Signarama Franchise Review
This article is based on its 2020 FDD.
Signarama produces, fabricates, installs and/or sells:
- magnetic signs,
- boat and vehicle lettering,
- paper and laminated signs,
- banners and posters,
- show cards,
- vinyl lettering,
- menu boards,
- reflective signs,
- name plates,
- interior/exterior signage,
- window lettering,
- mobile signs,
- retail displays,
- store fronts,
- trade show graphics,
- architectural and directional markings,
- wood signs,
- engraved signs,
- Americans With Disabilities Act (ADA) signage, and
- electric and neon signs.
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Initial Franchise Fee
$49,500
All franchisees purchasing a new Signarama franchise pay an initial franchise fee of $49,500. You will be required to pay a $9,500 deposit, commonly referred to as a “binder.”
Signarama Franchise Cost
The total investment necessary to begin operation of a Signarama sign center is from $239,740 to $308,520 if equipment is purchased and from $106,513 to $175,293 if equipment is leased. These amounts include $197,530 that must be paid to the franchisor if equipment is purchased, $49,500 that must be paid to franchisor if equipment is leased, and $0 to $3,500 that must be paid to the franchisor’s affiliate.
Additional Cost Breakdown
Below is a list of the costs that factor in the range of startup costs from $239,740 to $308,520 if equipment is purchased and from $106,513 to $175,293 if equipment is leased.
Additional Cost Breakdown
| Type of Expediture | Amount |
|---|---|
| Initial Franchise Fee | $49,500 |
| Travel and Living expenses while at training school | $210-$490 |
| Real Estate | $4,500-$7,500 |
| Real Estate Service Charge | $0-$3,500 |
| Leasehold Improvements | $0-$37,000 |
| Equipment Package initial payments and processing fee | $0-$14,803 |
| Equipment Package | $0-148,030 |
| Insurance | $1,000-$2,000 |
| Security Deposit | $0-$3,000 |
| Local Grand Opening | $1,500-$2,500 |
| Additional Funds (0-6 months) | $35,000-$55,000 |
Ongoing Franchise Costs and Fees
Royalty: 2-6% of Gross Revenues-
Marketing: 1% of Gross revenue per month
Payment: Royalties are due monthly
Minimum 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.
Signarama Income Statement and Retained Earnings
Signarama Inc. Consolitades Statement of Income and Retained Earnings For the years ended December 31,2019 December 31,2018 and December 31,2017
| 2019 | 2018 | 2017 | |
|---|---|---|---|
| Income | |||
| Franchise Fees | 2,506,043 | 3,677,674 | 3,604,384 |
| Product | 1,173,968 | 2,776,212 | 2,849,054 |
| Commissions | 7,616 | 92,997 | 57,812 |
| Royalties | 10,448,678 | 10,524,228 | 9,975,561 |
| Other Income | 118,007 | 216,621 | 336,972 |
| Total Income | 14,254,312 | 17,287,732 | 16,823,783 |
| Cost of Goods Sold | 2,197,911 | 3,260,058 | 3,216,938 |
| Gross Profit | 12,056,401 | 14,027,674 | 13,606,845 |
| Expenses | |||
| Advertising | 707,193 | 1,015,487 | 1,018,530 |
| Automobile | 434,318 | 498,844 | 542,065 |
| Bad Debt | 89,344 | 40,703 | 48,097 |
| Bank Service Charges | 116,577 | 152,567 | 90,994 |
| Computer and Software | 252,721 | 152,742 | 154,285 |
| Depreciation and Amortization | 228,969 | 259,999 | 227,267 |
| Dues and Subscriptions | 83,274 | 58,747 | 47,615 |
| Insurance | 158,482 | 116,452 | 100,366 |
| Licensing and Registrations | 13,823 | 51,722 | 53,221 |
| Office | 399,448 | 414,736 | 521,540 |
| Payroll | 6,426,646 | 7,347,491 | 7,279,251 |
| Postage | 49,723 | 47,478 | 61,279 |
| Professional Fees | 403,655 | 796,314 | 529,354 |
| Rent | 116,653 | 103,471 | 112,112 |
| Taxes | 114,577 | 165,730 | 181,540 |
| Telephone | 555,222 | 522,456 | 383,246 |
| Travel and Meals | 1,298,859 | 1,466,991 | 1,547,825 |
| Total Expenses | 11,449,484 | 13,211,910 | 12,898,587 |
| Net Income Before Other Income (Expense) | 606,917 | 815,764 | 708,258 |
| Other Income (Expense) | |||
| Interest and Dividend Income | 57,306 | 64,289 | 50,022 |
| Interest Expense | (464,266) | (334,979) | (233,705) |
| Income Tax | 30,000 | (19,521) | (25,000) |
| Gain (Loss) on Foreign Currency Exchange | (11,910) | (65,408) | (58,606) |
| Gain (Loss) on Fixed Asset Disposal | (10,556) | – | – |
| Realized Gain (Loss) on Investments | 13,670 | 75,356 | 25,570 |
| Total Other Income (Expense) | (385,755) | (280,263) | (241,719) |
| Net Income | 221,161 | 535,501 | 466,539 |
| Retained Earnings, Beginning | 5,355,667 | 4,935,079 | 4,468,540 |
| Stockholder’s Distributions | (42,094) | (114,913) | – |
| Retained Earnings, Ending | 5,534,734 | 5,355,667 | 4,935,079 |
Key Takeaways
Signarama is a profitable business for the franchisor with a net income in 2019 of $221K.
However, Signarama has seen a decrease in net income, since 2018 when net income was $535K.
Competition
Your competitors include independent sign shops, franchisees of other sign businesses and to a lesser degree, commercial sign shops. The market for signs in the United States is mature with demand increasing for electronic signage incorporating the latest technology.
Conclusion
Signarama began in 1986 by Roy Titus and his son. Now Signarama operates a full-service retail sign center.
While this may be the business for you, make sure to also check out other businesses offered on Vetted Biz and in the industry.
