Happy families: Franchises in the signage and graphics sector
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By Morwenna Kearns
4 November 2011
Buying a franchise may provide a combination of independence and marketing support – such as news coverage on Signarama's new Thames Valley branch
In the graphics sector we hear a lot about the big guys: Signs Express, Fastsigns and Signarama on the signage side; Kall Kwik, Printing.com, and Prontaprint in the printing and repro corner; and Totally Dynamic for vehicle wrapping. All of these are franchise companies with branches throughout the UK – and further afield – and some industry members have mixed feelings about their perceived dominance and how this affects their competitors – and their franchisees. Part of the issue is that it's hard to separate, mentally, a single sign-making centre, serving its local community, from the giant networks familiar to millions of people. There are most definitely both pros and cons, but what is clear is that franchise chains have gone through the recession unscathed compared to many independent, individual sign-makers and print shops.
A few months ago I noticed a branch of Printing.com I had previously used had closed down, leading me to research the brand to clarify it was a one-off, which it turned out to be. It made me wonder if other people had spotted the empty windows and assumed it wasn't just that branch but the whole company that had gone bust – much like Habitat and Borders up the road – and struck the name Printing.com off their mental Yellow Pages. It is this sort of negative association that can harm a big company, but, of course, the opposite is true too. The biggest human-interest signage story of the year has probably been the 'We Love Enfield' campaign launched by the owner of Fastsigns in the north London borough in the wake of the England riots; people no doubt noticed the name 'Fastsigns' because it was already familiar to them, and presumably went on to recall it with a positive impression. An argument, however, is that franchise companies have dedicated, centralised marketing departments that ensure the brand is nationally familiar. If a small, independent signage provider was able to whip up the same level of coverage, they may be taking orders from Lands End to John o'Groat's too.
In addition, there is a small but noticeable shift away from multinationals, and even multiregionals, and back to local businesses – a movement that took a violent turn in Bristol this year when protestors fought, literally, to stop a Tesco moving into the overwhelmingly independent area of Stokes Croft. It's hard to say if the supporting-the-underdog mindset will continue post-recession or if it will affect primarily B2B markets like signage significantly, but it's something to bear in mind.
The recession has of course been the undoing of many business plans. Sign-makers and printers considering starting their own businesses before the credit crunch hit may well have found a rescuer in a franchise, for instance, which generally require less upfront funding to get started, and provides training, marketing support and discounts on materials too, as well as a household name. Writing for Output this summer, Fastsigns UK's managing director Garth Allison gave more weight to this argument: "Choosing to open a franchise is a way to go into business for yourself with someone on your side – you have a corporate team and resources to call upon that other independent businesses do not. For example, for someone opening a business for the first time, site selection and lease negotiating is an overwhelming process. With a franchise, you have access to resources and staff that can assist you." There are also, often, awards schemes and networking events run by franchisors for their centre owners and employees, enabling a more informal support structure.
Lower start-up fees or not, establishing a franchise is still not necessary cheap: Signarama offers a turnkey franchise in return for an initial fee of £26,500 and a minimum investment of £30,000, while Fastsigns requires liquid funds of £35,000 from new franchisees, and Signs Express specifies a start-up requirement of over £62,000 and a working capital requirement of around £27,000, for instance – meaning that you will probably need savings as well as a loan from a banking sector which is still wary to lend.
Each of these, and other franchise companies, give you different things for your money so it's well worth attending a presentation or a trade fair at which they are exhibiting to find out more. As well as sign-making shows, there are several general franchise fairs where Fastsigns et al rub shoulders with McDonald's, which can be a positive experience as you can compare the signage market with completely different sectors – and decide if the industry's really for you.
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