Need some opinions about a new franchise

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prism

Senior member
Oct 23, 2004
995
0
0
Originally posted by: Duddy
Originally posted by: magomago
They have one in a new mall complex they made. I don't see the difference between EB and it or Gamestop. Its all the same thing anyways with just a different name. So as long as prices are good that is all you need. Oh - and workers who understand that they will be asked about everything. Whether it is a gamer looking to talk about games, or a parent (this happened to me today while I was waiting) who needed 10 minutes to explain that while the Wii IS wireless you still need the "sensor bar" which is wired, or kiddies who are playing to play as much as they can for free, etc. etc.

Some differences are:

- PnT let's you try ANY game before you buy it. As much as you like.

- PnT accepts trade-in's from retro systems all the way back to NES. Gamestop/EB will not accept anything older than PS2 games.

- PnT offers console and game repair in store

- PnT values itself as part of the community and aims to treat each customers like they are your friends.

- PnT has gaming tournaments each month for prizes (consoles, games, money etc..)

- Their layout is much cleaner and that makes it easier to find things.

That sounds like something ripped straight from a company's PR release...

Good luck with it though, just make sure your area has the demand for such a store.

 

gsethi

Diamond Member
Feb 28, 2002
3,457
5
81
Dont forget that you will be signing a COMMERCIAL lease for atleast ~3-5 years. If the business fails, you are still LIABLE for rent even if you vacate the premises. Landlord will come after you personally (they will make you sign a personal guarantee, so even if you operate as a corporation, you cannot escape paying the rent for the full lease term). Only recourse will be to negotiate with landlord (they will normally accept 1yr lumpsum rent amount and let you off the lease) or sell/give the premises lease to someone (who is willing to take the risk) or declare BK.

<< owns 2 franchises but I still stay away from opening new locations (even of similar franchises).

<< was/am getting Play n Trade Development territory but not even looking at it. Game stores such as Gamestop, Play n Trade need to be in "A" location (malls, downtown with lots of young traffic such as theatre/cinema etc.). I could be wrong but I dont see them working well in a Strip mall. Theres one that recently opened in a strip mall near me....time will tell how it does.

Also, dont forget that ONLINE is taking away a LOT of retail business lately and is the future. Personally, I have only bought about ~2 computer/electronic/gaming stuff this year in-store and everything else has been online. (compare this to ~6-7 years ago when most of my purchases were retail and very few online).

McDonalds is a completely different industry. Food is something that one has to eat everyday to survive and cant be ordered online (except frozen etc.) Same with Grocery stores. In Food industry, customer COMES to you himself, you just have to maintain your service levels and quality (plus McDonalds already has an established brand name)

In this business, you will HAVE to MAKE the customer walk into your store first and then hope he purchases. On top of that, almost no brand name recognization. I do have some basic numbers of the play n trade stores in my area and numbers dont look good so far
 

Duddy

Diamond Member
Jul 22, 2002
4,675
9
81
Originally posted by: gsethi
Dont forget that you will be signing a COMMERCIAL lease for atleast ~3-5 years. If the business fails, you are still LIABLE for rent even if you vacate the premises. Landlord will come after you personally (they will make you sign a personal guarantee, so even if you operate as a corporation, you cannot escape paying the rent for the full lease term). Only recourse will be to negotiate with landlord (they will normally accept 1yr lumpsum rent amount and let you off the lease) or sell/give the premises lease to someone (who is willing to take the risk) or declare BK.

<< owns 2 franchises but I still stay away from opening new locations (even of similar franchises).

<< was/am getting Play n Trade Development territory but not even looking at it. Game stores such as Gamestop, Play n Trade need to be in "A" location (malls, downtown with lots of young traffic such as theatre/cinema etc.). I could be wrong but I dont see them working well in a Strip mall. Theres one that recently opened in a strip mall near me....time will tell how it does.

Also, dont forget that ONLINE is taking away a LOT of retail business lately and is the future. Personally, I have only bought about ~2 computer/electronic/gaming stuff this year in-store and everything else has been online. (compare this to ~6-7 years ago when most of my purchases were retail and very few online).

McDonalds is a completely different industry. Food is something that one has to eat everyday to survive and cant be ordered online (except frozen etc.) Same with Grocery stores. In Food industry, customer COMES to you himself, you just have to maintain your service levels and quality (plus McDonalds already has an established brand name)

In this business, you will HAVE to MAKE the customer walk into your store first and then hope he purchases. On top of that, almost no brand name recognization. I do have some basic numbers of the play n trade stores in my area and numbers dont look good so far

Thank you for the very informative (and scary as hell) post. :p

Seriously, that's alot of good information. But I think it will work in my town and I'm going to do ALOT more research into it. We have a large population, but not enough businesses.

Especially here in this town, ask any person under 28 what they do when they are bored. They will ALWAYS say they will go to Wal-Mart to walk around. Because that all there is to do.

I have requested a UFOC from the area developer and will be mystery shopping the two stores open in Houston Sunday. I will also talk to the owner/operators to get their opinions about how well the business works for them.
 

Duddy

Diamond Member
Jul 22, 2002
4,675
9
81
Also, I hate the topic rating. And I think everyone else does, so why is it on our boards taking up eye space.

It's obvious that people are mistreating the rating system.
 

LikeLinus

Lifer
Jul 25, 2001
11,518
670
126
Originally posted by: gsethi

<< was/am getting Play n Trade Development territory but not even looking at it. Game stores such as Gamestop, Play n Trade need to be in "A" location (malls, downtown with lots of young traffic such as theatre/cinema etc.). I could be wrong but I dont see them working well in a Strip mall. Theres one that recently opened in a strip mall near me....time will tell how it does.

I can't say I agree with the "strip mall" comment. Both Gamestops here are located in a strip mall along with a Target as the anchor store. They've been there for 10+ years and going strong. There's also one located in the mall, but that hasn't hurt any of the strip mall stores.

Best bet is to find a strip mall that has a large anchor store (i.e. Walmart/Target). That way you get shoppers from those stores also. How often does a kid see a store and beg mommy to go? :)
 

Duddy

Diamond Member
Jul 22, 2002
4,675
9
81
The location I'm eyeing is right next to, and facing, a Super Wal-Mart. Which is this towns central hub.

The Wal-Mart is new and has a McDonald's in it. So it's a constant huge crowd. Also, several stores plan on opening in the strip mall once it's open, including a King Buffet, which will draw ALOT of business. This town does not get many new places to eat, so when a new restaraunt opens, they will stay busy for months, until people get tired of it.
 

Ns1

No Lifer
Jun 17, 2001
55,413
1,570
126
I gotta say, I spent 5 minutes at the site, and it looks like a goddamn MLM page.

It has practically NOTHING about what's actually AT the store, but tons of references to starting a franchise and whatnot.

is there a different link for say, an end user to go to to find out information about the store?
 

Slew Foot

Lifer
Sep 22, 2005
12,381
96
86
I think B&M video game stores are asking for trouble. Between competition from Walmart, and online places where you can get cheaper deals, why would anyone (who's not an idiot) buy from a random video game store? The only people I see buying stuff from Gamestop stores are mom and dad who have no clue what theyre doing. Most video game fans will order online for cheap, or ebay a month after release for really cheap(and then sell the game back when their done, total cost about $4 for an unlimited rental). Unless you hold some massive Halo launch party type thing every week, you better hope your town has a bunch of people with more money than sense.


 

Duddy

Diamond Member
Jul 22, 2002
4,675
9
81
Originally posted by: Ns1
I gotta say, I spent 5 minutes at the site, and it looks like a goddamn MLM page.

It has practically NOTHING about what's actually AT the store, but tons of references to starting a franchise and whatnot.

is there a different link for say, an end user to go to to find out information about the store?

I thought that too, I eventually just called the 1-800 number. I asked the area developer what was up with the site and how come it's not consumer oriented.

He said PnT hasn't and will never open an online store front, that way sales stay in the stores. But each store has it's own website that is run by the owner.

Example: www.playntrade.com/baycity or www.playintrade.com/bcpnt

That's how they are set up.
 

Duddy

Diamond Member
Jul 22, 2002
4,675
9
81
Originally posted by: Slew Foot
I think B&M video game stores are asking for trouble. Between competition from Walmart, and online places where you can get cheaper deals, why would anyone (who's not an idiot) buy from a random video game store? The only people I see buying stuff from Gamestop stores are mom and dad who have no clue what theyre doing. Most video game fans will order online for cheap, or ebay a month after release for really cheap(and then sell the game back when their done, total cost about $4 for an unlimited rental). Unless you hold some massive Halo launch party type thing every week, you better hope your town has a bunch of people with more money than sense.

That's true, but can you try any game you want to buy online? Also, can you trade in games for other games.

You have to remember that we (online community) are still a minority in this nation and that most people do not know where to start buying/selling online. Also, if your 15 years old, your screwed. Most, if not all, require credit cards to purchase. Not everyone has a credit card.
 

Ns1

No Lifer
Jun 17, 2001
55,413
1,570
126
Originally posted by: Duddy
Originally posted by: Ns1
I gotta say, I spent 5 minutes at the site, and it looks like a goddamn MLM page.

It has practically NOTHING about what's actually AT the store, but tons of references to starting a franchise and whatnot.

is there a different link for say, an end user to go to to find out information about the store?

I thought that too, I eventually just called the 1-800 number. I asked the area developer what was up with the site and how come it's not consumer oriented.

He said PnT hasn't and will never open an online store front, that way sales stay in the stores. But each store has it's own website that is run by the owner.

Example: www.playntrade.com/baycity or www.playintrade.com/bcpnt

That's how they are set up.

I wasn't referring to sales, just info. Seriously, for a franchising operation you'd think they can spend some franchise fee's on decent webpage.

That's true, but can you try any game you want to buy online? Also, can you trade in games for other games.

You have to remember that we (online community) are still a minority in this nation and that most people do not know where to start buying/selling online. Also, if your 15 years old, your screwed. Most, if not all, require credit cards to purchase. Not everyone has a credit card.

Have you considered people coming in, playing the game, and then going to eBay or Amazon to buy it for cheaper? Also, what exactly ARE you going to do with the trade-in's?

You're just going to end up with the GS/EB problem:
- What, you won't take my madden 06? you liars
- What, only $5 for madden 06? STOP SCREWING ME YOU FUCKERS
- w00t, I got $15 for madden 06. But what are YOU going to do with it now?


 

alkemyst

No Lifer
Feb 13, 2001
83,967
19
81
Originally posted by: Duddy
Originally posted by: AgaBoogaBoo
Is this your first franchise?

Yeah, but I'm experienced. My dad owns two McDonald's here and I have learned everything from him.

Free business school FTW.

Since your dad is so great, why'd you have to raise your little sister..or is this just something you THOUGHT you did.
 

Duddy

Diamond Member
Jul 22, 2002
4,675
9
81
Originally posted by: Ns1
Originally posted by: Duddy
Originally posted by: Ns1
I gotta say, I spent 5 minutes at the site, and it looks like a goddamn MLM page.

It has practically NOTHING about what's actually AT the store, but tons of references to starting a franchise and whatnot.

is there a different link for say, an end user to go to to find out information about the store?

I thought that too, I eventually just called the 1-800 number. I asked the area developer what was up with the site and how come it's not consumer oriented.

He said PnT hasn't and will never open an online store front, that way sales stay in the stores. But each store has it's own website that is run by the owner.

Example: www.playntrade.com/baycity or www.playintrade.com/bcpnt

That's how they are set up.

I wasn't referring to sales, just info. Seriously, for a franchising operation you'd think they can spend some franchise fee's on decent webpage.

That's true, but can you try any game you want to buy online? Also, can you trade in games for other games.

You have to remember that we (online community) are still a minority in this nation and that most people do not know where to start buying/selling online. Also, if your 15 years old, your screwed. Most, if not all, require credit cards to purchase. Not everyone has a credit card.

Have you considered people coming in, playing the game, and then going to eBay or Amazon to buy it for cheaper? Also, what exactly ARE you going to do with the trade-in's?

You're just going to end up with the GS/EB problem:
- What, you won't take my madden 06? you liars
- What, only $5 for madden 06? STOP SCREWING ME YOU FUCKERS
- w00t, I got $15 for madden 06. But what are YOU going to do with it now?

I wasn't ware of that problem until yesterday. I have been cold calling random PnT's across the nation and yesterday one owner said to stay away from taking sports games, because all they will do is sit on the shelf.

Also, I'm not sure where you live. But folks around here don't even know what Amazon is. It's a very country/mexican area.

Trust me, I work in retail now selling phones for AT&T, and I know for a FACT that nobody here knows how to use a computer, let alone find retailers online and purchase items with the credit cards they don't have.

 

Duddy

Diamond Member
Jul 22, 2002
4,675
9
81
Originally posted by: alkemyst
Originally posted by: Duddy
Originally posted by: AgaBoogaBoo
Is this your first franchise?

Yeah, but I'm experienced. My dad owns two McDonald's here and I have learned everything from him.

Free business school FTW.

Since your dad is so great, why'd you have to raise your little sister..or is this just something you THOUGHT you did.

It's called a divorce, and my mother's custody rights. Appearantly he wasn't THAT great at the time.
 

pyonir

Lifer
Dec 18, 2001
40,856
311
126
Originally posted by: LikeLinus
Originally posted by: gsethi

<< was/am getting Play n Trade Development territory but not even looking at it. Game stores such as Gamestop, Play n Trade need to be in "A" location (malls, downtown with lots of young traffic such as theatre/cinema etc.). I could be wrong but I dont see them working well in a Strip mall. Theres one that recently opened in a strip mall near me....time will tell how it does.

I can't say I agree with the "strip mall" comment. Both Gamestops here are located in a strip mall along with a Target as the anchor store. They've been there for 10+ years and going strong. There's also one located in the mall, but that hasn't hurt any of the strip mall stores.

I agree. I know of three Gamestops in the immediate area and at least 3 when i still lived in Phoenix, and all of them were in strip malls.

Good luck to ya Duddy...hope it all works out for ya. I've never heard of the place, FYI.
 

JS80

Lifer
Oct 24, 2005
26,271
7
81
Looks like a great opportunity. I'm curious though who the supplier is and if you'll be able to get the latest games and systems. I can guarantee you that gamestop, walmart, etc will get first dibs.
 

TwiceOver

Lifer
Dec 20, 2002
13,544
44
91
Originally posted by: JS80
Looks like a great opportunity. I'm curious though who the supplier is and if you'll be able to get the latest games and systems. I can guarantee you that gamestop, walmart, etc will get first dibs.

A friend of mine started a local used shop. His cheap ass distributor allows him all new releases and he is able to undercut the pricing of all of those companies.



 

QueBert

Lifer
Jan 6, 2002
22,378
706
126
the pics make the store at least look nice, Gamestop, ugh... I can NEVER FIND SHIT THERE! They always have the games jumbled up, and if that's not bad enough, the one I want is typically only a used copy, which is a whole freaking 2-3 dollar cheaper and probably missing the manual. I don't think we have PNT's out here in Southern Cali, but it at least looks upscale from the photos you posted. The advice about sports games is spot on, go to any Gamestop and they'll have like a million copies of any version of NBA Live or Madden. And nobody is gonna buy Madden 03 in 07 :)

I like the idea about being able to try any game, I could see teen's abusing this. I know if I was 13 and had a PNT near me I'd be playing about 10 hours a day until I was told "don't come back kid" hehe.

 

alkemyst

No Lifer
Feb 13, 2001
83,967
19
81
I am thinking their business model is to appeal to those buying the franchise, not really reality of a gaming customer.

For one if you accept all trades, your game prices are going to have to support that. Same thing with having a tech on staff. I just don't hear of too many people needing to repair their console. It's usually a controller dies and they just replace it or the pet ate there cords.

If all the kids are hanging out around town anyway, not to many are gamers to begin with.

 

IronWing

No Lifer
Jul 20, 2001
68,847
26,624
136
They were involved in murdering those Hollywood celebrities.






Edit: Oh, wait, that was the Manson Family. nm.
 

AgaBoogaBoo

Lifer
Feb 16, 2003
26,107
4
81
Duddy, I've been putting off a reply because I just made my 25k post in another thread, but I'm really confused on your approach. In the end, one of the hats you have to wear as a business owner is the hat of an investor.

What kind of return is this investment going to get you? Better yet, what are your other choices? Rather than getting thoughts on this one franchise opportunity, show us a list of 5 franchises, and ask us to pick which one we support the most.

I'm weary of this franchise just from the start - their main page has many links with information on franchising... something just isn't right about that. It's like they're advertising the franchising rather than letting it grow organically and by people being interested rather than being drawn in through sales approaches.

You need to put a high level plan together for the sum of money you plan to start this with. If you've got X dollars, figure out what kind of returns you want on it, and when you want it by.

Also, grab some books on franchising, and read all about it. McDondald's is a great example because each and every location is based on a system, and that system is held with a lot of respect. The attention to detail of the system is amazing, and that's why every location does maybe $2 million in revenue yearly? Anyway, I don't get a good feeling from what they have on their site. The first page on franchising shows that you only pay a 4% royalty compared to the higher industry standard fees with other franchises... that's a big siren in my head, because with 1/2 or 1/3 the less royalty per location, they must be limiting exactly what they'll be doing with the money.

Anyway, I don't want to sound insulting, but spend some time from the start, and grab any book on entrepreneurship so you can get an idea of the other things involved in this, like the investment aspect. The only reason you would open a business is to see your investment get a higher return than what it's doing right now.
 

sjwaste

Diamond Member
Aug 2, 2000
8,760
12
81
A lot of good stuff here. Let me just add that you should write a business plan and force yourself to analyze exactly how you plan to be profitable. Shop it to banks to see if you can get a loan, good way to have someone else evaluate if its a good plan or not.