section III – Number of franchised and company-owned Signarama outlets at the start of the year and the end of the year for 2019, 2020, and 2021, based on Item 20 of the company’s 2022 FDD

Section IV – News updates on the Signarama franchise opportunity

Section V – Presentation and analysis of Signarama’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2022 FDD, including information on the:

• 2021 average and median gross sales for Signarama Centers in the United States in operation for 2 full years or more as of December 31, 2021, which properly reported their sales for each of the 12 months in 2021, segmented into 2 categories: (1) Centers that employed a full-time outside sales person in 2021; (2) Centers that did not employ a full-time outside sales person in 2021

• 2021 highest and lowest gross sales for Signarama Centers in the United States that employed an outside sales person in 2021 and properly reported their sales for each of the 12 months in 2021

• 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 2021, and the criteria for inclusion in the Million Dollar Circle

Section VI – Key ratios, comparables, computations, and analyses for the Signarama franchise opportunity (exclusive content for Platinum subscribers)

Section I – Signarama Franchise Costs

• Signarama franchise costs (if equipment is leased), based on Item 7 of the company’s 2022 FDD:

• Initial Franchise Fee:  $49,500
• Travel and Living Expenses While at Training School:  $105 to $245 ($15 to $35 per day)
• Real Estate (rental payments vary from location to location):  $4,500 to $7,500
• Real Estate Service Charge:  $0 to $1,500
• Leasehold Improvements:  $0 to $47,000
• Equipment Package Initial Payments and Processing Fee (if leased):  $30,100
• Insurance:  $1,000 to $2,000
• Security Deposit/Utility Deposits/Licenses:  $0 to $3,000
• Additional Funds (0 to 6 months):  $35,000 to $55,000
• Total Estimated Signarama Franchise Costs:  $120,205 to $195,845

Section II – Signarama’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Signarama’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2022 FDD:

• Initial Franchise Fee:  $49,500
• Royalty:  the greater of $500 per month or 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
• Marketing Fund Fee:  $700 or 1% of gross sales (whichever is greater, up to a maximum of $1,500) per month or Signarama’s then-current fee

Section III – Number of Franchised and Company-Owned Signarama Outlets

Franchised

2019

• Outlets at the Start of the Year:  682
• Outlets at the End of the Year:  707
• Net Change:  +25

2020

• Outlets at the Start of the Year:  707
• Outlets at the End of the Year:  695
• Net Change:  -12

2021

• Outlets at the Start of the Year:  695
• Outlets at the End of the Year:  703
• Net Change:  +8

Company-Owned

2019

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2020

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2021

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

Section IV – News Updates on the Signarama Franchise

• Signarama Announces Small Business Sign Giveaway Contest with $18,000 Worth of Sign Packages

• Signarama Franchisees Fired Up After Annual National Convention

• Camp Signarama Announced as Theme of 2022 Signarama Convention in Atlanta

• Signarama Ranked No. 130 on Entrepreneur’s 2023 Franchise 500 List

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Signarama Franchise (Item 19, 2022 FDD)

• The financial performance representation information in this Item 19 includes certain financial performance information relating to Signarama Centers’ operation in calendar year 2021.

• Signarama obtained 100% of the average gross sales data for the Centers listed in the Center Sales tables and the other financial performance representations included in this Item 19 from monthly sales reported to Signarama by the Centers. The monthly sales reports have not been audited by certified public accountants nor has Signarama sought to independently verify their accuracy for purposes of the financial performance representations.

• Not all Centers properly reported sales in 2021.

• The financial performance representations include average gross sales of Centers for the year 2021. “Gross sales” means total reported sales revenue, excluding any county or state sales tax collected.

Part 1 – Center Sales Study (Centers in Operation for 2 Years or More)

• In this Center Sales Study, Signarama discloses the average gross sales in 2021 of Centers in the United States in operation for 2 full years or more as of December 31, 2021, which properly reported their sales for each of the 12 months in 2021, segmented into 2 categories: (1) Centers that employed a full-time outside sales person in 2021; (2) Centers that did not employ a full-time outside sales person in 2021.

• It has been Signarama’s experience that having a full-time outside sales person is an essential part of a successful marketing program and the Signarama system format. Signarama has always recommended that its franchisees employ a full-time outside sales person. It requires new franchisees to hire an outside sales person prior to commencing their Signarama business.

Centers With Full-Time Outside Sales Person

• Number of Centers:  112
• Average Gross Sales:  $1,117,539
• Centers That Met or Exceeded Average Gross Sales:  26.8%
• Median Gross Sales:  $822,372

Centers Without Full-Time Outside Sales Person

• Number of Centers:  215
• Average Gross Sales:  $419,619
• Centers That Met or Exceeded Average Gross Sales:  37.2%
• Median Gross Sales:  $328,717

Total Centers

• Number of Centers:  327
• Average Gross Sales:  $658,661
• Centers That Met or Exceeded Average Gross Sales:  32.7%
• Median Gross Sales:  $446,809

• On average, the Centers in the Center Sales financial performance representations in Part 1 have been operating for 11.35 years. 42% of the Centers included have been in operation for more than 11.35 years and 58% have been in operation for less than 11.35 years.

Part 2 – Highest Volume and Lowest Volume Center Sales of Centers with Outside Sales Person

• In this Highest Volume and Lowest Volume Center Sales financial performance representations, of the Centers that employed an outside sales person in 2021, Signarama discloses the highest and lowest gross sales of the Centers in the United States which properly reported their sales for each of the 12 months in 2021.

Highest Sales Volume Center

• Number of Centers:  1
• Gross Sales:  $6,111,784
• Actual Number of Years in Operation:  16

Lowest Sales Volume Center

• Number of Centers:  1
• Gross Sales:  $119,720
• Actual Number of Years in Operation:  2

• The Highest Volume and Lowest Volume Center Sales financial performance representation is based on a population of 112 Centers.

Part 3 – Hall of Fame Centers

• In this Hall of Fame Centers financial performance representation, Signarama discloses: (1) the criteria for membership in the Hall of Fame; and (2) the number of Centers that have achieved Hall of Fame membership status within the Signarama franchise system.

• Designation as a Hall of Fame Center serves to recognize Centers for their outstanding achievement in business and exemplary overall performance as a Signarama Center.

• Members of the Hall of Fame are nominated into the Hall of Fame by their peers (other franchisees). In order to be nominated, the Center and its owner must meet all of the following criteria:

• Center has operated for 6 years or more;
• Franchisee is a team player;
• Franchisee serves as a Mentor to other franchisees;
• Center has attained gross sales of $1,500,000 or more in 2 consecutive years;
• Franchisee has attended at least 1 convention or regional meeting in each of the 3 years prior to nomination;
• Center is a current member of the Marketing Fund*; and
• Center location is brand compliant.

• *All new franchisees are required to become members of the Marketing Fund; however, when the Marketing Fund was originally established and for a period of years after implementation of the Marketing Fund, membership was optional.

• Hall of Fame Members as of December 31, 2021: 78 Centers

• Of the 78 Centers that have been nominated into the Hall of Fame, 61 Centers were located in the United States and 17 in other countries.

Part 4 – Million Dollar Circle Centers

• In this Million Dollar Circle Centers financial performance representation, Signarama discloses (1) the criteria for inclusion in the Million Dollar Circle; and (2) the number of Centers included in the Million Dollar Circle in 2021.

• Criteria for inclusion in the Million Dollar Circle is $1,000,000 in gross sales in the calendar year of 2021.

• A total of 77 Centers qualified for inclusion in the Million Dollar Circle in 2021.

• On average, the 2021 Million Dollar Circle Centers have been in operation for 15.27 years. 59% of the Million Dollar Circle Centers have been in operation for more than 15.27 years and 41% have been in operation for less than 15.27 years.

• Of the 77 Centers that qualified for inclusion in the 2021 Million Dollar Circle, 58 Centers were located in the United States, 11 in Australia, 4 in New Zealand, 3 in France, and 1 in South Africa.

• Some outlets have sold this amount. Your individual results may differ. There is no assurance that you’ll sell as much.

Section VI – Signarama Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️