FRANCHISES by Mark Gordon | Managing Editor
Research and long-term planning are key parts of the growth plan for a sign-making franchise company that grew more than 25% in 2006.
Steve White heads up a franchise company that, by name alone, sells the ability for entrepreneurs to own a sign and graphics store.
But White might as well be running Disney World when talking about what his company, Lakewood Ranch-based Signs Now, really does. "We are a dream fulfiller," says White, president of Signs Now, one of several franchise arms of Northville, Mich.-based Allegra Network. "We help make someone's path to their financial goals smoother."
While the company still just sells signs, White's hyperbole is not that far off reality. By using an innovative training program, Signs Now has become one of the fastest growing franchise operations in the country. Rather than just hand over the keys to a store, White says Signs Now's corporate trainers and managers take a nurturing approach to guide each franchise into profitability.
What's more, the company, which Allegra bought in 2005, is currently riding one of its biggest growth spurts. Same-store sales grew 15% in both 2005 and 2006, and annual revenues climbed 27% in 2006, from $75 million in 2005 to $95 million. Signs Now currently has 217 franchises in the U.S., Canada and England; it's in the middle of an aggressive campaign to add stores, seeking 20 new units in 2007 and another 40 new ones in 2008.
White, who moved from Michigan to the Lakewood Ranch area late in 2006 to run Signs Now, learned the franchise trade from one of the industry's masters: Domino's Pizza founder Tom Monaghan, who is a principal shareholder for privately-held Allegra and is also behind a project in northeastern Collier County to build a Catholic university flanked by homes and shopping centers.
White says he learned a lot from Monaghan, such as the importance of avoiding complacency when things are going well, as well as how to plan ahead for any unforeseen calamities. Above all, he learned that running a franchise company is in many ways the polar opposite of running an individual company or corporation. It takes more than simply delegating down. "It really challenges you to lead," White says, "and not manage."
White joined the Domino's corporate office in 1986 after graduating from Northern Michigan University and a stint in the Army. It was pizza-a-plenty days at the chain, as it was opening an average of two stores every business day, its biggest expansion ever. White left to start his own franchise consulting company after a few years. He began working for Allegra in 1994.
It was there that White and other Allegra executives began honing their strategy of teaching individual store-owners in their franchise network the value of thinking big, with the plans and research to back it up. At Allegra, and now Signs Now, that revolves around its Profit Mastery Program, which teaches franchisees everything from production scheduling and quality control methods to running a business by the numbers and controlling cash flow.
The program is made up of three parts. It starts with assessing each store's profit potential and then assisting the owner in coming up with a matching business plan. Next, new franchisees have access to comprehensive franchise-wide studies that look at topics including customer expectations, how the brand is thought of in different markets, industry trends, inventory and price-setting techniques.
After the information phases, each franchisee is placed in what's known as a performance group. That's where individual storeowners get to meet regularly with each other, in sessions led by an Allegra or Signs Now executive. The groups, with no more than six franchisees, go over strategies and talk about common problems. Says White: "It's like having a board of directors for your business."
Taken together, the steps of the Profit Mastery Program are essentially geared toward teaching franchisees how to stop small problems before they become big ones.
"We don't spend a lot of time dealing with franchises in a financial crisis," says White, "because we have such a high dose of preventive medicine."
That medicine is willingly gulped down by the company's franchisees. Mike Etchieson, who owns three Signs Now stores in the Sarasota-Manatee market, says the program is like getting prized data from a bank. "Anytime you can get information like that," says Etchieson, "especially aggregate, it's a big help."
And it helps franchisees perform the core business at Signs Now - to create, market and sell indoor and outdoor signs, banners, window graphics and other sign-related products. In the past few years, the company has expanded some product lines to keep up with technology, adding items such as digital color signs and banners, as well as trends, such as vehicle wraps.
Signs Now turns 25 years old this year; a husband-wife team opened the original store, then called Signs Now! One-Day Signs & Lettering, in Austin, Texas in 1982. In 1986, another entrepreneur bought the rights to the name and concept and embarked on a franchising campaign, including opening a flagship store in Bradenton.
Growth then came quickly, with 25 stores by 1989 and 100 by 1991. Signs Now, which moved its corporate office to Bradenton in 1992, also added stores through acquisitions, buying the Signery in 1995 and Signs Express in 1997.
Allegra, already one of the biggest printing and graphics franchise companies nationwide, bought Signs Now in 2005; last year the company moved into its new 6,000-square-foot headquarters in a Lakewood Ranch office park, which has enough space for its 20 corporate employees and its franchisee training center.
Allegra has 30 years of experience in the industry, with brands including Allegra Print & Imaging, Zippy Print and American Speedy Printing. The American Speedy unit was co-founded in the mid-1970s by Vern Buchanan, a well-known Sarasota-area entrepreneur who is currently a U.S. congressman for Sarasota and Manatee counties. Buchanan's brother, Darryl Buchanan is a top Allegra executive, in charge of franchise development.
Business. Signs Now, Lakewood Ranch
Industry. Signs and graphic design franchise stores
Key. Franchise company has grown significantly over the last two years using a three-part program.
AT A GLANCE
• Franchise Fee: $30,000 for the first center, $5,000 per center for each additional location; agreements are good for 20 years.
• Minimum requirements: $250,000 net worth and $75,000 liquidity
• Royalties: Signs Now gets 6% of each center's gross sales.
• Marketing: Franchisees pay 2% of gross sales for nationwide marketing.
Source: Signs Now