Hello - A brief intro - I've been in the digital / on demand print biz for 25 yrs, from shooting negs to making signs, last 15 in sales and am evaluating a franchise sign shop. Overall been impressed with operations and think this may a great way for me to stop just collecting a pay check and provide more for my family. The investment seems to be relatively low and the return is more dependent on my own ability to make a success of it. I am hoping to hear from others who've made this evaluation and get the pros/cons laid out further. My own list is about 30 in each column and missing plenty that I have either put out of mind or haven't thought of. Thanks in advance for any advice.
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Buying a franchise
- Thread starter RGD
- Start date
limacchina
New Member
Welcome to the signs101 community.
Pat Whatley
New Member
There are big pros and cons to each side. I spend a long, long time weighing an option to convert my shop over to a franchise shop and in a lot of ways I'm still not sure I made the right decision in choosing not to.
There were three main advantages that I saw:
-A built in, continually researched marketing plan and system of running a business. National name recognition.
-A built in, ready to go knowledge base for information on selling anything related to the sign business
-The "security blanket" of being part of a larger group instead of a guy on an island.
You're going to get bombarded here by people telling you buying a franchise is a ridiculous option, we're a rather independent, snarky bunch. I spent a long time talking to two guys who had been getting by in the sign business 20 years before they converted their shops to Signs Now franchises. Both of them are excellent sign people, just bad businessmen. Once they plugged the SignsNow system of running a business in with their sign making knowledge and talent they started really, really doing well.
For some people the system works, for some it won't.
There were three main advantages that I saw:
-A built in, continually researched marketing plan and system of running a business. National name recognition.
-A built in, ready to go knowledge base for information on selling anything related to the sign business
-The "security blanket" of being part of a larger group instead of a guy on an island.
You're going to get bombarded here by people telling you buying a franchise is a ridiculous option, we're a rather independent, snarky bunch. I spent a long time talking to two guys who had been getting by in the sign business 20 years before they converted their shops to Signs Now franchises. Both of them are excellent sign people, just bad businessmen. Once they plugged the SignsNow system of running a business in with their sign making knowledge and talent they started really, really doing well.
For some people the system works, for some it won't.
SignManiac
New Member
I've seen countless franchisees fail and others do extremely well. No matter how much help you have, you have to be a motivated, ambitious, and willing to listen and do what you are told by the franchisor. Some people are born to be entrepreneurs and others are born to fail. I think today, what really matters is your location and area market conditions. Some areas of the country are stronger than others in regards to economic health.
James Burke
Being a grandpa is more fun than working
I think the first thing you need to do is to nail down your definition of "success", and whether or not the franchise will get you there. And while some people find franchises to be a good thing, others may find them to be restricting. I personally tend to lean toward the "dreamer & innovator" side, and in my case a franchise might not be a good fit.
I started our non-franchise business seven years ago and during our first year I was 100% "winging it". But being a self-directed, life-long learner I put myself on a intense diet of learning (that continues yet today), via any means I could find possible...seminars, books, mentors...etc.
Of all the counsel I've received from each of those sources, two very important recurring themes keep coming back to me time after time: people and systems. People run systems, and systems run businesses...period.
I've seen first hand how some businesses struggle while trying to operate without one or the other. And while it might "work", it's not really the best for long term success. A franchise will help you greatly in these two areas. But if you have strong skills in these areas, then it might do you well to try something on your own for a while.
JB
rjssigns
Active Member
Hit it right on the head. Especially the part in bold. I'm just outside Green Bay WI and the market is ummm..."frugal". The best franchise backed by the best marketing will fail if placed in the wrong area.
I had a talk with my brother regarding the vagaries of business. He said the best way to make money is to have a niche product serving specific clientele. He's been involved with such things for some time now as he runs a production facility for an international corporation.
Don't fall into the trap of saying all signs are custom. It has gotten to where the sign industry is moving towards commoditization. When competing on a fairly equal basis your piece of the "pie" becomes a sliver of the overall market. That is where specialization or niché marketing comes in.
Soichiro Honda has a great philosophy regarding competition: "We no longer fight over individual slices of pie. We increase the size of it".
IMO, I'm not sure how a franchise would help you. One of the major factors is driving sales. You have that under you belt in a related industry. Franchise sales = Walk the neighborhood and pass out flyers. Then send out mailers randomly to the surrounding zip codes. Not mush else is offered beyond that. Then they are going to force you into a premium rent area. This may or may not help your exposure. But it will help drain your operating capital quick fast and in a hurry.
Now the difficult part is the "how to" of it all. And beyond some tips on cut vinyl there is not one franchise that is going to give you that knowledge. You also mention you want to stop collecting a check. Are you prepared to start writing them? The first one out the door every month will be to your franchisor in the form of royalties.
I would say don't do it. AND I would add "Do your research!" if you think you have done it, do more. Find some franchises in you area (and out of your area) walk in a speak to the franchisee. Do this on your own and not with the franchise sales guy. You will see different end of it all. Trust me.
Now the difficult part is the "how to" of it all. And beyond some tips on cut vinyl there is not one franchise that is going to give you that knowledge. You also mention you want to stop collecting a check. Are you prepared to start writing them? The first one out the door every month will be to your franchisor in the form of royalties.
I would say don't do it. AND I would add "Do your research!" if you think you have done it, do more. Find some franchises in you area (and out of your area) walk in a speak to the franchisee. Do this on your own and not with the franchise sales guy. You will see different end of it all. Trust me.
WildWestDesigns
Active Member
To a point that is true. However, I'm in an area that really hasn't felt that pain of the last few years. Sure some have come and gone with that bubble, depending on how close to the vest they were going, but despite the strong market, a lot of people are extremely frugal with their money and exhibit that tire kicker mentality. You really have to appeal to their feeling of "exclusivity" in order to to offset that mentality.
And just to be clear, I'm not bashing the Franchises (well yes I am). Just make sure you are getting your royalties worth. I have met many Franchise owners that think this industry can be had with a "Turn Key" solution. And that is the farthest thing from the truth. Its not like a 7-11 or SubSandwich shop where you are handed a proven brand and a recipe and average pricing. You build it, most of the time, they come. Not here.
Now there are many franchisees, who over time with deep pockets, have manged to survive, pay off over priced equipment leases and start to pull a profit (usually after 6-7 years). But most out of the gate (and by the way the sales guys pitch it, 35-40k) don't have that operating capital to last more than a year with all the money flying out the door.
The Sign Franchises only provide a loose guideline at best. Its up to you to figure or the rest. Vendors, Pricing, Installation, Skilled employees, Licenses, Insurance and more. And you should read the Franchise agreement with a microscope. You will find that you are paying just for the use of the name not support. Guess where your support comes from? Other guys who are just like you, 1-2 years in (that is the typical life span) still figuring it all out. Some franchises don't offer local support at all. And those that do, are really not support. They are there as a liaison between you and the franchisor and to keep tabs on your monthly sales. And many of those guys couldn't lay a piece of vinyl if their life depended on it. Let alone guide you in how to build a complete sign solution for your customers.
Think it through...
Now there are many franchisees, who over time with deep pockets, have manged to survive, pay off over priced equipment leases and start to pull a profit (usually after 6-7 years). But most out of the gate (and by the way the sales guys pitch it, 35-40k) don't have that operating capital to last more than a year with all the money flying out the door.
The Sign Franchises only provide a loose guideline at best. Its up to you to figure or the rest. Vendors, Pricing, Installation, Skilled employees, Licenses, Insurance and more. And you should read the Franchise agreement with a microscope. You will find that you are paying just for the use of the name not support. Guess where your support comes from? Other guys who are just like you, 1-2 years in (that is the typical life span) still figuring it all out. Some franchises don't offer local support at all. And those that do, are really not support. They are there as a liaison between you and the franchisor and to keep tabs on your monthly sales. And many of those guys couldn't lay a piece of vinyl if their life depended on it. Let alone guide you in how to build a complete sign solution for your customers.
Think it through...
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nashvillesigns
Making America great, one sign at a time.
franchise or not?
i have been working with two franchises for twenty years. some observations:
1.since the "Fee" was 12% PER year, if you do amillion dollars in sales with 11 employees and health insurance, rent, yada yada yada,
its still 100,000 plus going to them.
2. you are expected to Maintain you store front accordingly. if its time to "buy new cabinets, rugs, displays, guess what? you are forced to pay their prices...
3. you also must use software they recommend. Trust me, its EXPENSIVE. even the upgrades.
Now i am not saying its a bad idea, but nothing is free.
a benefit? you get slightly lower prices from vendors. still, not enough to make up that 12%.
i bought my own shop and i get to make the changes and get the control since i am a control freak.
i wrote my own sign pricing software, get to keep changing it and love that i can do that part.
truly, you are your own boss.
finally, my first boss who had a really good franchise, told them to take a hike, i am not paying your 12% and locked the door. he currently owns his own shop.
the second old boss is doing well for himself, but laments the high cost of rent because i just remembered the 4th critera of owning a franchise.
4. you must be in a first class office space.
totally a waste of manufacturing space. why do you need your cusstomers to see that? what a waste of resources.
good luck!
-Mosher
i have been working with two franchises for twenty years. some observations:
1.since the "Fee" was 12% PER year, if you do amillion dollars in sales with 11 employees and health insurance, rent, yada yada yada,
its still 100,000 plus going to them.
2. you are expected to Maintain you store front accordingly. if its time to "buy new cabinets, rugs, displays, guess what? you are forced to pay their prices...
3. you also must use software they recommend. Trust me, its EXPENSIVE. even the upgrades.
Now i am not saying its a bad idea, but nothing is free.
a benefit? you get slightly lower prices from vendors. still, not enough to make up that 12%.
i bought my own shop and i get to make the changes and get the control since i am a control freak.
i wrote my own sign pricing software, get to keep changing it and love that i can do that part.
truly, you are your own boss.
finally, my first boss who had a really good franchise, told them to take a hike, i am not paying your 12% and locked the door. he currently owns his own shop.
the second old boss is doing well for himself, but laments the high cost of rent because i just remembered the 4th critera of owning a franchise.
4. you must be in a first class office space.
totally a waste of manufacturing space. why do you need your cusstomers to see that? what a waste of resources.
good luck!
-Mosher
Sign Up Graphics
New Member
Sign Up Graphics
Shadowglen
New Member
Before I got back into the sign business I wanted to look at the franchise options but was stopped in my tracks. The closest signarama is 100 miles away and they don't show availability in my area. Fast signs has three areas open in ND but not one in my area. Made my decision pretty easy. 
By the way I know franchises go off of things such as populous and closest market competition and so on but sometimes they need to look at special circumstances such as rapidly growing communities and what is causing those communities to grow. in the end I am glad I am not in a franchise but think they are really missing the boat.
By the way I know franchises go off of things such as populous and closest market competition and so on but sometimes they need to look at special circumstances such as rapidly growing communities and what is causing those communities to grow. in the end I am glad I am not in a franchise but think they are really missing the boat.
binki
New Member
If you are in sales then you are already motivated and have the energy for the job. Being the boss is more stressful and more work but it is pretty much sales X 10 for your work effort.
A franchise brings you a complete shop with a brand. You still have to do the legwork. One thing you should look at is what the spiff you pay goes for. Normally there is an advertising portion. You should get some local advertising bang for that. Also, you should get an exclusive territory.
As far as the negatives, you may be required to purchase equipment and supplies from the mother ship. Also, you may be restricted in what you can offer or do.
So, in short, if you want to get started in a hurry then do the franchise bit. If you can start with an established customer base (you are a salesman!) and can foot the bill and time for the equipment, facility and arrangement, then go it on your own.
Good Luck and post back with what you did and how it worked out.
A franchise brings you a complete shop with a brand. You still have to do the legwork. One thing you should look at is what the spiff you pay goes for. Normally there is an advertising portion. You should get some local advertising bang for that. Also, you should get an exclusive territory.
As far as the negatives, you may be required to purchase equipment and supplies from the mother ship. Also, you may be restricted in what you can offer or do.
So, in short, if you want to get started in a hurry then do the franchise bit. If you can start with an established customer base (you are a salesman!) and can foot the bill and time for the equipment, facility and arrangement, then go it on your own.
Good Luck and post back with what you did and how it worked out.
cjsigns707
New Member
well, i would definately do my research and read the fine prints. i owned a franchise for 12 years and finally sold out..... i would say the benefit to a franchise is that they have a system in place and you do not have to build from scratch....but it comes at a cost. a franchise will not guarantee you success...i've seen lots of failures.
you can save yourself a lot of money just by consulting with the seasoned owners on this site...with a franchise, that royalty you pay continues and may also increase....even when you finally know what your doing and may even have better ideas than the franchisor.
you have to play by the franchisors rules....
you can save yourself a lot of money just by consulting with the seasoned owners on this site...with a franchise, that royalty you pay continues and may also increase....even when you finally know what your doing and may even have better ideas than the franchisor.
you have to play by the franchisors rules....
The Big Squeegee
Long Time Member
Welcome from OK
:Welcome: to :signs101:
:Welcome: to :signs101:
Gene@mpls
New Member
I would second Mosher- I looked at S-A-R before I went it on my own ( small business experience but no sign experience)
and have never regretted it. I rented a prime spot (not a strip mall) and figured it out- now I own that spot and have a
renter for part of it and I am pretty much retired with my daughter/partner taking over. When the great crash of 2008 came I would have lost everything if I had to pay the franchise and do it their way. I am a happy old ****- just did a road trip to San Francisco in one of my Corvette converts. Gene