FASTSIGNS: $1.02M Average Sales vs. $240K-$310K Franchise Cost

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

Section I – Estimated initial investment (franchise costs) for a FASTSIGNS franchise, based on Item 7 of the company’s 2023 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a FASTSIGNS franchise, based on Items 5 and 6 of the company’s 2023 FDD

Section III – Number of franchised and company-owned FASTSIGNS 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 FASTSIGNS franchise opportunity

Section V – Presentation and analysis of FASTSIGNS’ financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2023 FDD, including information on the:

• 2022 average, median, high, and low gross sales for the 665 FASTSIGNS Centers; the 622 Full-Service FASTSIGNS Centers; the 166 Full-Service FASTSIGNS Centers in the top quartile; the 166 Full-Service FASTSIGNS Centers in the lowest quartile; and the 28 Co-Brand FASTSIGNS Centers that were open and in continuous operation in the United States during the entire calendar year ending December 31, 2022

• 2022 average gross sales for FASTSIGNS franchise owners who (i) were in business for at least one year prior to January 1, 2022; (2) reported gross sales for each of the 12 months in 2022; 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 78 outside sales professionals hired by FASTSIGNS franchisees in 2020 and the 59 outside sales professionals hired by FASTSIGNS franchisees in 2021, that completed 12 consecutive months in the outside sales professional position, during their first 12 months in that position

• 2022 average gross 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 338 reporting FASTSIGNS Centers included in the 2022 Financial Benchmarking Survey, the 85 reporting FASTSIGNS Centers in the top 25% based on profitability, and the 85 reporting FASTSIGNS Centers in the lowest 25% based on profitability

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

Section I – FASTSIGNS Franchise Costs

• FASTSIGNS franchise costs (for full-service centers), based on Item 7 of the company’s 2023 FDD:

• Initial Franchise Fee:  $49,750
• Leasehold Improvements:  $21,000 to $37,600
• Furniture and Fixtures:  $10,781 to $12,834
• Deposits:  $2,912 to $4,537
• Telephone and Networking:  $1,287 to $6,210
• Decor and Graphics:  $1,902 to $1,956
• Tools, Supplies, and Substrate Cutter:  $10,318 to $10,429
• Production Equipment:  $64,880 to $67,018
• Commercial Display, Laser Measurement Solution, and a Chromebox with Licenses:  $1,539 to $1,557
• Center Management System:  $5,175 to $5,561
• Signage:  $2,375 to $5,307
• Initial Inventory:  $2,703 to $2,750
• Architectural/Engineering:  $0 to $4,900
• Initial Advertising:  $14,500
• Travel, Lodging, Meals, and 2 Employees’ Costs for Initial Training:  $7,427 to $11,523
• Administrative Supplies:  $827 to $1,662
• Business Licenses and Permits:  $79 to $600
• Insurance Deposits and Premiums (first 3 months):  $625 to $1,125
• Professional Fees:  $2,000 to $5,750
• Additional Funds:  $40,000 to $65,000
• Total Estimated FASTSIGNS Franchise Costs:  $240,080 to $310,569

Section II – FASTSIGNS’ Initial Franchise Fee, Royalty Fee, and Marketing Fee

• FASTSIGNS’ initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2023 FDD:

• Initial Franchise Fee:  $49,750
• Service Fee:  3% of Gross Sales the first year. 6% of Gross Sales beginning the second year through the end of the term of the Franchise Agreement. If you are a new Center, Conversion Center, or Co-Brand Center, you will pay the greater of $1,250 or 6% of Gross Sales beginning the 13th month through the end of the term of the Franchise Agreement or the Co-Brand Franchise Agreement.
• Ad Fee:  1% of Gross Sales the first year. 2% of Gross Sales beginning the second year through the end of the term of the Franchise Agreement.

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

Franchised

2020

• Outlets at the Start of the Year:  641
• Outlets at the End of the Year:  659
• Net Change:  +18

2021

• Outlets at the Start of the Year:  659
• Outlets at the End of the Year:  672
• Net Change:  +13

2022

• Outlets at the Start of the Year:  672
• Outlets at the End of the Year:  677
• 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 FASTSIGNS Franchise

• FASTSIGNS Recognizes Achievements and Honors Franchisees During 2023 FASTSIGNS International Convention in Las Vegas, NV

• Jeff Parsons and Wes Snyder of FASTSIGNS Awarded Franchisee of the Year by the IFA

• FASTSIGNS Gains Recognition With Three Additional Awards From Franchise Business Review

• FASTSIGNS Named a Top Recession-Proof Business for 2023 by Franchise Business Review

• Propelled Brands’ FASTSIGNS Recognized Among Top 100 Game Changers for 2023 by Franchise Dictionary Magazine

• Propelled Brands Announces Andrea Hohermuth as FASTSIGNS International, Inc. President

• FASTSIGNS Ranked No. 73 on Entrepreneur’s 2024 Franchise 500 List

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

• On December 31, 2022, there were 765 FASTSIGNS Centers open and in operation, of which 88 were international. 677 FASTSIGNS Centers were open and 665 were in continuous operation in the United States during the entire calendar year ending December 31, 2022. The analysis set forth below is based on the average yearly gross sales and median sales for those 665 FASTSIGNS Centers for 2022.

• Of the 665 FASTSIGNS Centers open and in continuous operation in the United Slates during the entire calendar year ending December 31, 2022, 622 FASTSIGNS Centers were “Full-Service” Centers, 15 FASTSIGNS Centers were “Satellite” Centers, and 28 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 an existing operating complementary business that establishes and operates a FASTSIGNS Center within that business.

• The following Tables refer to “Gross Sales.” “Gross Sales” includes all revenues from the sale of any services and products at or from a FASTSIGNS Center and all other revenues of every kind and nature related to operating a FASTSIGNS Center. “Gross Sales” does not include sales or use taxes.

Part 1 – Systemwide Gross Sales – Centers Operating for the Entire 2022 Calendar Year

• The following Table provides systemwide Gross Sales for all operational FASTSIGNS Centers reporting sales for the full 12 months and the Gross Sales for Full-Service Centers.

All Centers

• Number of Centers:  665
• Average Gross Sales:  $998,231
• Number and Percentage of Centers That Met or Exceeded the Average:  223 (33.5%)
• Median Gross Sales:  $747,212
• High Gross Sales:  $17,858,030
• Low Gross Sales:  $60,917

Full-Service Centers Only

• Number of Centers:  622
• Average Gross Sales:  $1,024,156
• Number and Percentage of Centers That Met or Exceeded the Average:  206 (33.1%)
• Median Gross Sales:  $762,531
• High Gross Sales:  $17,858,030
• Low Gross Sales:  $60,917

Part 2 – Range of Gross Sales – Centers Operating for the Entire 2022 Calendar Year

• The following Table shows the ranges of Gross Sales for the 665 FASTSIGNS Centers operating for the entire calendar year ending 2022 and the number of FASTSIGNS Centers within each range:

• $0 to $300,000:  72 Centers
• $300,001 to $500,000:  123 Centers
• $500,001 to $1,000,000:  247 Centers
• $1,000,001 to $2,000,000:  169 Centers
• $2,000,001 to $3,000,000:  30 Centers
• Over $3,000,000:  24 Centers
• Total Centers:  665 Centers

Part 2A – Range of Gross Sales – All Full-Service Centers Opened in 2021 and Operating for the Entire 2022 Calendar Year

• $0 to $300,000:  13 Centers
• $300,001 to $500,000:  6 Centers
• $500,001 to $1,000,000:  2 Centers
• $1,000,001 and Over:  0 Centers
• Total Centers:  21 Centers

Part 2B – Range of Gross Sales – All Full-Service Centers Opened in 2020 and Operating for the Entire 2021 and 2022 Calendar Years

2021 Sales

• $0 to $300,000:  10 Centers
• $300,001 to $500,000:  8 Centers
• $500,001 to $1,000,000:  1 Centers
• $1,000,001 and Over:  1 Centers
• Total Centers:  20 Centers

2022 Sales

• $0 to $300,000:  3 Centers
• $300,001 to $500,000:  9 Centers
• $500,001 to $1,000,000:  6 Centers
• $1,000,001 and Over:  2 Centers
• Total Centers:  20 Centers

Part 2C – Range of Gross Sales – All Full-Service Centers Opened in 2019 and Operating for the Entire 2020, 2021, and 2022 Calendar Years

2020 Sales

• $0 to $300,000:  19 Centers
• $300,001 to $500,000:  4 Centers
• $500,001 to $1,000,000:  1 Centers
• $1,000,001 and Over:  0 Centers
• Total Centers:  24 Centers

2021 Sales

• $0 to $300,000:  15 Centers
• $300,001 to $500,000:  5 Centers
• $500,001 to $1,000,000:  4 Centers
• $1,000,001 and Over:  0 Centers
• Total Centers:  24 Centers

2022 Sales

• $0 to $300,000:  14 Centers
• $300,001 to $500,000:  4 Centers
• $500,001 to $1,000,000:  6 Centers
• $1,000,001 and Over:  0 Centers
• Total Centers:  24 Centers

Part 3 – System-Wide Gross Sales – Top Performing and Lowest Performing Centers Operating for the Entire 2022 Calendar Year

• The following Table shows Gross Sales for the top performing and lowest performing Full-Service FASTSIGNS Centers operating for the entire calendar year 2022.

Top Quartile Full-Service Centers

• Number of Centers:  166
• Average Gross Sales:  $2,149,019
• Number and Percentage of Centers That Met or Exceeded the Average:  45 (27.1%)
• Median Gross Sales:  $1,646,127
• High Gross Sales:  $17,858,030
• Low Gross Sales:  $1,151,588

Lowest Quartile Full-Service Centers

• Number of Centers:  166
• Average Gross Sales:  $335,226
• Number and Percentage of Centers That Met or Exceeded the Average:  88 (53.0%)
• Median Gross Sales:  $341,093
• High Gross Sales:  $493,393
• Low Gross Sales:  $60,917

Part 4 – Co-Brand Centers Operating for the Entire 2022 Calendar Year

• The following Table shows Gross Sales for Co-Brand Centers operating for the entire calendar year 2022.

Co-Brand Centers

• Number of Centers:  28
• Average Gross Sales:  $637,661
• Number and Percentage of Centers That Met or Exceeded the Average:  12 (42.9%)
• Median Gross Sales:  $470,923
• High Gross Sales:  $1,888,331
• Low Gross Sales: $89,857

Part 5 – Gross Sales Study – Full-Service FASTSIGNS Centers with Outside Sales Professionals

• Having a full-time outside sales professional has become an essential element of the FASTSIGNS business model.

• The average gross sales of FASTSIGNS Centers in the US with an outside sales professional during the 12-month period from January 1, 2022 to December 31, 2022 was $1,518,086 for franchise principals who (i) were in business for at least one year prior to January 1, 2022; (2) reported Gross Sales for each of the 12 months in 2022; and (3) advised FASTSIGNS that they employed a full-time outside sales professional during the entire period who was not one of the franchise principals of the Center.

• The number of Centers who met these criteria in 2022, and were used in this study, was 210 which represented 33.8% of the Full-Service Centers open and operational in the US for the full year in 2022.

Part 6 – Performance of New Outside Sales Professionals in Their First 12 Months in the Role

• There were 78 outside sales professionals hired by FASTSIGNS franchisees in 2020 that completed 12 consecutive months in the outside sales professional position. The average total Gross Sales generated by the 78 outside sales professionals in their first 12 months in the position was $241,016. The median Gross Sales for the same group was $207,116.

• There were 59 outside sales professionals hired by FASTSIGNS franchisees in 2021 that completed 12 consecutive months in the outside sales professional position. The average total Gross Sales generated by the 59 outside sales professionals in their first 12 months in the position was $323,941. The median Gross Sales for the same group was $295,397.

Hired in 2020

• Outside Sales Professionals Hired:  78
• Average Total Sales:  $241,016
• Median Total Sales:  $207,116
• High Total Sales:  $1,255,995
• Low Total Sales:  $36,458
• Number of Outside Sales Professionals That Met or Exceeded Average Total Sales:  29

Hired in 2021

• Outside Sales Professionals Hired:  59
• Average Total Sales:  $323,941
• Median Total Sales:  $295,397
• High Total Sales:  $1,177,692
• Low Total Sales:  $48,090
• Number of Outside Sales Professionals That Met or Exceeded Average Total Sales:  25

Part 7 – Results of 2022 Financial Benchmark Survey

• The expense figures were extracted from the 2022 financial statements submitted by the FASTSIGNS franchisees included in the 2022 Financial Benchmarking Survey.

• With respect to the 338 FASTSIGNS Centers included in the compilation of the expense figures, the expense data relates to operations conducted during calendar year 2022.

• The expense percentages for the various expense items provided by each reporting FASTSIGNS Center reflect that FASTSIGNS Center’s expenses as a percentage of its Gross Sales.

• The following expenses represent the major expense items for a FASTSIGNS Center and should not be considered the only expenses that a FASTSIGNS Center will incur.

2022 Year-End Average P&L (338 FASTSIGNS Centers Reporting)

Gross Sales:  $1,138,596 (100.0%)

Expenses:

• Costs of Goods Sold:  $333,217 (29.3%)
• Labor Expenses (including Franchisee Principal):  $382,050 (33.6%)
• Advertising Expenses:  $34,114 (3.0%)
• Auto Expenses:  $15,481 (1.4%)
• Facility Expenses:  $61,969 (5.4%)
• Equipment Expenses:  $8,324 (0.7%)
• General and Administrative Expenses:  $151,390 (13.3%)

EBITDA:  $152,050 (13.4%)

Franchisee Principal’s Salary from Labor Expenses:  $80,162 (7.0%)

Total Franchisee Principal’s Benefit:  $232,212 (20.4%)

2022 Year-End Average P&L (Top 25% Based on Profitability – 85 FASTSIGNS Centers)

Gross Sales:  $1,593,310 (100.0%)

Expenses:

• Costs of Goods Sold:  $435,763 (27.3%)
• Labor Expenses (including Franchisee Principal):  $492,025 (30.9%)
• Advertising Expenses:  $37,970 (2.4%)
• Auto Expenses:  $15,428 (1.0%)
• Facility Expenses:  $64,547 (4.1%)
• Equipment Expenses:  $7,425 (0.5%)
• General and Administrative Expenses:  $183,769 (11.5%)

EBITDA:  $356,383 (22.4%)

Franchisee Principal’s Salary from Labor Expenses:  $134,099 (8.4%)

Total Franchisee Principal’s Benefit:  $490,481 (30.8%)

2022 Year-End Average P&L (Lowest 25% Based on Profitability – 85 FASTSIGNS Centers)

Gross Sales:  $715,741 (100.0%)

Expenses:

• Costs of Goods Sold:  $232,087 (32.4%)
• Labor Expenses (including Franchisee Principal):  $274,814 (38.4%)
• Advertising Expenses:  $26,729 (3.7%)
• Auto Expenses:  $13,811 (1.9%)
• Facility Expenses:  $54,160 (7.6%)
• Equipment Expenses:  $6,825 (1.0%)
• General and Administrative Expenses:  $114,865 (16.0%)

EBITDA:  $(7,549) (-1.1%)

Franchisee Principal’s Salary from Labor Expenses:  $35,409 (4.9%)

Total Franchisee Principal’s Benefit:  $27,860 (3.9%)

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