SIGNWORLD: Great Opportunity or Ripoff?
October 16, 2009 by Sean Kelly
Filed under Business
Signworld delivers what they promote: a business that has the potential to be a lucrative enterprise.… Signworld is a great investment… It’s a fun and profitable business… Signguy1 (Unhappy Franchisee)
SIGNWORLD is a huge ripoff… 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. RK of Spokane (SIGNWORLD Complaints)
According to its website, “Signworld is a national organization with more than 240 independently owned sign companies, which provide commercial custom signage and graphics… The ongoing support and training provided along with state-of-the-art equipment will leave the competition behind. But most importantly, with Signworld, you own your business entirely and there are no royalties.”
Signworld boasts that it offers a business opportunity, not a franchise. 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.
Is SIGNWORLD a solid opportunity?
Some claim it’s a scam with an incredibly high failure rate. Read those comments here: SIGNWORLD Complaints.
Others, like VP Jack Werner, claims its a great opportunity with very few failures. Read Jack’s opinion here: SIGNWORLD: VP Jack Werner Fires Back at Critics
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logo: Signworld
Finally, it is only through a regional approach that one could develop new models for lasting security and cooperation in the region while trying to unify these divided countries around youth as their most precious asset. ,
Sean,
I fail to see what you see as illegal claims that are posted on our website.
We do not post any earnings claims and have nothing of the sort. The comment’s about “High Profit Margins” and “High Resale Value” are very much true within the industry and any business broker will tell you the same about the custom manufacturing industry. This, as like any other business, is owner-driven. If they successfully follow the marketing techniques that have proven to be effective for a vast majority of the Signworld Owner’s in the past, there is a good chance that they too will have a legitimate opportunity to succeed. Also, just like any other business or industry, there are going to be operations that are under-performing, those that are hitting expectations, and those that over-performing year after year. We can’t guarantee success but through the validation process with each candidate we evaluate their potential, their goals, and allow them numerous opportunities to discuss their questions and concerns with as many existing operations that they would like to speak with. It is through those discussions with other owners that they should be making their own decision.
Our operation, as previously mentioned by Jack Werner, did break-even in our first month in business. We “cash on cash” broke even, meaning that we had enough incoming cash to cover our expenses (cost of goods, overhead, and payroll). That is what is meant by hitting a break-even point, and that is the way it is explained to anybody who is investigating Signworld as a viable business to enter. In all, the overall investment was recouped by the end of the 2nd year. This calculation in which the other author of the linked article noted as a “break-even” point is what would be called a “Return On Investment”.
Because we have lived the business that we help people into, we are more than happy to share the good with the bad. Believe me, there is not a business out there that is perfect, but if you can mitigate the challenges before you start, and determine your skill set and abilities, you will have a far better chance to succeed. It is our true goal to help everyone who joins Signworld to succeed.
If you have any questions or concerns about this comment or anything that was written on any blog site, please feel free to contact us through our website at http://www.signworld.org.
Dan Werner
Signworld
Dan Werner wrote: I fail to see what you see as illegal claims that are posted on our website.
Dan: I didn’t say that they were illegal earnings claims, as you are offering a business opportunity and not a franchise. I wrote “Signworld makes bold claims on its website that would be illegal for a franchise…”
Franchisors are forbidden by the FTC from making representations regarding financial performance other than those disclosed in the Financial Performance Item 19 of the Franchise Disclosure Document (FDD)and for which they provide a reasonable basis.
If you were marketing a franchise, I’m sure your franchise attorney would advise against wording, statements and promises that appear on your website, such as:
“high profit margins”
“high resale value upon retirement”
“Greg Kyler, Modesto, CA, grosses $1.3 million+ with less than a 200,000 population in the entire city, and purchased his own 7,500 square foot building.”
“Craig Van Velzer, San Diego, CA, hit $4.3 million in sales in 2007 and hopes to hit $7 million for 2008.”
“Randy Clemens, Columbia, SC, did $180,000 last year with one customer…”
“John Dann, Trabuco Canyon, CA, works part time out of his home with no employees and grosses over $400,000 annually and operates at a 50% net cash flow.”
As a franchisor, the FTC would require you to define exactly what you are referring to when claiming a franchisee “broke even” in his first week, as many would assume you meant he recouped his investment, not that he had positive cash flow.
I’m not an attorney. I’m a franchise marketer who has been beaten up by franchise attorneys for 20+ years. But even as a business opportunity, I think your pre-sale marketing claims with regard to financial performance are, in part, adding to the backlash you see erupting on the Internet.
Feel free to email me at info[at]ideafarm.net and I can provide you with some suggestions in private.
According to its website, “Signworld is a national organization with more than 240 independently owned sign companies, which provide commercial custom signage and graphics… The ongoing support and training provided along with state-of-the-art equipment will leave the competition behind.
STATE OF THE ART EQUIPMENT…HA! THEY ARE LIVING IN THE PAST! THEY OFFER NOTHING ALL COMPETITORS HAVE IN REGARDS TO EQUIPMENT. AS A MATTER OF FACT IT IS REALLY JUST THE BARE MINIMUM…AND THE PRICE TAG IS RIDICULOUS!