How Much Does it Cost to Open a Resale Franchise?

One of the first questions franchise prospects often ask when vetting concepts is about the initial investment. Resale franchises’ cost will vary based on your location, inventory and an array of other factors. However, the startup costs to get your franchise up and running will generally be upwards of $250,000. 

Specifically, the initial investment for Winmark resale franchise brands typically fall within the following ranges: 

• Play It Again Sports® - $275,000 - $375,000
• Once Upon A Child®- $250,000 - $350,000
• Style Encore® - $250,000 - $350,000
• Plato’s Closet® - $250,000 - $350,000
• Music Go Round® - $300,000 - $350,000

Here’s more on the top startup costs associated with opening a resale store, as well as how our corporate team helps franchisees maximize their return on investment: 

Initial Franchise Fee and Required Liquid Assets

Just as the investment range for each franchise is different, there will also be varying capital requirements for each franchise fee, as well as minimum net worth and liquid assets.

You’ll need a minimum of $90,000 to $105,000 in non-borrowed personal resources and liquid assets (such as cash, stock and marketable securities), in order to meet the minimum financial requirements for Play It Again Sports and Music Go Round. A minimum of $75,000 to $105,000 is needed for resale clothing brands Once Upon A Child, Plato’s Closet and Style Encore.

While these are the required liquid assets, having more cash may increase your ability to obtain financing for your store. Although Winmark does not provide direct financing, we assist you in preparing a comprehensive business plan to help secure an SBA loan or other financing options once you’ve become a franchisee. All Winmark brands are listed under the SBA’s Franchise Registry, which helps streamline the process.

The franchise fee represents another important upfront cost you’ll need to pay to get your resale franchise up and running. The franchise fee for Winmark’s resale brands for an initial store is $25,000.

Finding Prime Real Estate for Profitability

First and foremost, finding the right location for your resale franchise is crucial to your success. The retail space should have high visibility and accessibility, in order to attract drive-by and walk-by customers and bring more people through your doors. 

Many resale franchise owners opt to set up shop in local or commercial strips with high foot traffic and a strong retail presence. This helps ensure they’re able to capture demand from shoppers already in the area. At the same time, it’s just as important to ensure your ongoing rent payments or property taxes are low enough to turn a profit. 

Most of our franchise partners have never owned a franchise before, so they haven’t been through the process of finding and negotiating a retail lease. Winmark and our network of local and national tenant brokers assist in every step of the process, from site review and selection to the lease signing. The lease is one of the largest financial commitments you’ll have with opening any brick-and-mortar business, so it’s important to secure a strong site within a reasonable price point.

Inventory Technology, Sourcing and Purchasing

Stocking the inventory for your resale franchise represents another significant financial investment.

As part of the two-tiered resale business model, your customers are also your inventory suppliers. In other words, your merchandise will be coming directly from residents within your local community. It can be difficult to know which inventory is right for your store, particularly with respect to the category, style and quality of the merchandise. The cost of each item will vary, based on each component. 

During training, Winmark franchise partners learn how to utilize our proprietary computer system, called our Data Recycling System (DRS). This database and point-of-sale (POS) system help franchisees purchase and price inventory, based on more than 20 years of system-wide transactional data. Not only does it help determine a fair price to offer the seller, it also helps them identify which product types will be the best fit for their particular store. 

Whereas most independent resale store owners need to research, appraise, price, markdown and individually track each and every item they purchase, DRS enables Winmark franchisees to skip this entire time and labor-intensive process altogether. That way, they can focus on selecting the right products to buy, without the added burden of worrying about retail pricing.

DRS’ strong pricing model and comprehensive matrix – for both buying and selling product – helps franchisees efficiently build up their inventory, and price it to resell quickly yet profitably. 

We recommend franchisees open their doors for eight to ten weeks before their grand opening, during which period they only purchase quality used goods. This helps them acquire a good amount of initial inventory.

Training and Support

Training and support are critical components of any successful business, particularly for first-time owners. This is why Winmark offers extensive initial and ongoing training for franchisees across our system.

Initial training includes more than 75 hours of classroom instruction and hands-on, in-store training on everything from marketing, technology and business plans to retail store site selection, set-up and operations. In addition to training on each technology system, our computer support center offers access to technicians who provide assistance with hardware, software and operational questions each day of the week.

Field operations managers provide ongoing training online via the extranet, as well as at annual franchise conferences and regional meetings. Similarly, you’re given free access to classroom training throughout your franchise ownership, in case you’re looking to refresh any of your knowledge and hone your skills.

Marketing and Advertising

Many small, independent resale store owners take on marketing and advertising efforts themselves, investing sparse amounts of time in social media and grassroots initiatives. While marketing may seem like an area where you can cut corners as a new business owner, you actually can’t afford to.

Winmark franchisees, on the other hand, have the support of a marketing manager and team dedicated to delivering professionally produced television and radio commercials, digital marketing assets, event marketing materials, local store marketing programs and more.

As a Winmark franchisee, you will have access to a media buyer experienced in working with your individual resale brand. They’ll work with you to lay out your media plan ensuring your marketing dollars are spent in the right places to generate the best return on your investment. And with an international brand presence, you’ll benefit from widespread brand awareness with which startups can’t compete.