September 5, 2012
Signworld promotes a highly controversial business opportunity, claiming “Signworld has been a part of the industry’s profit and fun since 1988. With over 24 years in the business, Signworld has established itself as the leader in the no-royalties and no-rules sign business concept.”
“Signworld ruined my life both financially and mentally.
Do not believe what Ken [Kindt]or Jack [Werner] tell you.
“They only tell you the good in order to get your money.
“Failure rate is not 5% like they tell you, but more like 40%. Since we started our business in 2009, there have been over 22 signworld owners that have gone out of business.
“It’s been a very tough, long road. I would NEVER do this over again if given the chance.
“It’s made me sick.”
Phil McNally wrote:
“ I was an owner for over 6 years unsuccessfully.
“I worked very hard to make my business work, asked for help directly from Ken Kindt and those underneath and was continually blown off and shoved to the side.
The fact of the matter is this – he just does not care once he has your money.”
Signworld VP Jack Werner defends the Signworld opportunity here: SIGNWORLD: VP Jack Werner Fires Back at Critics.
And now Signworld defender Paul has shares his assessment of the Signworld opportunity and what it takes to be successful.
Are you familiar with the Signworld opportunity? Please share a comment below.
In response to Signworld critics on UnhappyFranchisee.com, Paul writes:
Wow, the vitriol is amazing.
Look, SignWorld just gets you started.
You can choose to be on your own or you can utilize the many forums SW has set up. Even after 8 years I still call up my fellow SW colleagues, OFTEN, for advice. The talent and experience out there is amazing.
SW is not a franchise. No royalties and rules AND no advertising. They don’t funnel business our way but that’s stated up front. Do Ken and Jack overstate? Yes. I used to work at Hewlett-Packard and we had some pretty good spin masters there too. I don’t think K and J are at all forthright about the turnover but I wonder if SW turnover is any less or more than other small biz TO.
I actually acquired an existing SW company 8.5 yrs ago and chose to ante up $35K to stay with the org. I visited 6 SW shops and asked them tough questions. I knew what I was getting into. There was no way I was going to do this without a great support network. And it is a great support network. It took me maybe a year to B/E consistently. The keys to success became obvious to me quickly. You need to be strong as the #1 guy/gal AND you need a strong #2 … a spouse or other relative. All my opinion. My wife is an awesome biz dev person.
We were growing very nicely until the Great Recession. This year we’re up 40% over our million dollar revenue year last year. Like any business you have to know that the hell you’re doing. You have to know how to hire. Have the cajones to fire. Have project management skills. Technical skills. I see a lot of newbies avoid what I call the ‘hard’ sign part of the business (wall signs of all types) and focusing on inkjet printing because of the margins and ease of sale. I also see new entrants by the boatload getting into that business.
With the new printers from, for example, HP (latex, UV cure) all you need is a living room and some media and you’re in business. Again, like any new business you need working capital to survive and thrive. You need to be crazy resourceful. Take calculated risks. None of this is for the faint of heart.
The bantering on this website is silly. If those who failed thought this would be a cakewalk then shame on them for being naive. Everyone stretches the truth. EVERY good businessperson knows that. So let’s not get all pollyanna about J and K’s selling style and put on our big girl pants and learn what you need to learn to succeed gang.
Don’t call me for advise about getting into the sign business or about what SW is like because I have a business to run. I’m not in business to help you start yours. I don’t get paid for it so I don’t do it. I will help my fellow SWOs because they help me. Yes, I’m a hard ass. A successful one. I figured out how to play the game. I don’t design signs, I don’t sell anymore, I don’t fab. I ‘ve hired great people. I fired the crappy ones. I do great things for my customers and we get more than our fair share of leads from Google because we’re *@&#$% brilliant.
Now I’m getting ridiculous.
Look folks, if you want a sure thing then go work for the Federal government. If you think staying with your corporate employer is going to be fun and secure then stay there and waste your life away worrying about the next round of layoffs. When you’re 55 and laid off or 60 or 65 and too poor to really retire or too dumb to realize that real retirement means doing nothing all day everyday and wasting your mind doing Sudoku or playing golf all day you’ll no one to blame but yourself because you didn’t take the risk.
I can’t believe I wasted this much time writing all this out but someone had to take this POV.
ARE YOU FAMILIAR WITH THE SIGNWORLD BUSINESS OPPORTUNITY? PLEASE SHARE YOUR OPINION OR INSIGHT BELOW.
August 15, 2012
UnhappyFranchisee.com’s list of the WORST FRANCHISES IN AMERICA (by SBA loan defaults) includes two franchise concepts that are part of United Franchise Group (UFG): EmbroidMe and SIGNARAMA.
In our post EMBROIDME Franchise Complaints, we reported that data released by the Small Business Administration (SBA) indicates that EmbroidMe franchise owners who qualified for SBA-backed franchise loans have an outrageously high loan default rate of 40%.
Additionally, we pointed out that the number of EmbroidMe franchise units declined by 125, or 33%, between 2008 – 2012.
In our post SIGNARAMA Franchise Complaints, we reported that the Small Business Administration (SBA) indicates that SIGNARAMA franchise owners who qualified for SBA-backed franchise loans have an disturbingly high loan failure rate of 26%.
The number of SIGNARAMA franchise units declined by 112, or 19%, between 2008 – 2011.
Message from Erin Crawford, Director of Franchise Development, United Franchise Group
Of all the referenced definitions listed below, including one defined by the Franchise Tax Board of California, for the phrases ‘ceased operations,’ ‘closed store,’ ‘out of business,’ and/or ‘terminations’ I have yet to find a one that includes the word ‘failure.’
I could keep going, but I think my point is clear. The fact that a business is no longer operating by no means does not mean it has failed.
In many instances a small business owner may decide to cease operations because he is retiring, moving, or not wanting to sell his business for other various personal reasons.
An article published by CNN Money in 2011 reported increases in small business failure rates by state listing the following top rates:
- California 69%
- Nevada 65%
- New Hampshire 38%
- Tennessee 36%
- Colorado 33%
The article also sites [sic] reasons for these failure rates because of real estate markets, tourism business, and manufacturing industries all hit by the recession. I couldn’t find one reason attributed to a franchisor.
Further, your interpretation of a failure rate for both EmbroidMe and SIGNARAMA actually make franchising look like a better option in comparison to the national failure rates of small business quoted by the article, “Across the United States, small business failure rates rose by 40% between 2007 and 2010.”
United Franchise Group and our family of brands took a proactive approach when signals for economic declines appeared in 2007. We shifted our focus and resources to help our existing stores with sustainability and scaled back on the sales of new stores. We invested our resources into top-notch marketing and training programs unparalleled in the industries we represent.
Thus in response to your questions:
[Question #1: Does UFG acknowledge 36%-37% as the EmbroidMe failure rate?]
#1- Absolutely not
[Question #2: Has UFG initiated a plan or coordinated effort specifically designed to stem these franchise failures?]
#2- See the answer to question 1.
Erin Crawford, MBA
Director of Franchise Development
United Franchise Group
ARE YOU A UNITED FRANCHISE GROUP FRANCHISE OWNER OR FORMER FRANCHISEE?
ARE YOU FAMILIAR WITH THE EMBROIDME FRANCHISE OPPORTUNITY OR THE SIGNARAMA FRANCHISE OPPORTUNITY?
PLEASE SHARE A COMMENT BELOW.
July 25, 2012
SIGNARAMA franchise opportunity: Are you familiar with it?
If so, please share your experience, opinions or insights with a comment below.
The SIGNARAMA franchise brand is part of the United Franchise Group (UFG).
According to the United Franchise Group website: “The experts at UFG have used their over 25 years of franchising experience to grow the franchising giant into a $500 million dollar success story with approx. 1400 franchise locations in 50 countries.
“The company includes franchise industry giants SIGNARAMA, the world’s largest sign franchise; EmbroidMe, the world’s largest embroidery franchise; Billboard Connection, an incredibly successful out-of-home advertising franchise; Transworld Business Advisors, for people to research business opportunities before investing and Plan Ahead Events, a home-based corporate event planning franchise.”
According to the SIGNARAMA website: “Your Success is Our Business – When you invest in SIGNARAMA, you gain access to one of the largest support staff in franchising, in addition to our resources and knowledge base… With nearly 1,000 stores in more than 50 countries, you can become part of an international brand that puts you ahead of the competition.”
However, data released by the Small Business Administration (SBA) indicates that SIGNARAMA franchise owners who qualified for SBA-backed franchise loans have an disturbingly high loan failure rate of 26%.
That qualifies SIGNARAMA for inclusion in UnhappyFranchisee.com’s list of WORST FRANCHISES IN AMERICA (by SBA loan defaults)
SIGNARAMA franchise owners have an alarming 26% SBA default rate.
The apparent drop in SIGNARAMA franchises in recent years is also a franchise red flag.
|SIGNARAMA U.S. franchises in 2008:||597|
|SIGNARAMA U.S. franchises in 2011:||485|
|Growth in franchise units 2008 – 2011 (#)||-112|
|Growth in franchise units 2008 – 2011 (%):||-19%|
|SBA loans granted since 2001:||107|
|SBA loan failure rate:||26%|
|Sources: Entrepreneur (growth), Coleman report (SBA)|
The inability to repay an SBA-backed loan (or any franchise loan, for that matter) indicates a serious situation for the franchisee.
It’s likely that SIGNARAMA franchise owners who received SBA loans may have collateralized their franchise loan with their homes or other personal assets, and many were unable to repay those franchise loans… despite the serious incentive to do so.
Are you familiar with the SIGNARAMA franchise opportunity?
What do you think accounts for the SBA loan failure rate of SIGNARAMA franchise owners?
What steps should SIGNARAMA be taking to stop further franchise failures?
Has SIGNARAMA taken serious action to address the problems that led to these loan failures?
Please share a comment (anonymous is fine) or Contact UnhappyFranchisee.com.
If you are a SIGNARAMA franchise representative or employee, please feel free to leave a comment or email us at UnhappyFranchisee[at]gmail.com.
ARE YOU FAMILIAR WITH THE SIGNARAMA FRANCHISE OPPORTUNITY? ARE YOU A CURRENT OR FORMER SIGNARAMA FRANCHISE OWNER? PLEASE SHARE A COMMENT BELOW.
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July 23, 2012
UnhappyFranchisee.com posted concerns related to the 33% SBA loan default rate of Goin’ Postal franchisees, a rate high enough to earn Goin’ Postal a spot in our list of WORST FRANCHISES IN AMERICA (by SBA loan defaults).
The high SBA default rate matches the termination rate of franchises for the past 3 years, as disclosed in the 2012 Goin’ Postal Franchise Disclosure Document (FDD).
At the beginning of 2008, there were 283 Goin’ Postal franchises in operation.
Another 37 were sold, for a total of 320 Goin’ Postal franchises.
Also during that period, 112 Goin’ Postal franchises were terminated (or ceased operation) for a termination rate of 35%.
In the response we received from Goin’ Postal CEO Marcus Price, Mr. Price does not dispute the number of closures. He discusses the reasons for those closures, and points out that Goin’ Postal has fared better than some of the other postal center franchises.
Message from Marcus Price, CEO, Goin’ Postal Franchise Corporation
We just saw this post about Goin’ Postal and I wanted to respond to each of the items specifically.
Firstly, as the CEO of Goin’ Postal Franchise Corporation I take my position very seriously and we strive as a company to make everyone successful. Unfortunately for many reasons not everyone is successful. Looking at the statistics you show, while we did have a net loss of franchises over the course of the 2008 – 2011 period of 7%, or 22 units, that was over the worst part of the recession. By contrast in the same period our similar competitors such as PostNet and Pak Mail had domestic loss rates of 24% and 21% (figures from Entreprenur.com). While each company has a good business model the large problem during the period was real estate costs combined with a slight drop off in business due to the recession. Franchisees that opened at the end of the real estate bubble signed leases with high rent rates due to the lack of commercial space available and when the recession happened and vast numbers of businesses closed up around them there was nothing to justify the high rents they were paying and so multiple units of all brands and industries failed for the same reason.
The personal account from the franchisees doesn’t help us improve anything as it is anonymous and doesn’t allow us to address their problems with them directly but we will respond to their points.
We inform potential franchisees about the shipping industry and that you have no right to ship with any carrier and that is even specified in our FDD. Each carrier is an independent business and as such they make their own decisions. We DO inform franchisees that they may lose their ability to ship UPS but in most cases they do not. This was one of the unlucky franchisees. As for DHL, Every company that shipped with DHL domestic lost the DHL service at the same time when they pulled out of the US and ceased offering anything other than international service. Our stores still offer DHL international services. The franchisees quotes that a single carrier is 30% of your business. With all things equal any carrier will be an equal percentage of your business as the others but if you lose one you do not lose that percentage of your business as customers will merely choose from what is available. Even though our main company store has all the major carriers there is still one carrier that gets 90% of the business as that’s where we steer it as we believe that’s what’s best for the customer.
We almost never sue for liquidated damages unless the franchisee has done something egregious to cause us to. While our franchisees sign a contract agreeing to 3 years of royalties as liquidated damages we ALWAYS work with the franchisee, generally taking their old Point of Sale Systems as a trade off as they are loaded with our proprietary software and we can recondition them for use in our classroom.
Training is NOT about after hours partying. Until several years ago, we did host a Wednesday evening barbeque at our headquarters for incoming franchisees so they could socialize with all of our staff and get to know everyone they would be interacting with. We cooked, supplied drinks, games and regularly played poker (not for money). We did it because we wanted to make franchisees part of our family and so everyone here knows who we are helping on the other end of the phone. For a few years we haven’t done those Wednesday evenings but we are almost ready to start them up again. We take pride in treating franchisees like family, we never thought someone could use socializing as a negative.
We do have other brands and business ventures like all entrepreneurs and large businesses. Whenever we have an idea to cross promote one of our businesses that will help franchisees we allow franchisees to take advantage of those other businesses to offer in their stores. Some ideas and come and go while other stick around for a long time. We also partner with other industries to allow our franchisees to offer additional products In their stores, usually at no cost to the franchisee. Anything we can do to improve profitability is our goal.
It pains me to know this franchisee failed as I take any closure very personally and always think “was there something else I could have done”. While we have a management team to interact with franchisees for every aspect of their business all franchisees know they can always come to me personally with a problem if they feel like they aren’t getting satisfaction with whatever issue they are dealing with.
Ultimately some businesses fail in any industry in any climate but we work hard every day to make our system a success and I always welcome recommendations from current and past franchisees so we can improve our system. Feel free to email me at firstname.lastname@example.org.
CEO. Goin’ Postal Franchise Corporation
4941 4th Street
Zephyrhills, FL 33542
UnhappyFranchisee.com thanks Mr. Price for responding openly to our post, and to participating in the discussion at our website. Our goal is to provide a discussion that spans both sides of an issue so that franchise buyers can make more informed decisions.
We also applaud Goin’ Postal for posting their current Franchise Disclosure Document (FDD) on their website, which enables opportunity seekers with an important due diligence tool early in the process.
ARE YOU FAMILIAR WITH THE GOIN’ POSTAL FRANCHISE OPPORTUNITY? PLEASE SHARE A COMMENT BELOW.
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October 16, 2009
Our earlier post SIGNWORLD Complaints contained excerpts of comments (from complaint site Ripoff Report) critical of the Signworld business opportunity, its founder and president Ken Kindt and Signworld VP of Sales Jack Werner.
On the same forum, Jack Werner, a former Signworld operator, fired back at his anonymous critics. Werner defended Signworld’s claims that its business opportunity has an extremely low failure rate, stating:
I joined Signworld as an operator in 1995 after doing a lot of my own careful due diligence… I did honestly break even, cash on cash, my first month in business, and wrote my first paycheck to myself in my sixth month after letting the businesses cash reserves build up. I ran my business for 10 years before successfully selling it for many times what I paid for it and I then joined Signworld’s corporate staff because I strongly believed in the business model.
I do know of others that broke even, cash on cash, in their first month, some that broke even in their second, third, and fourth month, most broke even around their sixth or seventh month, and for some it took longer. Believe it or not, we actually did have an owner who did break even his first week in business. But that was a true testament to the hard work that owner put in securing a large order before his doors were even open. It is an owner driven business. Some people just “get it” sooner than others do.
It is impressive that Jack Werner has experience as an owner operator, and that he was willing to publicly address his critics in a professional manner. However, his claim that one owner “did break even his first week in business” is especially troublesome.
How could an owner making a $183,000 investment “break even” his first week in business? Did the owner secure this enormous order, collect the money, receive the materials and complete all of the necessary work in the first week? Jack Werner must surely know that that’s what would be necessary for the owner to recognize monies received as income.
Does that mean that this owner maintained profitability since the first week, or that he did well his first week? How many achieve profitability from Day 1?
Perhaps Mr. Werner – or someone else familiar with this claim – can provide the specifics.
ARE YOU FAMILIAR WITH THE SIGNWORLD OPPORTUNITY? WHAT DO YOU THINK? SHARE A COMMENT BELOW.
October 16, 2009
SIGNWORLD claims it is a business opportunity, not a franchise. Others use a different term to describe SIGNWORLD: A Ripoff.
As an alleged business opportunity, Signworld makes bold claims on its website that would be illegal for a franchise, including lots of attractive earnings claims and promises of “high profit margins” and “high resale value upon retirement” for its $185,000 investment.
But comments on complaint website Rip-off Report are critical of SIGNWORLD, founder Ken Kindt and VP of Sales Jack Werner. Here are some excerpts:
December 16, 2008, dh from San Antonio, Texas wrote:
…THEY PROMOTE “No previous industry experience is necessary” because SIGWORLD is supposed to reduce the risk of failure. B.S. … It is bad enough that SIGNWORLD sell this lie by building up misleading statements on statistics (never see this in writing though) of low failure rate and cleverly hiding the awful truth of failure. I was told 5% in the 20 year history. I found out it’s closer to 40% once I got in and they had my money….
It’s a shitty competetive dog eat dog business. Your lucky if your gross profit ends up at 50% with this model…. any one can order the bread and butter business you want online for half the price you can do it for.
One more thing…. CITY REGULATIONS are getting tougher and tougher to put up signs. You basically make a sale and go back and research wether you really have a sale or not…
YOU WILL LOSE MONEY EACH MONTH FOR 2 TO 3 YEARS… it seems about 80% of new owners lose money for 2 or 3 years and they either close up or continue to work without a paycheck. This is true even though you do exactly what SIGNWORLD and Jack Werner said you should do….
MY ADVICE-Rather than wait until your broke……STAY AWAY!!!
December 31, 2008 Anonomous of Ofallon wrote:
They underestimate the capital required for start up. The performa’s they provide you with are erroneous….plan on an additional 100k over what they tell you if you want to stay in business. I asked for help trying to sell mine and JW’s comment was…”it would be against our best judgement to try and sell a failing business to a perspective client” How ironic!!
January 23, 2009 Rk of Spokane wrote:
…If you feel compelled to spend well over $250K in capital, I recommend that you convert it to dollar bills, pile it up at a camp site, light it on fire, and gather the kids around for a good old fashioned marshmallow roast rather than waste your time with Signworld.
Seriously, if you really want to get into the sign business, just visit a few sign shops and they’ll sell to you on the spot. Because the only thing that owner wants, is to get the bloody Hell out of his Signworld mistake…
October 13, 2009 signgirl of newnan wrote:
I work for a signworld company, not saying where, but have been there since the start up…
Ken Kindt sells dreams, and many people have bought it, i wish i could sit down with the man, and ask him how he sleeps at night knowing he has reemed so many people, but you know, people like him would laugh if they read this, because money has taken over ethics and morals.
Be sure to read: SIGNWORLD: VP Jack Werner Fires Back at Critics
ARE YOU FAMILIAR WITH THE SIGNWORLD OPPORTUNITY? WHAT DO YOU THINK? SHARE A COMMENT BELOW.