Questions You Might be Asking
Why open a HobbyTown franchise instead of an independent hobby store?
A: The unique selling proposition of any established franchise is the successful system that’s been developed and refined over years of experience. Opening a new business is a complex project and an experienced partner can save you thousands of dollars by avoiding costly site selection, leasing and inventory selection errors. Once the store is open, managing daily operations and navigating the hobby and toy industries are the next challenges for any new storeowner. We pride ourselves on providing ongoing value that exceeds the initial investment and royalties by providing tools, support and proven processes to set you up for success.
Q: What kind of products do you sell?
A: Visit our website at www.HobbyTown.com for a representation of the many products and lines stocked in most franchise stores.
Q: Do I need to actively manage the business?
A: The HobbyTown business model achieves the best results with owner/operators who are actively engaged in the daily business operations. While it is possible for a qualified manager to operate your store profitably, there is no substitute for a financially motivated owner/operator who manages their store.
Q: What are the financing requirements and do you offer financial assistance?
A: Most lenders will require a minimum net worth of $250,000 and a cash investment by the franchisee of 33% of the total investment ($75,000–$110,000). We do not offer financing, but we can assist you in securing a loan through the SBA or leveraging your 401(k) as a rollover for business startup through FranFund.
Q: Do I need hobby experience to open a HobbyTown franchise?
A: Not necessarily, but it’s helpful to have some knowledge of our products and target customer base. The most important assets of a successful franchise operator include strong organizational skills, the ability to manage people and a drive to do whatever it takes to succeed.
Q: Is my market suitable for a HobbyTown franchise?
A: Several variables including population, demographics and local competition must be considered when assessing the viability of a market. Our best performing franchise stores operate in markets with a 200,000+ population base within 10 miles of the store location.
Q: How many hours per week should I expect to work?
A: The flexibility of our cloud-based Point of Sale (POS) and inventory management software allows our franchise operators to work from anywhere they can connect to the internet. Most operators generally report working 40–60 hours per week on their business with flexibility to staff accordingly for seasonality and personal time away from the store.
Q: Are there multi-unit ownership opportunities available?
A: Our franchise agreement does allow for multi-unit ownership. Successful multi-unit operations are an entirely different dynamic from single-unit management, and multi-unit management isn’t for everyone. We will discuss and review the pros and cons of multi-unit ownership at the appropriate time in your business planning and development.
Q: What is the site selection process?
A: After the execution of a franchise agreement, we connect you with our real estate partner that has served the HobbyTown franchise for more than 25 years. We will combine your familiarity with the local market with our insights and contacts with national real estate companies to identify several locations to consider. We analyze each site to assist you in making the best decision for your market characteristics and circumstances. Once the desired location is identified, our real estate partner will negotiate the lease and prepare a final draft for your legal review (our real estate services are included in your initial franchise fee).
Q: How much will I spend on rent?
A: Each circumstance is unique depending on local market conditions. A typical commercial lease will include base rent (quoted as a monthly or annual cost per square foot) plus “triple nets” which include property tax, Common Area Maintenance (CAM) and insurance. The combination of these expenses comprises your gross rent. We will determine a budget for rent expense based on your particular business plan and projections.
Q: How long will it take to get my store open?
A: The three major variables in the store opening timeline are financing, lease negotiation and buildout. Once the financing is in place and the lease is executed, we can work back approximately 8 weeks from an established date for site occupancy to complete the store opening process.
Q: How is the opening and ongoing merchandise selection determined for my store?
A: We utilize a combination of our experience, national Point of Sale (POS) and online sales data, and vendor relationships to curate a constantly changing mix of best-selling inventory. The personal expertise and hobby interests of each franchise owner is also a factor in determining the best mix of inventory for each store and market.
Q: Is it advisable to purchase a franchise for a friend or family member?
A: From our experience, the best franchise operators have a vested interest in the success of the store and are engaged in the daily operations. Every circumstance is unique, and we will be happy to discuss your particular situation.
Q: When is the best time to open a HobbyTown franchise store?
A: We can accommodate most opening timelines that suit your preference or meet the financing and site readiness variables in the store opening process. We prefer to avoid opening after Thanksgiving through December 31 to allow ample time to learn daily operating procedures prior to the peak selling season.
Q: What are the revenue and profit expectations for a franchise store?
A: There are many variables to consider such as the market size, demographics, size of store, inventory levels and more. Our Franchise Disclosure Document (FDD) Item 19 will disclose our financial performance representations, which is the extent that any franchisor can discuss regarding the sales and profit potential of operating a franchise business. After you qualify and receive the FDD, you will have access to contact information for our franchisees who you can contact directly to ask questions and develop your business plan.
Q: How much is the franchise fee and ongoing royalties?
A: The one-time initial fee on your first unit is $20,000 ($15,000 franchise fee + $5,000 turnkey fee), the franchise fee is $5,000 on subsequent units. Ongoing royalty is 3% of gross sales. HobbyTown proudly supports our active and honorably discharged veterans of the U.S. Armed Forces by offering a $5,000 reduction to the franchise fee on a new store in recognition of their sacrifice and service to our country.
Q: What does it cost to open a HobbyTown franchise store?
A: The initial investment is wide ranging depending on the size of store, fixture requirements and opening inventory level. Our initial investment ranges are listed in Item 7 of our Franchise Disclosure Document.
Q: Do you offer assistance in marketing and advertising for my store?
A: Yes, we have a marketing team and agency that support and serve as resources for both national and local marketing initiatives. An online marketing asset library is available as a convenient, 24/7 resource in addition to our support team that can assist with social media, graphic design, media buying and developing your local marketing plan.
Q: How is HobbyTown positioned to compete with Amazon and online retailers?
A: Our franchise owners leverage the scale, resources and national brand awareness of HobbyTown as a locally owned store operator. Our most successful franchise stores delight customers by offering competitive pricing, a wide-ranging merchandise mix, outstanding customer service and fun activities for their community and other hobby enthusiasts.