Signal franchise

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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.

Signal business details

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:

  • Offices: More than 1000
  • Required Investor net worth: not stated
  • Required investor liquid cash: not stated
  • Min. investment: £57,000
  • Max. investment: £273,000
  • Standard franchise term: 3 years

Can I start a Signal franchise?

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.

How much does a Signal franchise cost?

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:

  • Royalty fee: 4% of gross revenues
  • Franchise support fee: 5% of gross revenues
  • Strategic partner fee: 2% of gross revenues
  • Transfer fee: Greater of £0.05 per capita in the franchise area or 20% of franchise fee
  • Audit: Actual cost of audit 
  • Renewal fee: None if sales targets are met, otherwise, £0.25 per capita in franchise area

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Estimated key costs to open a Signal franchise:

Key Costs GuideLowHigh
Franchise fee£50,000+£200,000
Office lease/rentvariesvaries
Patrol vehicle£2,250£37,000
Transportation of vehicle£300£1,500
Tax, title and license fees£500£3,500
Workers’ compensation insurance£150£800
Local advertising£500£500
First month’s rent £0£5,000
Additional costs – first three months£3,000£8,000

Are Signal franchises profitable?

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 amortisation) 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.

What is the failure rate for a Signal franchise?

Very low. The failure rate for a Signal franchise was 0% in 2023.  

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What are the franchise territory policies for Signal?

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.

What franchise resources does Signal offer?

Signal support for franchisees includes:

  • Training: Franchisees and the manager(s) of the franchised business must successfully complete the initial training program before opening their franchised business. The duration of the initial training depends on the franchisee’s experience, aptitude and progress, but is anticipated to last for five working days or until Signal feels franchisees are fully competent to operate an independent franchised business. The company may also offer additional training programs or seminars as they deem necessary.
  • Marketing support: Signal provides promotional and other marketing support for their franchisees.
  • Third-party financing: Signal provides limited financial support for investors seeking franchise funding. Alternatively you may be able to obtain more economical and flexible funding solutions from the many independent funders who provide business loans to franchise operators.

Why should you start a Signal franchise?

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 the UK 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.

What is the process for starting a Signal franchise?

It begins with an application. Start the process today.

Secure franchise funding with Swoop

Starting a new franchise can be an exciting opportunity, but it’s easy to get lost in a maze of business loan applications that can make funding your new security business like too much hard work. Instead, cut out the hassle and cut to the chase. Swoop has the best lenders for the best franchises across the UK. Just tell us what you need and leave the rest to us.

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Written by

Chris Godfrey

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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