Print and signage business, Signarama has developed two key strategies to keep location saturation and competition down.

The company is set to open its 100th store in the Sydney suburb of Mosman at the end of the month, and additional new sites will be carefully selected.  

National director Evan Foster says there is room for around 25 new stores across the country, and adds franchisee success underlies the company’s decision to avoid over-saturation.  

“We don’t want to put a store on every single corner because you get to the law of diminishing returns and sooner or later everyone is going to suffer.

“We know the rough size of the territory that our franchisees need to be successful, and beyond that it doesn’t make sense for us to bang in more stores,” he adds.

STRATEGY ONE: REGIONAL FOCUS

Signarama is shifting away from metropolitan cities, instead opting to add new sites in regional areas where the brand doesn’t have a presence.

“Growth is probably going to slow down over the next couple of years in terms of new stores, but we will continue to go into more regional markets,” Foster says.

“Most of our metropolitan areas are full – there are probably two new stores across Australia’s five capital cities that we could open in the future.”

Signarama has already opened a series of new stores in regional locations, and additional regional cities and towns are in its sights.

“We’ve opened up in places like Mackay, Echuca, Wyalla, Wagga Wagga, Dubbo and Casino and we are going to see the most growth in areas including Canberra, Darwin, Townsville, Rockhampton, Mildura, Albany and Port Macquarie over the next two to three years,” Foster says.

STRATEGY TWO: COMPLEMENTARY MODELS

Signarama is also considering complementary models, such as installation or wholesale divisions, as well as satellite stores.

While nothing has been confirmed, the idea is that they will enable franchisees to continue to grow their business and increase revenue.

“We don’t [have different models] yet, but we are toying around with some ideas because we are getting close to crucial mass or close to exhausting our opportunities across the country,” Foster explains.

“We want to keep growing not just our franchisees but ourselves as a company, so we are looking at something we can really tie in with our existing business that will allow our guys to focus on their core business and generate more money.”

Satellite stores could also be an option, Foster says. “A franchisee could own a production facility and have a couple of sales offices within their area – we might see a bit more of that to expand our footprint but not infringe on anyone’s territory.”

THE CONVERSION PROCESS

While keeping concentration down is key, Foster says Signarama is open to conversion opportunities, where an independent print or signage company adopts the company’s branding, marketing materials and so on.

“We’ve had a number of these in the last three or four years, for example the owner of a printing company in the New South Wales town of Murwillumbah wanted to get into wide format signage and needed the expertise of a franchise group behind him to do that, so he came to us.

“Never in a million years would we have put a pin on the map in Murwillumbah, but he approached us and so there was a conversion – he’s got a successful print company and a set of existing clients, which is a pretty good fit for us,” he explains.

THE ROLE OF TECHNOLOGY

Foster is the first to recognise the print and signage industry is in a constant state of change, and notes new technologies enable franchisees to bring more of the work they do in-house.

“Even in the time that I’ve been with the company, which is eight years now, the technology has completely changed, and the eight years before that it had completely changed as well,” he recalls.

“Traditionally our model has utilised a lot of wholesale supply networks, however as technology improves and the price of it comes down many of our franchisees are expanding into things like flat bed digital printers and 3D routers, which allow them to control a lot more of the production process themselves.”

He adds Signarama aims to see its franchisees utilise new technologies to deliver services no other player in the market can.  

“Anyone can provide a standard metal sign to get screwed on to the side of a concrete wall, but to do something completely different with a technology a customer hasn’t even heard of yet is the edge that we want to be able to provide – we want to deliver solutions to help our customers stand out.”

He says the Signarama business, as well as many of its franchisees are proactively engaging with and embracing new technologies.

“We’ve got a research and development team in our head office in the US who are always reviewing equipment and new technologies, and they are funneled down to franchisees.

“We’ve also got quite a few franchisees who are very mature in the business now and they take themselves off to trade shows in China and the US to stay abreast of current developments.”

SIGNAGE SUCCESS?

Foster believes signage is rather recession proof when compared to other industries, and it seems the brand was largely unaffected by the global financial crisis (GFC).

“No industry is recession proof, but signage is almost as good as it gets because every business needs and uses a sign every day, so we know we are in a pretty good industry from that point of view.

“We’ve seen a little bit of rationalisation within the industry but not a terrible amount,” he says.

Signarama entered the Australian market 16 years ago, and its fared particularly well in recent times. “The last couple of years have been really strong for us in terms of both company and store growth. 

“We’ve just gone through a rebrand which has been really well received, not just by our franchisees but our customers as well – it’s put us in a really good position to launch into the next few years,” Foster adds.