Signarama: $798K Average Sales vs. $120K-$195K Franchise Cost

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 2023 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 2023 FDD

Section III – Number of franchised and company-owned Signarama outlets at the start of the year and the end of the year for 2020, 2021, and 2022, based on Item 20 of the company’s 2023 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 2023 FDD, including information on the:

• 2022 average and median gross sales for Signarama Centers in the United States in operation for 2 full years or more as of December 31, 2022, which properly reported their sales for each of the 12 months in 2022, segmented into 2 categories: (1) Centers that employed a full-time outside sales person in 2022; (2) Centers that did not employ a full-time outside sales person in 2022

• 2022 highest and lowest gross sales for Signarama Centers in the United States that employed an outside sales person in 2022 and properly reported their sales for each of the 12 months in 2022

• 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 Circle of Excellence (Gold Tier, Platinum Tier, and Diamond Tier) in 2022, and the criteria for inclusion in the Circle of Excellence

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 2023 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 2023 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

2020

• Outlets at the Start of the Year:  694
• Outlets at the End of the Year:  677
• Net Change:  -17

2021

• Outlets at the Start of the Year:  677
• Outlets at the End of the Year:  674
• Net Change:  -3

2022

• Outlets at the Start of the Year:  674
• Outlets at the End of the Year:  669
• Net Change:  -5

Company-Owned

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

2022

• 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 Enhances Training With the Launch of the Masters Academy Training Series and Renovation of Its Training Facility

• Signarama Unveils Studio Model and Masters Academy

• Signarama Convention Draws Record-Breaking Attendance

• The Sign of Success: How Signarama Franchisees Are Growing Their Business and Boosting Profits

• Spreading Positivity: Signarama to Debut The Kind Sign Collection on November 13 for World Kindness Day

• Signarama Ranked No. 156 on Entrepreneur’s 2024 Franchise 500 List

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Signarama Franchise (Item 19, 2023 FDD)

• The financial performance representation information in this Item 19 includes certain financial performance information relating to Signarama Centers’ operation in calendar year 2022.

• 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 2022.

• For 2022, of the 378 US locations, 321 were eligible and 57 were deemed non-eligible. Of the non-eligible locations, 29 were excluded due to not completing 2 full calendar years and 28 were excluded due to improper sales reporting.

• The financial performance representations include average gross sales of Centers for the year 2022. “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 2022 of Centers in the United States in operation for 2 full years or more as of December 31, 2022, which properly reported their sales for each of the 12 months in 2022, segmented into 2 categories: (1) Centers that employed a full-time outside sales person in 2022; (2) Centers that did not employ a full-time outside sales person in 2022.

• 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:  192
• Average Gross Sales:  $1,090,392
• Centers That Met or Exceeded Average Gross Sales:  29.2%
• Median Gross Sales:  $795,500

Centers Without Full-Time Outside Sales Person

• Number of Centers:  129
• Average Gross Sales:  $376,467
• Centers That Met or Exceeded Average Gross Sales:  38.0%
• Median Gross Sales:  $322,266

Total Centers

• Number of Centers:  321
• Average Gross Sales:  $798,517
• Centers That Met or Exceeded Average Gross Sales:  30.5%
• Median Gross Sales:  $547,063

• On average, the Centers in the Center Sales financial performance representations in Part 1 have been operating for 12.13 years. 42% of the Centers included have been in operation for more than 12.13 years and 58% have been in operation for less than 12.13 years.

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

• In Signarama’s Highest Volume and Lowest Volume Center Sales financial performance representations, of the Centers that employed an outside sales person in 2022, 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 2022.

Highest Sales Volume Center

• Number of Centers:  1
• Gross Sales:  $6,540,656
• Actual Number of Years in Operation:  17.5

Lowest Sales Volume Center

• Number of Centers:  1
• Gross Sales:  $202,172
• Actual Number of Years in Operation:  2.6

• The Highest Volume and Lowest Volume Center Sales financial performance representation is based on a population of 196 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, 2022: 82 Centers

• Of the 82 Centers that have been nominated into the Hall of Fame, 62 Centers were located in the United States and 20 in other countries.

Part 4 – Circle of Excellence Centers

• In this Circle of Excellence Centers financial performance representation, Signarama discloses (1) the criteria for inclusion in the Circle of Excellence; and (2) the number of Centers included in the Circle of Excellence in 2022.

• Criteria for inclusion in the Circle of Excellence is $1,000,000 in gross sales, in their local currency, in the calendar year of 2022.

• A total of 136 Centers qualified for inclusion in the Circle of Excellence in 2022.

• On average, the 2022 Circle of Excellence Centers have been in operation for 12.52 years. 43% of the Circle of Excellence Centers have been in operation for more than 12.52 years and 57% have been in operation for less than 12.52 years.

• Of the 136 Centers that qualified for inclusion in the 2022 Circle of Excellence, 83 Centers were located in the United States, 30 in Australia, 7 in Canada, 14 in New Zealand, and 2 in France. Signarama also had 25 stores in Namibia and South Africa that made over $1,000,000 in gross sales in their local currency.

• For Signarama centers in the United States, Signarama awards stores in the Circle of Excellence based off three different tiers based off their gross sales in 2022. (1) Gold tier centers earned over $1,000,000 in gross sales in 2022; (2) Platinum centers earned over $2,500,000 in gross sales for 2022, and (3) Diamond tier centers earned over $3,500,000.

Centers in Gold Tier

• Number of Centers:  69
• Average Number of Years in Business:  12.8
• Average Gross Sales:  $1,371,242

Centers in Platinum Tier

• Number of Centers:  7
• Average Number of Years in Business:  18.5
• Average Gross Sales:  $3,082,304

Centers in Diamond Tier

• Number of Centers:  7
• Average Number of Years in Business:  20.2
• Average Gross Sales:  $4,810,679

Total Centers

• Number of Centers:  83
• Average Number of Years in Business:  13.9
• Average Gross Sales:  $1,805,622

• 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) ⬇️