YESCO Franchise Sales, Costs & Profits (2023)

If you’re looking for a recession proof business, B2B signage companies are a great way alternative. Despite its smaller size vs. the giants FASTSIGNS and Signarama, YESCO is a great franchise you should seriously consider.

Indeed, YESCO can be a very profitable business. On average, it would cost you $209,000 to open a new franchise. Yet, this same franchise would earn $665,000 in gross sales per year on average, impressive.

In this article we’re looking at YESCO and its latest Franchise Disclosure Document to find out how much it (really) costs and how profitable it really is. Let’s dive in!

Key stats

Franchise fee	50,000
Royalty fee	6.0%
Marketing fee	5.5%
Investment (mid-point)	$209,000
Average sales	$665,000
Sales to investment ratio	3.2x
Payback period	5 years
Minimum net worth	$250,000
Minimum liquid capital	$100,000

About YESCO

YESCO is a US-based company that manufactures electric signs, outdoor billboards, interior displays, digital LED boards, skyline signs and gaming displays. 

Thomas Young founded the company in 1920 as a manufacturer and supplier of neon signs and neon tubing in Utah.

YESCO opened its first branch office in Las Vegas in 1933, erecting its first neon sign at a local club. 

Headquartered in Salt Lake City, the company has been franchising since 2011.

Today, YESCO is an internationally recognized leader in the sign industry, operating in over 102 locations worldwide with 53 stores in the US.

YESCO franchise pros and cons

The Pros:

• Development and support specialists: A trusted support team to guide franchisees throughout their ownership journey. Every new franchisee is assigned a regional development manager to understand the value and the dos and don’ts of operating a YESCO franchise. 
• No mandatory sign experience: Aspiring business owners don’t need sign and lighting expertise to become part of YESCO. 
• Proprietary business management software: Franchisees can rely on the company’s proprietary technology, Servizio, to manage and maintain their businesses. 
• Marketing materials: YESCOs’ mass media advertising through solid lead generation processes bring value to franchise owners.
• Financial support: The franchisor partners with third-party financial bodies to help brand owners cover the franchise fee, equipment, inventory and startup costs. 
• Home-based opportunity/mobile unit: Franchisees can manage their businesses from home or as mobile units. 
• Exclusive territories: Exclusive territory rights protect franchisees from competing against other YESCO franchises. 

The Cons:

• No absentee ownership: Franchisees must participate in day-to-day operations. 
• Not a part-time business: A YESCO franchise isn’t a part-time investment opportunity.

YESCO franchise costs

You would have to invest an average of $209,000 to start a YESCO franchise.

The investment covers all the start-up costs you may need to open a YESCO franchised business. You must pay the franchisor an initial franchise fee of $50,000. In addition to this franchise fee, the investment also covers:

• Formulation costs: rental improvements, signs, deposits, etc.
• Equipment: furniture, fixtures, equipment, and software; computer hardware and software.
• Initial marketing fees: grand opening advertising, marketing and supplies, office branding package
• Operating costs: rent, training expenses, insurance, professional services, vehicles, inventory, and tools; additional funds for 3 months, etc.

Startup costs

Here’s the full breakdown of costs:

Type of Expenditure	Amount
Initial franchise fee	$50,000
Formulation costs	$1,500 – $61,000
Equipment	$1,000 – $20,500
Initial Marketing fee	$1,500 – $7,700
Operating costs	$10,000 – $213,000
Total	$65,000 – $352,200

YESCO franchise fees

YESCO franchise revenue

On average, a YESCO franchise makes $665,000 in sales per year.

This number is the average sales per franchise business for 54 of the 59 franchised businesses that operated in all of 2021.

Of course, this is purely an average: revenue per franchise varies greatly from one franchise to another. For example, the top quartile franchises had an average revenue of $1.4 million whilst the bottom 25% had an average revenue of (only) $156,000 per year…

YESCO franchise profits

We estimate that a YESCO franchise makes $60,000 in profits per year (9% EBITDA margin).

That’s what we obtain if we use the average revenue per unit ($665,000) and estimate profits by using cost percentages as shown below. Indeed, like other franchisors, YESCO chose not to disclose any detailed profit-and-loss in its Franchise Disclosure Document for its franchises.

Therefore, we had to make assumptions instead. More specifically, we used average cost percentages (for COGS and labor) using similar printing and signage franchises such as Signarama, FASTSIGNS and others.

Note that YESCO does provide a “Gross Margin” in its FDD which essentially is an adjusted EBITDA (includes COGS, royalties, direct labor and “direct overhead”). This Gross Margin stands at 47.1% of revenues on average, yet it is unclear exactly what costs are included and those that aren’t to compute EBITDA. Hence we decided to show our approach below instead.

Profit and loss	Revenue	% revenue	Source
Revenue	$665,638	100%	as per FDD
COGS	$(192,369)	29%	industry average*
Gross Profit	$473,269	71%
Staff	$(238,298)	36%	industry average*
Royalties	$(39,938)	6%	as per FDD
Other operating costs**	$(133,128)	20%	assumption
EBITDA	$61,904	9%

Is YESCO a good franchise investment?

If we compare the initial investment cost ($209,000 on average) to the future profits of the business, we obtain what we call the payback period. In other words, the time it takes to repay the upfront investment with the profits generated by the business.

For YESCO, we obtain a 5 years payback, in line with most promotional marketing and signage franchises. So, on average, it would take you 5 years to repay the initial $209,000 (to bank(s) and/or investor(s)).

Whilst this is a great payback (and on that basis, a great investment), it’s important to note that this is purely an average. Indeed, the payback period may be very different if your initial investment is for example higher, and profits higher. Note that for the purpose of this 5 years payback, we used a net profit margin of 5-7% of revenues.

Disclaimer

Disclaimer: This content has been made for informational and educational purposes only. We do not make any representation or warranties with respect to the accuracy, applicability, fitness, or completeness of the information presented in the article. You should not construe any such information or other material as legal, tax, investment, financial, or other professional advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, advertisement, or offer to buy or sell any franchises, securities, or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the franchise and/or securities laws of such jurisdiction.

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