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Earnings Claims of Top Franchises Revealed

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Franchise Costs: Detailed Estimates of Style Encore Franchise Costs (2017 FDD)

by Franchise Chatter on March 29, 2014

in Franchise Costs, Resale Franchise



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Style Encore Interior

This post was updated on April 3, 2017 to reflect information from Style Encore’s 2017 FDD (Item 7).

Detailed Estimates of Style Encore Franchise Costs Based on Item 7 (Estimated Initial Investment) of Style Encore’s 2017 Franchise Disclosure Document

  • The typical size of a Style Encore Store ranges from 3,000 to 4,000 square feet. For several items discussed below, your cost will increase as the number of square feet increases.

1.  Initial Franchise Fee:  $25,000

  • The Initial Franchise Fee for new Style Encore franchisees is $25,000. The Initial Franchise Fee is $15,000 for a second or subsequent Store, or for an existing franchisee of one of Winmark’s other franchised concepts.

2.  Fixtures and Supplies:  $40,000 to $60,000

  • Your investment in fixtures and supplies necessary to operate the Store is highly variable. The cost will increase as the number of square feet increases.
  • Winmark, through its subsidiary, Wirth Business Credit, Inc., may purchase the fixtures and supplies and lease them to you. If leasing through Wirth Business Credit, Inc., you will be making monthly payments over time (typically 36 months).

3.  Signs:  $5,000 to $11,500

  • This item is for interior and exterior signs for the Store. You must purchase all interior and exterior signs through Winmark’s approved, preferred third-party suppliers.
  • Winmark, through its subsidiary, Wirth Business Credit, Inc., may purchase the signs and lease them to you. If leasing through Wirth Business Credit, Inc., you will be making monthly payments over time (typically 36 months).

4.  Security Cameras:  $1,200 to $5,500

  • You must purchase security cameras for your Store. Winmark recommends that you purchase a minimum of 4 to 5 cameras depending on the size of your Store.
  • Winmark, through its subsidiary, Wirth Business Credit, Inc., may purchase the security cameras and lease them to you. If leasing through Wirth Business Credit, Inc., you will be making monthly payments over time (typically 36 months).

5.  Point-of-Sale (POS) System:  $22,100 to $27,500

  • You must use in your Store the POS System which Winmark has selected for the Business System. You must obtain a license for the Proprietary Software from Winmark.
  • The estimated amount includes the $6,000 software license fee that you pay Winmark for the Proprietary Software. It also includes the $1,000 DRS Maintenance Fee. It does not include sales tax and shipping costs.
  • You must obtain the computer hardware components through Winmark. Winmark, through its subsidiary, Wirth Business Credit, Inc., may lease you the POS System. If leasing through Wirth Business Credit, Inc., you will be making monthly payments over time (typically 36 months).

6.  Leasehold Improvements:  $10,500 to $25,000

  • You will need to lease the premises for your Store. Typical locations for your Store are strip shopping malls and smaller free-standing locations.
  • The estimated cost of leasehold improvements could include:  carpeting, slat wall, lighting, and decor.

7.  Build-Out:  $21,500 to $50,000

  • The build-out cost refers to the physical labor expense of building the store location to Winmark’s approved brand standards. This may include installation of slat wall, wall standards, counter configuration, building store fixturization, installing flooring, painting, etc.

8.  Deposits and Business Licenses:  $3,000 to $12,000

  • This amount includes utility and security deposits and business licenses. Deposits are generally refundable, but license fees are not.

9.  Opening Inventory:  $55,000 to $75,000

  • This amount assumes that substantially all of your opening inventory will be used women’s clothing, with a mix of used and new accessories. Winmark strongly recommends that you have minimum inventory levels between $13.75 and $18.33 per square foot of retail selling space when you open your Store and encourages you to have a much larger amount of inventory.
  • This amount does not reflect amounts needed to replenish inventory during the initial stage of operation.
  • Winmark may refuse to allow you to open your Store if you have less than $55,000 in used inventory.

10.  Miscellaneous Pre-Opening Expenses:  $33,750 to $50,500

  • This amount includes lodging, meals, and travel expenses for 2 persons attending the initial training program and the cost of participation in an online financial management course (currently $395) during the initial training program; telephone, fax, and high speed internet hook-up; legal expenses; initial financing costs; building permits; pre-opening labor expenses; pre-opening advertising expenses; and website development.

11.  Additional Funds – 3 Months:  $40,000 to $50,000

  • This amount estimates the expenses you will incur during the first 3 months of Store operations, including initial wages and fringe benefits, insurance premiums, rent, advertising, taxes, office, paper and cleaning supplies, and interest payments on any business loans.
  • It does not include inventory costs beyond the opening inventory costs identified in the table and does not include your compensation during this 3-month period.
  • Rent is estimated to be approximately $40,000 to $90,000 per year depending on factors such as size, condition, and location of the premises. At times, franchisees are able to negotiate 2-4 months free rent with the landlord upon commencement of the lease.
  • The amounts are estimates and the franchisor cannot guarantee that you will not incur additional expenses in starting the business.

12.  Total:  $257,050 to $392,000

  • Winmark bases this total on prevailing market conditions and Winmark’s 28 years of general experience in the franchise retail business and its 24 years experience franchising retail stores which deal primarily in the purchase and sale of used clothing.



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