FDD Talk: How Much Does a FASTSIGNS Franchise Make (Average Revenues and/or Profits)?

FASTSIGNS Center Photo by Carolinadoug

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

  • Section I – Background information on the FASTSIGNS franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a FASTSIGNS franchise, based on Item 7 of the company’s 2021 FDD
  • Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a FASTSIGNS franchise, based on Items 5 and 6 of the company’s 2021 FDD
  • Section IV – Number of franchised and company-owned FASTSIGNS outlets at the start of the year and the end of the year for 2018, 2019, and 2020, based on Item 20 of the company’s 2021 FDD
  • Section V – Presentation and analysis of FASTSIGNS’ financial performance representations, based on Item 19 of the company’s 2021 FDD, including information on the:
  • 2020 average, median, high, and low gross sales for the 636 FASTSIGNS Centers; the 591 Full-Service FASTSIGNS Centers; the 159 Full-Service FASTSIGNS Centers in the top quartile; the 159 Full-Service FASTSIGNS Centers in the lowest quartile; and the 29 Co-Brand FASTSIGNS Centers that were open and in continuous operation in the United States during the entire calendar year ending December 31, 2020
  • 2020 average gross sales for FASTSIGNS franchise owners who (i) were in business for at least one year prior to January 1, 2020; (2) reported gross sales for each of the 12 months in 2020; 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 59 outside sales professionals hired by FASTSIGNS franchisees in 2018 and the 87 outside sales professionals hired by FASTSIGNS franchisees in 2019, that completed 12 consecutive months in the outside sales professional position, during their first 12 months in that position
  • 2020 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 306 FASTSIGNS Centers included in the 2020 Financial Benchmarking Survey, the 77 reporting FASTSIGNS Centers in the top 25% based on profitability, and the 76 reporting FASTSIGNS Centers in the lowest 25% based on profitability

Section I – Background Information

18 Things You Need to Know About the FASTSIGNS Franchise

Propels Growth Through New Corporate Umbrella

1.  At the end of March 2021, FASTSIGNS announced the formation of Propelled Brands. To better represent the expansion of services following the acquisition of NerdsToGo, the parent company of FASTSIGNS has selected the name Propelled Brands as the corporate umbrella under which both brands and future brands will operate.

2.  Catherine Monson, CEO of Propelled Brands and chair of the International Franchise Association, said, “We are thrilled to officially unveil Propelled Brands as the umbrella under which we will operate and grow a portfolio of service-oriented franchise brands. We look forward to amazing opportunities ahead, in addition to the continued growth for our existing franchisees and our team members. Propelled Brands marks a key milestone for us as we lay the foundation to expand our portfolio of brands.”

3.  Propelled Brands will focus on service-oriented franchises and help each brand in its portfolio to confidently navigate forward based on their unique position, momentum, and purpose. Propelled Brands will advance the strategic path for each brand and will offer support and guidance to every franchisee to help them maximize success.

4.  Jennifer Herskind, chief marketing officer of Propelled Brands, said, “We believe Propelled is a brand that knows where it’s going and exactly how to get there. Propelled Brands offers a clear vision and supportive business model for each franchise brand to equip franchisees on a path to success.”

Announces Formation of Diversity and Inclusion Committee

5.  At the beginning of September 2021, FASTSIGNS announced the formation of its Diversity and Inclusion Committee. Comprised of a diverse group of FASTSIGNS franchisees selected from the brand’s global network, the committee was created to foster an environment that promotes and prioritizes diversity and inclusion within not only the FASTSIGNS system but also the broader signage and franchising industries.

6.  According to Catherine Monson, CEO of FASTSIGNS International, Inc., CEO of Propelled Brands, and chair of the International Franchise Association, “Every company should value diversity and inclusion because of the richness and strength it brings to their business. Over the years, the signage and franchising industries have become more diverse and inclusive, but there’s more we can do – and as the leader in our sector, FASTSIGNS is proud to lead the way.”

7.  “Diversity and inclusion needs to extend beyond personalities, professional backgrounds, and other life experiences, and encompass all of an individual’s unique characteristics and experiences, including race, gender, ethnicity, age, religion, disability, national origin, and sexual orientation. Supporting and building diversity and inclusion is the right thing to do for our employees, our franchisees, our franchisees’ teams, our stakeholders, our customers, and our industry. We look forward to expanding this initiative across Propelled Brands,” said Monson.

8.  The eight committee members will tackle subjects such as increasing the number of minority franchisees within the FASTSIGNS system, promoting more open dialogue and collaboration, workplace environments, training protocols, education, and other topics with the goal of creating more inclusive initiatives. Additionally, the committee will work to ensure diverse individuals can lead a rewarding career at FASTSIGNS International and FASTSIGNS locations.

9.  The Diversity and Inclusion Committee members include:

  • Kevin Jones, franchisee at FASTSIGNS of Santa Rosa and Petaluma, California;
  • Howard James, franchisee at FASTSIGNS of Washington, D.C.;
  • Carmen Ruiz, franchisee at FASTSIGNS of Daytona, Florida;
  • Jose Corujo, franchisee at FASTSIGNS of Puerto Rico;
  • Sarosh Nayar, franchisee at FASTSIGNS of Dallas, Texas;
  • Denise Acquaye, franchisee at FASTSIGNS of Newark, New Jersey;
  • Shu Yang, franchisee at FASTSIGNS of Burnaby, British Columbia; and
  • Shimon Osibel, franchisee at FASTSIGNS of Brooklyn, New York.

10.  Kevin Jones said, “Throughout my career, I’ve always sought opportunities to be a part of organizations that value diversity and inclusion – and that’s a big part of what attracted me to FASTSIGNS. I’m extremely proud to leverage my experience working for an LGBTQ-focused non-profit and serving on several boards to assist FASTSIGNS in furthering its diversity and inclusion initiatives to build a stronger brand and promote change in our industry.”

Achieves Record Growth in 2021

11.  In mid-November 2021, FASTSIGNS crossed the $600 million mark in network sales for the first time in company history, continuing to build on a growing sales track record. The impressive growth underscores FASTSIGNS’ adaptability to a rapidly changing business environment in response to the global pandemic and the continued demand for signage and visual graphics.

12.  Catherine Monson, CEO of FASTSIGNS International, Inc. and chair of the International Franchising Association, said, “At FASTSIGNS, our franchisees’ success comes first. From the beginning of the pandemic to now, we’ve been by their side every step of the way, helping them navigate unprecedented challenges and seize new opportunities for growth. We’re seeing demand for our services continue to escalate as events return and business resumes. Our franchisees’ role of being the go-to resource for visual communications in their communities continues to grow stronger every day. The growth and momentum we’ve experienced is a true testament to the strong FASTSIGNS network, our brand’s adaptability, and the rising demand for our services.”

13.  The roadmap for FASTSIGNS’ continued growth includes the progress made and the continued investment in building FASTSIGNS as a data-driven organization that focuses on understanding the levers that truly drive the business, the customer, trends and seasonality in customer buying, and ROI metrics to further direct company initiatives.

14.  FASTSIGNS has experienced strong double-digit growth and was expected to exceed more than 15% comp sales in 2021 and continues to expand the franchise network, awarding more than 25 franchises in 2021 to develop locations in markets such as Southern California, Western Canada, and Florida.

Company History

15.  FASTSIGNS was founded in 1985 by Gary Salomon and Bob Schanbaum in Dallas, Texas. Before starting FASTSIGNS, Salomon was a print broker and catalog developer. After visiting a computer shop in Austin, Salomon saw how quickly they were able to produce vinyl signs. Intrigued by the technique, Salomon convinced the computer shop owner – after agreeing not to open a competing store in Austin – to teach him how to utilize the new sign technique.

16.  Salomon asked Schanbaum to help him build a business using this new vinyl signage technique and FASTSIGNS was born. FASTSIGNS was an immediate success and franchising started in 1986 to keep up with the growing demand for the company’s services. By the beginning of the next decade, FASTSIGNS had expanded around the United States and opened its first international location in Canada. By the early 2000s, FASTSIGNS grew to over 400 stores. In 2003, FASTSIGNS was acquired by Roark Capital Group, an Atlanta-based private equity firm.

17.  Over the next decade, FASTSIGNS continued to expand around the world and in 2014, the company was sold to Levine Leichtman Capital Partners, a Beverly Hills-based investment firm. Just a few years later, FASTSIGNS changed ownership again, when it was sold to LightBay Capital and Freeman Spogli & Co. Today, there are FASTSIGNS locations in the United States, Canada, U.K., Cayman Islands, Mexico, Saudi Arabia, UAE, Chile, and Australia (where centers operate under the name Signwave).

Entrepreneur’s Franchise 500

18.  FASTSIGNS ranked No. 47 on Entrepreneur’s 2022 Franchise 500 list.

Section II – Estimated Costs

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2018

  • Outlets at the Start of the Year:  603
  • Outlets at the End of the Year:  620
  • Net Change:  +17

2019

  • Outlets at the Start of the Year:  620
  • Outlets at the End of the Year:  641
  • Net Change:  +21

2020

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

Company-Owned

2018

  • Outlets at the Start of the Year:  0
  • Outlets at the End of the Year:  0
  • Net Change:  0

2019

  • Outlets at the Start of the Year:  0
  • Outlets at the End of the Year:  0
  • Net Change:  0

2020

  • Outlets at the Start of the Year:  0
  • Outlets at the End of the Year:  0
  • Net Change:  0

Section V – Financial Performance Representations (Item 19, 2021 FDD) and Analysis

  • On December 31, 2020, there were 749 FASTSIGNS Centers open and in operation, of which 90 were international. 659 FASTSIGNS Centers were open and 636 were in continuous operation in the United States during the entire calendar year ending December 31, 2020. The analysis set forth below is based on the average yearly gross sales and median sales for those 636 FASTSIGNS Centers for 2020.
  • Of the 636 FASTSIGNS Centers open and in continuous operation in the United Slates during the entire calendar year ending December 31, 2020, 591 FASTSIGNS Centers were “Full-Service” Centers, 16 FASTSIGNS Centers were “Satellite” Centers, and 29 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 cash and credit sales as well as any goods or services received by the franchisee in exchange for goods and services sold at the FASTSIGNS Center. “Gross Sales” does not include sales or use taxes.

Part 1 – System-Wide Gross Sales – Centers Operating for the Entire 2020 Calendar Year

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

All Centers



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