2019 Sign and Display Graphics Franchise Review

May 13, 2019

While the commercial printing segment in the United States continues to struggle, still losing an average of 800 establishments annually, the sign & display graphics business is a growth segment. In fact, many commercial printers and most of the print franchise organizations are looking to signs and display graphics to drive revenue growth. Meanwhile, the four franchisors operating in the signs and display graphics industry (Alliance Franchise Brands, FASTSIGNS, Signarama and SpeedPro), along with the non-franchise Sign Biz network, are all reporting growth and do not seem at all daunted by competition from the printing segment. As AJ Titus, President of Signarama, stated, speaking of potential competition from printing companies, “That doesn’t bother us. I don’t think we are at a disadvantage at all. Someone who buys a large format printer and says, ‘I am a sign company now,’ is very mistaken. We’ve invested in a great deal of infrastructure and support for our franchisees, are a mature brand, and even a new center would be years ahead of an inexperienced start-up.” This is a sentiment that was echoed by all of the sign professionals we interviewed for this article.

In this 2019 Sign & Display Graphics Franchise Review, we take a look at the sign and display graphics industry as a whole and recap our conversations with franchisors in terms of their current infrastructure, strategies for the future, and, of course, their year-over-year performance. Because Sign Biz has 224 affiliated centers, we are including them in this review as well, even though they are not a franchise organization.

Industry Overview

The U.S. Census Bureau actually has two different classifications for signs and display graphics, and businesses self-define in their reporting. Therefore, for purposes of this article, we have considered both:

NAICS 541850 Display/Outdoor Advertising: This industry comprises establishments primarily engaged in creating and designing public display advertising campaign materials, such as printed, painted, or electronic displays; and/or placing such displays on indoor or outdoor billboards and panels, or on or within transit vehicles or facilities, shopping malls, retail (in-store) displays, and other display structures or sites.
NAICS 339950 Sign Manufacturing: This industry comprises establishments primarily engaged in manufacturing signs and related displays of all materials (except printing paper and paperboard signs, notices, displays).

In 2016, the last year for which Census data is available, the combined classifications had a total of 95,954 employees across 8,206 establishments. The number of establishments was up from 2015, which had a total of 8,028 establishments. That’s a 2% year-over-year increase in the number of establishments. However, the number of employees was down slightly from 98,732 in 2015 to the 2016 number of employees at 95,954.

Overall, sign manufacturers reported shipments of more than $12 billion in 2016, up from $11 billion in 2015, an increase of 5.7%, a healthy growth rate far exceeding GDP, which has been in the 2% range.

For comparison purposes, we also looked at the number of establishments with less than 20 employees, since most franchise operations fall into that category. The number of those establishments was up 3% year over year, with 6,946 in 2015 compared to 7,121 in 2016. Establishments with less than 10 employees also saw a 3% year-over-year growth in the number of establishments from 2015 to 2016. Due to the way the government collects data, total shipments by establishment size was not available.

These data reflect a shift to smaller businesses in the sign & display graphics businesses, most likely attributable both to growth in demand for their products and more affordable equipment enabling smaller entrepreneurs to enter the business. Industry association SGIA found similar results in its 2018 Benchmarking study, which states, “Since SGIA’s 2017 report, the median number of employees [per display graphics business] stayed the same (N=12), but median sales have decreased slightly to $1,850,000. This could be because the number of smaller companies (less than 5 employees and revenues of less than $250,000) has increased.”

In addition, the SGIA Benchmark report found that median sales growth for 2018 was 8.5% for the display graphics industry at large, with more than 70% of respondents reporting positive sales growth, denoting strength in the overall industry. More than half of respondents plan to be hiring sales people, and 44.4% indicated a desire to hire graphic designers.

The ability to enter this lucrative business more easily has benefited the franchise networks, who have also demonstrated growth –both in establishments and shipments.

It is also important to note that as the commercial printing industry continues to struggle and operators seek new revenue streams, signage is an attractive option. In our Annual Print Franchise Review, published in the April edition, we learned that print franchises are aggressively pursuing signs & display graphics as revenue streams for their franchise centers as well as new customer services. For example, Franchise Services, the franchisor for Sir Speedy, PIP and others, reports that the network’s signs business grew at 25% in 2018. President and Chief Operations Officer Richard Lowe stated, “Our objective is to get to signs being 25% of total revenue in the shorter term, with a goal of 50% longer term. It represents about 16% of our business today. Without the growth we are experiencing in signs, our business would be flat.”

Alliance Franchise Network has both signs & display graphics and print franchises. The company is aggressively working to have dual branded print and sign centers as described below.

Signs are about 10% of AlphaGraphics business today but growing in the 25% to 30% range. The company expects signs to soon be running a close second to digital printing in terms of revenue share. The company is in the process of doing a complete makeover for a Chicago business as a promotion of its signage capabilities.

Both Minuteman and Fortusis offer wide format printing as well.

So, while the sign & display graphics franchises are doing well, they can expect increasing competition from their print franchise brethren (and others, of course) moving forward.

As a final note on the industry at large, not only are there two NAICS classifications the government uses to describe the industry, but there are also two distinct segments within those classifications. We are using the terminology signs & display graphics, instead of just signs as we have in the past, due to the fact that there are two very influential industry associations who differentiate themselves by the areas they cover.

The International Sign Association (https://www.signs.org/) focuses on signs, as distinguished from display graphics. This includes electronic, architectural, ADA-compliant, Braille, wayfinding and more.
SGIA (www.sgia.org), on the other hand, focuses on display graphics of all types.

Most sign companies do both, but each of the associations provides relevant information and support to its members in its specific discipline, including technologies, regulatory concerns and more.

2018 Sign & Display Graphics Franchise Networks

The sign & display graphics franchise networks we reviewed for this article include:

Alliance Franchise Networks (Signs By Tomorrow, Signs Now, Image 360), with 311 centers total;
FASTSIGNS, with 700 centers;
Signarama, with 750 centers; and
SpeedPro Imaging, with 180 centers

For purposes of this article, we also separately profile Sign Biz, which is NOT a franchise network, but rather, a network of member companies connected by an evergreen contract. Sign Biz has a total of 224 centers and has been in business for 30 years. Its relevance to this story has to do with the centralized resources it provides to its members, resources an unaffiliated sign shop typically does not have access to.

These five businesses, then, represented a total of 2,165 centers, almost one-third of the <10 employee businesses in the industry at large. And they generated a total of $1.223 billion in systemwide sales in 2018, up from$1.159 billion in 2017.

Network

Systemwide Sales 2017

Systemwide Sales 2018

Percent increase/decrease

Alliance Franchise Networks LLC

$167 million

$168.1 million

0.6%*

FASTSIGNS

$479 million

$504 million

5.2%

Signarama

$275 million

$300 million

10%

SpeedPro Imaging

$62 million

$69 million

11.3%

Sign Biz

$176 million

$182 million

3.4%

Total

$1,159 million

$1,223 million

5.5%

This smaller-than-usual year-over-year increase at Alliance Franchise Networks is attributable to 7 of the 311 centers experiencing significantly lower revenues due to “unusual circumstances.” Taking those 7 out of the mix, the network grew at 4.5% in 2018 as compared to 2017.

Network

Highest Revenue Center

Average Sales per Center

Average Investment Required

Alliance Franchise Networks LLC

$2,350,000

$703,000*

$193,000 to $365,000

FASTSIGNS

$6,900,000

$800,000

$225,000

Signarama

$6,298,671

$579,695**

$55,000 with financing

SpeedPro Imaging

$3,000,000

$594,436***

$256,900 to $298,000

Sign Biz

$6,500,000

$810,345

$195,000

*Image360 **Centers with an outside sales rep for one or more year averaged $1,136,555 ***For centers that have been open 2 years or more

Most also suggest or require working capital of in the range of $45,000 to $50,000.

Key Challenges and Opportunities

In our annual survey, we asked the franchisors what their franchisees’ biggest challenges would be in the coming year. All of the franchise networks identified finding qualified sales people as a challenge, and 80% reported finding qualified production people as a challenge as well. Other challenges, each identified by 40% of respondents, included:

Competition from other print providers
Increasing employee benefit costs
Pricing
Owner/management retirement.

The SGIA 2018 Benchmark report also found that downward pressure on prices is still one of the main obstacles to growth for the display graphics industry at large.

In terms of opportunities, there was less consensus, but 60% identified adding textile/fabric printing capabilities as a key opportunity, with 40% citing improving economic conditions. Forty percent also identified hiring new salespeople as an opportunity. According to the SGIA 2018 Benchmark report, for the industry as a whole, adding new product lines was cited as an important current strategy by 47.8% of respondents.

Overall, 75% of system revenues for sign & display graphics franchises were generated by wide format and signage, with 12% of revenues coming from brokered or other services. In terms of applications, there was little interest in adding commercial printing, with respondents indicating they would outsource the work if needed. Digital ceramic printing and digital textile printing for applications other than signage were areas of interest for the future for most respondents. Both can actually be accomplished using heat transfer dye sublimation. We will be interested to see how much adoption of these applications occurs during 2019. Applications most commonly added in the past 18 to 24 months included fleet and building wraps, hard signage and sign construction, and digital art printing.

Franchise Networks at a Glance

In researching this article, we spoke with leaders of each of the four sign & display graphics franchise networks to understand more details about their operations, as well as with non-franchise organization Sign Biz. The results of those conversations are presented here in alphabetical order.

Alliance Franchise Networks LLC

Alliance Franchise Networks has both print and sign franchises. In its sign business, there are three brands: Signs Now, which has about 90 centers; Signs By Tomorrow, which also has about 90 centers; and its growth brand, Image 360, which has 131 centers. Both Signs Now and Signs By Tomorrow were retail-oriented when they were started and still do retail business today, while Image 360 centers are B2B focused on developing higher-end client relationships, interior design, experiential graphics, wayfinding and some of the more upscale image solutions clients are seeking today. Any new centers that are opened will be branded Image 360.

In 2018, Image360 average sales per shop of $703,000. Systemwide sales for all three brands was $168.1 million, with Image360 delivering $80.2 million of that. The highest revenue shop, an Image360 location, generated $2.35 million in sales. The average investment to open a new Image360 center in 2018 ranged from $193,000 to $365,000, depending on market requirements and franchisee choices.

Unique in having both sign and print franchises, Alliance Franchise Networks is also leveraging the synergy between the two. As we reported in our April Print Franchise Review article, there are already about 30 Allegra centers that are dual branded as Allegra and Image 360, with a goal to have 80 dual-branded centers in the next five years.

Another program the print and sign businesses share is the Matchmaker program, which allows entrepreneurs to purchase an established business with an existing customer base, cashflow and staff. Owners of independent print or sign shops looking to retire or sell their businesses can work with one of Alliance Franchise Networks’ merger and acquisition managers to find qualified buyers or match with existing franchise members looking to expand in other markets. A re-branding to Allegra Marketing Print Mail, Image 360, or a dual branded center allows the new owner to capitalize on the power of the network and hit the ground running. The Advantage℠ Program is designed for independently branded sign shops who want to grow the value of their company by gaining access to a host of franchise network resources plus develop a strategy for when they are ready to sell.

The company has a fairly aggressive greenfield program for new centers as well. A new Image 360 center will typically have a very professional-looking lobby and conference room with a consultative and creative feel. Behind the wall, production consists of printers (typically 60” HP Latex), laminators, cutters (Graphtec or Summa) and production tables. Some will start with a flatbed as well, or upgrade to one later as the business grows. Some centers are also adding soft signage, according to Ray Palmer, President of the Sign & Graphics Division. “Costly equipment is still a barrier to entry to get the true pop that will drive customer acceptance in a large way,” he says. “We just installed equipment in our corporate center that is a mix of direct to fabric and dye sub. This center primarily focuses on experiential graphic design for hospitals and offices, and it is one of the largest centers in the system.” Palmer points out where centers have gotten into apparel, it is more likely to be some screen print and direct-to-fabric print. However, the preferred focus for the future would be soft signage for trade shows, etc. “Our focus is on breaking away from commodity products to those that command respectable margins for our franchisees,” Palmer adds.

Other technologies the organization is keeping an eye on include dynamic digital signage and 3D printing. “We have done a number of dynamic digital signage projects,” Palmer notes, “but we need to find a way to make them more margin-driven for our franchisees.”

In terms of software infrastructure, Corebridge is the MIS of choice and includes built-in ecommerce and workflows. The sign group also takes advantage of Alliance Franchise Networks’ Workstream™ technology package, a corporate effort that also includes the print division. Over the past six years, the company has made extensive investments in services and infrastructure to support its franchisees, including WorkStream. Technology is a centerpiece of the company’s long-term vision for growth. The integrated system is designed to reduce the time associated with estimating, order entry and production activities through automation, shifting the focus to client services. Strategic partnerships with a variety of industry suppliers have helped to develop a fully integrated solution that includes eCommerce, MIS, marketing technology and more, much of it cloud-based.

Alliance Franchise Networks’ corporate Marketing Resource Center includes graphic designers, copywriters and web developers, committed to helping the network deliver marketing services, and also offers sales training and coaching sessions.

FASTSIGNS International, Inc.

FASTSIGNS CEO Catherine Monson reports that 2018 was another record year for the network, as were the five previous years. FASTSIGNS had more than 700 centers at the end of 2018 with over 620 locations in the U.S. and continues to aggressively open new centers. FASTSIGNS is the largest sign and graphics network in North America. Systemwide sales exceeded $504 million, with the highest volume location delivering $6.9 million in sales. “Our brand has the highest average sales volume in the sign space,” she stated, “the highest profitability, and we are the only one in the category that includes the actual financial results of our franchisees in our Franchise Disclosure Document. In addition, FASTSIGNS was ranked #1 in the sign and graphics space for three years in a row by Entrepreneur Magazine.” When she joined FASTSIGNS in 2009, she set several key goals for the system after visiting over half of the FASTSIGNS franchisees over the first half of 2009, as developed the company’s four key strategic objectives:

Increase franchisee profitability by 50%. FASTSIGNS exceeded that goal of increasing franchisee profitability by 50% in 2017 and continues to make that a primary focus. FASTSIGNS’ updated key strategic objective is to further increase franchisee profitability by 25%.
Increase average sales volume to over $1 million. The average is at about $820,000 now but the system has added 200 new locations at the same time, so that average includes young centers still ramping. For those centers that existed in 2009, Monson reports that the average exceeds $1 million.
Further increase the value of the FASTSIGNS brand. Monson reports that both aided and unaided brand awareness and the actual multiple of profit franchisees receive when they sell their businesses demonstrates that the value of the FASTSIGNS brand has increased year over year.
Further increase already high franchisee satisfaction. According to Monson, the network continues to receive awards from publications and third-party sources such as Franchise Business Review, the Canadian Franchise Association, and the Franchise Research Institute for the highest franchisee satisfaction. “We have happy franchisees whose sales and profits are growing,” she says. “Our goal is to add value and make the brand even more successful; the only way for a franchisor to be successful is if its franchisees are successful.” Monson boasts a 100% renewal rate among franchisees in 2018 and a 98% renewal rate since the company’s inception.

In seeking new franchise centers, FASTSIGNS offers a typical greenfield startup, conversion of an independent sign business, and a co-branding of someone in print or related fields, sch as trophies, pack-and-ship, a camera store, etc. “Because the brand is so well-known,” Monson states, “most of our leads come from our website. But we also attend franchise shows, trade shows, and advertise in trade publications such as WhatTheyThink and Printing News. We also do some pay-per-click advertising and direct mail.”

In terms of resales, Monson reports that the typical number per year is 20 to 25 centers.

At FASTSIGNS, a greenfield center configuration is driven by the network’s single most important factor: that the franchisee is able to quickly reach profitability. A typical greenfield center will consist of 1,300 to 1,500 square feet and a startup package that enables them to produce 80% to 85% of the typical work a center would need to produce. They also try to get first right of refusal on adjoining spaces to allow for growth in the same location. A new center would open with a roll-to-roll printer, an application table, a wall cutter, laminator, plotter, and some computers. “We teach franchisees how to utilize the opening equipment package to profitably sell and efficiently produce a wide variety of products,” Monson notes. “There is no reason to burden a new franchisee with a high break-even with a flatbed, flatbed cutter and 3,000 square feet of space. As they start making a profit and grow the business, when it comes time to add new equipment or space, we advise franchisees to do it in a way that does not break the bank and meets the needs of the business and the local market.” The network also has a stable of outsource providers to help franchisees meet customer needs even when they don’t have those production services in house.

The average investment to open a greenfield center in 2018 was $225,000.

FASTSIGNS reviews its technology recommendations each year and adjusts them based on current market state after testing in the corporate center. “We just received the new HP Latex R1000 flatbed,” Monson says, “and put it through its paces, as an example. When it is time for a center to buy a piece of equipment, they can consult with technical support to determine what the right solution is. And with over 700 locations, our franchisees receive significant price advantages and discounts.”

In addition to HP, FASTSIGNS supports printers from Epson, Roland, EFI and Mimaki, including heat transfer dye-sub for soft signage.

Signarama.

Signarama, part of the United Franchise Group, has a total of 750 shops in its network, with 450 of those located in North America. Its average sales per shop is $579,695, but AJ Titus, President, indicates that centers who have had an outside sales rep for one year or more average $1,136,655. Systemwide sales for 2018 were in excess of $300 million, with the highest revenue shop generating $6,298,671 in sales. Roy Titus, AJ’s grandfather, founded the Minuteman Press franchise; and more than 30 years ago, AJs father, Ray, founded Signarama. Now AJ has taken over running the Signarama operation.

For 2019 and 2020, Signarama is focused on cultivating data and using its technology to the fullest. Titus says, “We are in the process of upgrading our website and moving to a new Point of Sale system where we can utilize real time data to help franchisees market, strategize and sell more. On top of that, we are looking to new products to sell, including digital signage, electronic message centers (EMC’s) and more. We are always trying to be one step ahead in research and development as well!”

In terms of the future, Titus adds, “We are intrigued by the possibilities of creating an app that will help us gain a better understanding of what are customers are looking for, what services they are using and how often, and also to help us better analyze trends in signage. For example, a significant amount of the revenue coming through our stores is from installation, which we recently learned from some business analytics we did. We didn’t know that before. With that information in hand, we can decide, do we need to do more training, develop specific marketing materials or advertise those capabilities more? We believe to the extent we can make better use of data, we can make better business decisions and better spur our growth.” Titus believes this will be a 2020 or 2021 initiative for the company. Titus sees the biggest opportunity for network growth outside of the U.S., but adds, “We are very focused on helping our franchisees grow their businesses wherever they are located. The more we help them grow their businesses, the more franchises we will sell and the bigger the brand will get. Typically, a new franchisee doesn’t have any industry experience, but has a background in management, sales or marketing.” The company already has a significant presence in Asia and continues to develop that market. “Our footprint in Latin America is light,” he says, “and that’s a region we’d like to grow.” That being said, new franchises are opening up in the U.S. at a double-digit rate as well.

Typical startup investment for a greenfield center is $200,000 but can be as low as $55,000 with financing. A new location is typically 1,400 square feet with three employees. Typical equipment for a start-up would include a 60” HP Latex roll-to-roll printer, a Graphtec plotter, a laminator and a lamination table. “Some of our more mature centers have added flatbeds,” Titus says, “but we typically would not start out a new center with that level of investment.”

The company has programs in place to encourage independent sign companies to convert to the Signarama brand, and Titus indicates the company is getting good traction there. “We also have franchisees who are wanting to retire, and we help them find buyers for their centers,” he adds. “We are a mature and well-respected brand, and that attracts people who are looking for something new to do. We see about a 50/50 ratio between new stores and resale stores.” Signarama also co-brands with some of the other brands in the United Franchise Group where it makes sense, such as Fully Promoted, a promotional products franchise operation, where there is little overlap in their offerings.

Signarama provides its franchisees with a wide range of support, from training in house to in the field, digital hosting and web services, marketing material development and training, POS/CRM training and support, as well as business management support. Signarama does not restrict its centers with respect to technology but does have favorable buying agreements with key companies such as Grimco, HP, Avery and more. The network uses the Corebridge system for POS.

Soft signage is another area of potential growth, representing 10% to 15% of the network’s business today. “It’s easy for franchisees to do,” Titus says. “Most do it in house although some sub it out. Although we don’t think it will dominate, it is a product that people are looking for, especially for trade shows to replace more conventional signage. ”In terms of competition from print franchises and others who have set their sights on the sign business as a growth opportunity, Titus says, “That doesn’t bother us. I don’t think we are at a disadvantage at all. Someone who buys a large format printer and says, ‘I am a sign company now,’ is very mistaken. We’ve invested in a great deal of infrastructure and support for our franchisees, are a mature brand, and even a new center would be years ahead of an inexperienced start-up.”

Titus concludes: “We are in a really exciting time at Signarama. We are updating a lot of our infrastructure digitally to make sure we have the best analytics in the industry and to make sure we are on top of industry trends and the health of our franchisees. We want to continue to be the leader into the 2020’s, and we are looking to take the next steps in innovation.”

SpeedPro Imaging

SpeedPro Imaging is primarily a B2B business that identifies among its customers printers, corporations, government agencies and schools, as well as print brokers, event planners and ad agencies, all of whom have a need for signs and display graphics. SpeedPro is actually comprised of two sister companies; the U.S. operation, headquartered in Denver, operates more than 130 studios, while its Canadian sister operation, founded in 2004, has about 50 studios.

Larry Oberly, the organization’s new President & CEO as of November 2017, brings 27 years of franchise experience from the food service, real estate and large-format printing industries.

SpeedPro’s growth model has been new studio startups. The company seeks independent professionals who wanted to run their own print and graphics franchise, perhaps leaving corporate America by choice or involuntarily, and have an interest in operating a franchise. And in the second quarter of 2019, the company added a conversion option for existing independent wide-format printers whose businesses are not flourishing to the levels they would wish, or commercial printers wishing to engage in the wide-format graphics business. Oberly states, “We have a compelling conversion package with a low cost to get in and significant upside.”

A new studio would typically be equipped with the HP 560 Latex series roll-to-roll printer, a Summa plotter and a Kala laminator. “Franchisees, of course, can add additional equipment if they wish, but we like them to keep their expense level down until the studio is established,” Oberly says.

Oberly cites five key values of franchising in the wide-format graphics business:

First is the power of the network. Oberly states, “You have over 130 different owners in the U.S. who can help you with best practices and off whom you can bounce ideas. The cooperative and sharing nature of the network is one of the highest-ranked attributes.”
The incredible vendor relationships the network has are also critical to franchisee success.
SpeedPro also offers training and support. “The know-how we deliver from our vast experience accelerates owners to a level of expertise that would not be available to an independent shop. We make this accessible in a combination of formats including online, in a classroom and virtually,” Oberly notes.
Marketing resources are also key. “We provide the benefit of a collective marketing fund for our franchisees, which is focused on the website and digital lead generation as well as public relations and promotional activities that benefit our franchisees and strengthen the brand.”
Oberly adds, “We use Listen360 customer engagement software, which has helped us demonstrate our exceptional service. Our Net Promotion Score is 96 (out of 100) and we have a Google ranking of 4.9 stars, which is off the charts.”

In addition to standard wide-format graphics products offered by the network, Oberly sees fabric as an important part of the business. Oberly states, “Right now we have one studio that has invested in dye sublimation and others are outsourcing. We see this as a huge opportunity for the future and we believe that through our new conversion program, there may be opportunity on the part of new owners to invest in dye sublimation.”

Many of the SpeedPro studios have flatbed printers and computer numerical control (CNC) routers. Flatbed printers are generally sourced from HP, Agfa and EFI and the company is doing significant research and development into what’s next for the industry and for SpeedPro. SpeedPro uses Corebridge as its POS system, which is popular in the industry.

SpeedPro strategies are paying off. The organization grew by six studios year over year and network sales were up a strong 11.7%. But they are not stopping there. “We have hired an innovation consultant,” Oberly explains, “and we will be looking to think outside the box in terms of new business opportunities in the future. I believe we have a great plan for future growth, not only as we look to new verticals, but also as we extend our conversion program, which we are very excited about.”

The Future is Bright

The sign and display graphics franchises are healthy and growing. Although their growth rate is slightly lower than the display graphics industry as a whole (according to SGIA reports), they are growing faster than GDP.

All of the companies we spoke to are aggressively seeking – and acquiring – new franchisees, either independents who see the value of the infrastructure a franchise organization can provide them, or entrepreneurs looking for a new career opportunity. All have reported extremely high renewal rates as well, indicating that existing franchisees are generally happy with the services provided by the franchisor and the business opportunity ahead of them.

While the bulk of the work being produced by these franchisees is still the typical signs, banners, flags and wraps using a variety of materials, and much of it produced using roll-to-roll printers, there is growing demand within the networks for flatbeds. And there is interest in expanding beyond soft signage into other textile applications as well. We anticipate that this will be an area in which we will see significant year-over-year growth when we examine the market next year. This can include a variety of items of apparel, including embroidery but also heat transfer dye sublimation, direct-to-fabric and direct-to-garment printing for various applications.

This move is being driven both by market demand and by improving and more cost-effective fabric printing technologies. Within North America, there is a significant drive to revitalize the textile industry using on-demand production methods and more customization and personalization in order to compete with Asian markets. Sign and display graphics businesses are ideally positioned to take advantage of this demand, and as franchisors do the market research and testing on behalf of their franchisees, we are likely to see more centers buy in. Also consider that if they choose to adopt heat transfer dye sublimation, they can also use the same technology to produce in house a variety of promotional items that they may currently be outsourcing, or not taking advantage of at all.

For a future vision of where this market – particularly the display graphics segment – is headed, be sure to read our story about McGowans Print, an extremely innovative Irish display graphics firm, in this month’s edition. Of particular note is McGowans’ adoption of 3D printing and thermoforming to create stunning three-dimensional signage. McGowans was also the first display graphics company to invest in the EFI Nozomi C18000, a high speed, high quality sheet-fed digital printer originally designed to serve the packaging market. While it is not likely that many Nozomi printers will make their way into the franchise networks anytime soon, the McGowans story should be an inspiration to everyone in the industry that thinking outside the box and taking risks on new businesses can pay off.

This is a vibrant, fun and lucrative market. Results would indicate that the franchisors in this segment are doing a great job of investigating new opportunities, providing training and supporting their franchisees with great infrastructure that would be hard to match as a smaller independent. We look forward to seeing what advances these networks make in the coming years!

Sign Biz® Inc.

As noted earlier, Sign Biz is not a franchise network but rather a network of members who are under contract to receive services from a centralized organization. Each Sign Biz Member maintains its sown branding but can display the Sign Biz bug to promote its membership. Unlike a franchise operation, Sign Biz does not collect royalties. However, it does offer a number of fee-based services to its members. Sign Biz also acts as a Value Added Reseller within the sign industry, earning margins on sales and negotiating special pricing for members.

President & CEO Teresa M. Young says, “Since 1991, we have been driven by a requirement to be sustainable for our Members. We are happily forced to developed programs and services our Sign Biz Network Members want and need that they can purchase. This includes things like our expert tech support program at about $2.50/day with Microsoft certified IT professionals, color calibration, remote support by dialing in on someone’s computer screen, marketing campaign materials, postcards, etc. For $89 per month, they can opt into a full email campaign with as large a list as they wish to distribute for our Sign Hugger newsletter branded for them, which includes relevant business-oriented articles. It keeps them top of mind with monthly communications to customers and prospects.”

The organization currently has 224 affiliated centers. New centers are either greenfield startups or conversions of existing sign businesses. There is an approximate 90-day startup period for a new center at a complete package cost for the new owner of about $153,000. “We also like them to have $45,000 to $50,000 in working capital,” Young adds. “After that, there is no monthly fee other than the services they choose to subscribe to.”

At typical start-up package would consist of a 64” printer/cutter plus a separate 48” cutter, a 64” laminator, and a 43” commercial dynamic digital display with a media player and the LobbyPOP® software including a full infomercial developed by Sign Biz. Sign Biz charges a small deposit fee for an existing sign business to gain Sign Biz member rights, and the balance of payment of plus $1,000 per month for 16 months with no interest. “We create a slipstream in their business to bring in necessary systems, help with sales training and sales compensation programs, etc.,” Young notes. “This helps them grow their businesses. A recent conversion in Kentucky for example, went from revenues of $280,000 to $360,000 in the first year, achieving it stretch goal.”

Like other networks, Sign Biz members depend on each other for outsourcing of work they cannot produce themselves. When someone needs help, any Member can send an email to all members via a private email platform. An example would be a Connecticut firm asking for help from a California firm to install signage in that state, a common occurrence in the network.

While not all centers offer all services, across the network Sign Biz Members offer dynamic digital signage, digital textile printing, electric signs, soft and hard signage and signage construction, fleet and building graphics/wraps, digital art printing and more. When a customer needs commercial printing or digital ceramic printing, that work is outsourced to Sign Biz partners.