Signal is a franchised private security company offering a range of security options to residential and business customers. Signal claims to be Entrepreneur magazine’s #1 security franchise with 26% growth year on year and network gross revenues of $267 million in 2023.
Headquartered in Omaha, Nebraska, Signal, (previously known as Signal 88 Security), was founded in 2003. The company has offered franchise opportunities since 2008. Signal competes with other home and business security companies, providing security patrols and surveillance, security consulting, executive protection, and training in personal safety, risk avoidance, and threat management for residential and commercial customers. At the end of 2023, the business had more than 1,000 offices and +4,600 customers spread across the globe.
Signal at a glance:
Starting a Signal security franchise is affordable, with investments that start as low as $57k. Additionally, the company does not mandate a minimum net worth or liquid cash requirement. However, be aware that franchise fees for this opportunity can be steep depending on the size of your franchise territory. Average start-up fees paid to Signal are $70,000 and you will then need to cover other costs and carry overhead for three to six months until you can secure enough customers to break even. Expect to pay at least $150,000 to get your Signal franchise off the ground.
Signal does not require franchisees to have previous security experience, but clearly that would help. The company prefers franchisees who are directly involved in the running of the business. This makes this franchise an unlikely candidate for passive investment.
Set-up costs for a Signal franchise range from $57,000 up to $273,000. The variance is largely driven by the initial franchise fee that can be as low as $50,000 or more than $200,000 depending on the size of your franchise territory. Military and law enforcement veterans may be eligible for a 10% discount off the franchise fee.
After opening, you are required to pay an array of ongoing fees and charges. They include:
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| Key Costs Guide | Low | High |
|---|---|---|
| Franchise fee | $50,000 | +$200,000 |
| Licenses | $500 | $5,850 |
| Office lease/rent | varies | varies |
| Patrol vehicle | $2,250 | $37,000 |
| Equipment | $0 | $3,000 |
| Transportation of vehicle | $300 | $1,500 |
| Tax, title and license fees | $500 | $3,500 |
| Insurance | $250 | $3,000 |
| Workers’ compensation insurance | $150 | $800 |
| Wages | $0 | $10,000 |
| Local advertising | $500 | $500 |
| First month’s rent | $0 | $5,000 |
| Additional costs – first three months | $3,000 | $8,000 |
Yes. According to the company’s own figures, Signal franchises average a gross profit of 39%. On average franchise gross revenues of $1,227,000, that represents an EBITDA (earnings before interest, taxes, depreciation and amortization) of $478,530. Net profits – what franchisees can collect – would typically be 30% to 50% of this figure, or $140k to $240k, which ranks as good to excellent.
Very low. The failure rate for a Signal franchise was 0% in 2023.
Signal grants franchisees the right to operate a Signal business in a defined territory or territories. A territory is generally defined as an area having a population of approximately 100,000 people. Franchisees may receive one or more protected territories, which will be defined by ZIP codes, county lines, or city limits and as stated in the franchise agreement. Signal reserves the right to reduce or alter the territory or territories upon renewal of the franchise. If franchisees are granted a territory (or territories), the franchisor will not locate another franchised or company-owned Signal business within their territory. The franchisor’s willingness to continue the territory under the agreement depends on whether the franchisee achieves certain sales volumes.
Signal support for franchisees includes:
Low to moderate start-up costs, excellent net profits, almost zero failure rate – the good news seems abundant, and a Signal franchise seems like a great business opportunity. However, take note that the private security market in Canada is mature and there are an array of strong competitors to Signal. Additionally, after high growth from 2012 to 2017, industry growth is now static or falling, with 2023 market turnover slightly less than it was in 2019. Is there still room for meteoric expansion in the industry? Investors should do their homework carefully before jumping into any franchise. Good as Signal looks on paper, that rule still applies.
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Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Barclays Bank, Metro Bank, Wells Fargo, ABN Amro, Quidco, Legal and General, Inshur Zego, AIG, Met Life, State Farm, Direct Line, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of consumer and business finance and insurance.
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