Once Upon a Child Franchise in 2024: Costs, Fee & FDD
Looking to invest in a proven resale franchise? Discover why Once Upon a Child might be your perfect opportunity. Learn more about costs, profits, and what sets it apart!
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Once Upon a Child is a unique resale franchise that has carved out a niche in the children’s retail industry. Founded by Lynn Blum in 1984, this brand is part of Winmark Corporation, which specializes in resale franchises. Blum’s vision was to create a store where parents could buy and sell gently used children’s items, providing a budget-friendly option for families while promoting sustainability. Over the years, it’s grown into a recognized leader in the resale space, helping families save money and reduce waste.
The franchise’s core offering is the resale of gently used children’s clothing, toys, furniture, and baby gear. It operates in the buy-sell-trade model, where customers bring in items, receive payment on the spot, and other customers purchase those pre-loved items at affordable prices. The target market includes parents and families looking to save money on essentials while shopping sustainably. This model resonates well with budget-conscious families, eco-friendly consumers, and new parents looking to stretch their dollars.
Currently, Once Upon a Child boasts over 400 locations across the U.S. and Canada, making it a dominant player in the children’s resale industry. Its wide-reaching presence and the fact that parents are constantly seeking high-quality, low-cost children’s items mean the daily customer base is substantial. With a proven model, Once Upon a Child has thrived in diverse communities, from suburban areas to urban centers.
Franchisees benefit from Winmark Corporation’s extensive support system, which includes a comprehensive training program covering everything from inventory management to marketing strategies. New franchisees receive in-person and virtual training sessions to ensure a smooth start. Plus, the ongoing support in areas like advertising, technology, and operations ensures franchisees are never alone in their journey. It’s a well-oiled machine, perfect for entrepreneurs who want to dive into the retail resale market with confidence.
Once Upon a Child Franchise Insights
- Founded in 1988, Once Upon a Child has been a trusted name in the children’s resale industry for over 35 years.
- The franchise is part of the Winmark Corporation, which boasts over 1,250 resale-focused franchise locations, making it a leader in the secondhand retail industry.
- The franchise has grown to 359 franchised units in the U.S.
- There is a 5% royalty fee, but there’s no marketing fee listed, which may reduce operational costs compared to other franchises.
Once Upon a Child Franchise Key indicators
Growth YOY (%)
2%
vs industry 0%
Total U.S. Franchised Units
359
3-Year Failure Rate
2%
vs industry 13%
Sales-to-Investment ratio
3.2:1
How much does it cost to open a Once Upon a Child franchise?
Understanding the potential investment size and capital requirements is crucial when considering opening a Once Upon a Child franchise. These financial commitments, including initial franchise fees, equipment costs, and ongoing operational expenses, impact the feasibility and profitability of the venture. Thoroughly evaluating these factors ensures that potential franchisees are prepared for the financial responsibilities and can make informed decisions about their ability to sustain and grow the business, ultimately contributing to long-term success.
Min & Max Investment
Opening a Once Upon a Child franchise involves several key costs, which are outlined in Item 7 of the Franchise Disclosure Document (FDD). You can see a breakdown of the costs to open a Once Upon a Child below from the most recent Item 7 below:
| Type of Expenditure | Minimum Investment | Maximum Investment |
|---|---|---|
| Initial Franchise Fee | $25,000 | $25,000 |
| Fixtures and Supplies | $45,000 | $57,000 |
| Signs | $8,000 | $12,000 |
| Security System and/or Cameras | $1,500 | $4,500 |
| Point-of-Sale (POS) System | $22,300 | $29,300 |
| Leasehold Improvements | $11,000 | $21,000 |
| Build-out | $25,000 | $50,000 |
| Deposits and Business Licenses | $5,000 | $15,000 |
| Opening Inventory | $65,000 | $80,000 |
| Miscellaneous Pre-Opening Expenses | $35,000 | $70,000 |
| Rent – First 3 Months | $15,000 | $24,000 |
| Additional Funds – 3 Months | $30,000 | $33,000 |
| Total | $287,800 | $420,800 |
Item 7 in the Franchise Disclosure Document (FDD) is the “Estimated Initial Investment” section. It outlines the total costs a franchisee can expect to incur when starting a franchise, including the initial franchise fee, equipment, inventory, real estate, and other startup expenses. This section is crucial because it provides potential franchisees with a detailed understanding of the financial commitment required, helping them assess affordability and plan their investment strategy effectively.
Required Capital
To open a Once Upon a Child franchise, the required capital involves both the initial investment costs and a net worth requirement set by Once Upon a Child. Let’s take a closer look below:
- Initial Investment As shown above, the total estimated initial investment ranges from $287,800 to $420,800. This includes all the startup costs such as the franchise fee, real estate, construction, equipment, initial inventory, and additional funds for initial operating expenses. Assuming that you will finance your franchise investment, you should plan to have 20% of the total investment amount in the form of equity (cash) for the investment.
- Liquid assets Franchisees often need to show liquid assets in the range of $100,000 to $150,000. This helps ensure the franchisee can support the business during its initial months of operation without financial strain.
- Net worth A typical required net worth for a franchise like this would be around $400,000 to $600,000. This ensures the franchisee has enough financial backing to run the business successfully and meet potential cash flow needs.
How much does a Once Upon a Child franchise owner make?
Calculating the salary of a Once Upon a Child franchise owner involves analyzing gross sales to determine total revenue, assessing operational efficiency to understand profit margins, and accounting for franchisor fees and additional expenses such as rent, utilities, and payroll. Effective management of these factors can significantly impact the profitability and financial success of a Once Upon a Child franchise owner. This comprehensive financial analysis helps estimate net profits, from which the owner’s salary can be derived. A clear understanding of these factors ensures accurate salary projections and financial planning for sustainable business operations.
Once Upon a Child Revenue & Gross Sales
Based on most recent analysis, Once Upon a Child franchises have a median gross sales of $1,143,729. This strong financial performance underscores the brand’s robust consumer demand and potential for significant revenue generation.
Which key factors impact the average revenue performance of Once Upon a Child franchisees?
Several factors likely contributed to the performance of U.S. franchisee median gross sales for Once Upon a Child in recent years. One major factor could be the growing demand for budget-friendly shopping options due to economic pressures like inflation, driving families to seek out resale stores for children’s clothing and essentials. Additionally, increased consumer awareness of sustainability and secondhand shopping has likely boosted foot traffic. Post-pandemic recovery might have also played a role, with families more comfortable returning to in-store shopping. Marketing strategies, local promotions, and operational efficiencies from franchisee training could further enhance overall sales performance.
Once Upon a Child Franchise Operational Costs
When opening a Once Upon a Child franchise, key ongoing operational costs to consider include:
- Inventory restocking As a resale business, continuously purchasing gently used children’s items from customers is crucial. The cost will fluctuate based on store size and customer volume.
- Employee wages Staffing is essential for day-to-day operations, including customer service, inventory management, and store upkeep. The number of employees and local minimum wage laws will influence this cost.
- Rent and utilities Depending on the location and size of your store (typically 3,500-4,000 square feet), rent and utility costs such as electricity, water, and internet will be ongoing expenses.
- Point of Sale (POS) systems and software Managing inventory, sales, and customer data will require robust software, which usually involves monthly subscription fees.
- Store maintenance and supplies Regular upkeep of the store, including cleaning supplies, fixtures, and minor repairs, is also an important ongoing cost.
Once Upon a Child Franchise Fees
When considering the ongoing costs of operating a Once Upon a Child franchise, it’s important to factor in several key fees that are part of the franchise agreement. These fees help support the overall operation, marketing, and brand consistency across all franchise locations. Here are the most relevant ongoing fees:
- Continuing Fee Franchisees are required to pay 5% of gross sales on a weekly basis, due on or before Wednesday for the previous week’s sales.
- Marketing Fee A fixed $1,500 per year, due by January 1 of each year, ensures the franchise benefits from national or regional marketing initiatives.
- Cooperative Advertising Franchisees may be required to contribute up to 5% of gross sales to a cooperative advertising fund, as determined by Winmark or other franchisees.
In addition to these, there may be other potential fees related to training, technology, or local promotions, so it’s important to review the Franchise Disclosure Document (FDD) carefully for a full understanding.
Once Upon a Child Franchise Earnings
Based on the most recent data, the median gross sales for a Once Upon a Child franchise are approximately $1,143,729. For an owner-operator, earnings are estimated to be roughly $171,559 based on industry margins. These figures reflect the earnings potential of running a successful store within the brand’s well-established model, where operational efficiency, strong customer demand, and inventory management play crucial roles in driving profitability.
Franchisees who closely manage daily operations and maintain strong inventory turnover, along with cost-effective store management, can expect similar earnings. The franchise model has proven to offer consistent returns, making it an attractive opportunity for those looking to enter the children’s resale market while leveraging a recognized brand and comprehensive support system.
How to Open a Once Upon a Child Franchise
The process of becoming a Once Upon a Child franchisee involves several important steps, starting with your initial inquiry and ending with the launch of your store. Here’s a general overview of the steps involved:
- Initial Inquiry You or your franchise specialist submits an initial inquiry basic information about your interest and background. You should also conduct thorough research on the franchise, including seeing all of the information available on the Vetted Biz franchise intelligence platform, including access to the most recent Franchise Disclosure Document (FDD).
- Franchise Application Once your inquiry is reviewed, you will be asked to submit a formal application. This helps the franchisor evaluate whether you’re a good fit based on your experience, financial standing, and business goals.
- Discovery Day You’ll be invited to a Discovery Day at the company’s headquarters or a regional location. This gives you a chance to meet the franchisor, tour existing stores, and get a deeper understanding of the business model.
- Signing the Franchise Agreement Once you’ve completed your due diligence, you’ll sign the franchise agreement and pay the initial franchise fee. This formalizes your partnership with the brand.
- Site Selection and Lease Negotiation The franchisor will assist you in finding the best location for your store. This process involves demographic research and lease negotiations to ensure a prime retail space.
- Training Program You’ll undergo an extensive training program covering everything from operations to marketing, inventory management, and customer service. The training includes both in-person and online sessions.
- Store Build-Out and Grand Opening With the location secured, you’ll begin the process of building out the store, stocking inventory, and preparing for the grand opening. The franchisor will provide guidance during this phase to ensure a smooth launch.
- Start of Operations Once the build-out is complete and your staff is trained, you’re ready to open your doors to the public and begin operating your Once Upon a Child franchise.
Pros & Cons
Pros
Proven Business Model: With over 35 years of experience and 400+ locations, the franchise has a solid track record of success in the children’s resale market.
Low Inventory Costs: The buy-sell-trade model allows franchisees to acquire inventory from customers, reducing the need for high upfront purchasing costs.
Sustainability Appeal: The focus on secondhand goods resonates with eco-conscious consumers, which is a growing market segment.
High Demand for Products: Families are constantly looking for affordable children’s items, and the resale market continues to thrive even during economic downturns.
Cons
Fluctuating Inventory Supply: Since inventory is sourced from local customers, availability and quality may vary, making consistency a challenge in some locations.
Labor-Intensive: Managing a large volume of used products requires significant time and attention to detail, from evaluating items to stocking and organizing inventory.
Location-Dependent Success: Store success can vary depending on the local market, demographics, and competition, which requires careful site selection and local marketing strategies.
