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FDD Talk 2015: The Once Upon A Child Franchise Opportunity (Financial Performance Analysis, Estimated Costs, and Other Important Stuff You Need to Know)

by Franchise Chatter on November 16, 2015

in FDD Talk 2017: Children's Franchises, FDD Talk 2017: Retail Franchises, Franchise Earnings, Resale Franchise, Retail Franchise

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Once Upon a Child Franchise Photo by GrowingKidsMinistry

In this FDD Talk 2015 post, you’ll learn the following:

  • Section I – Background information on the Once Upon A Child franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Once Upon A Child franchise, based on Item 7 of the company’s 2015 FDD
  • Section III – Presentation and analysis of Once Upon A Child’s financial performance representations, based on Item 19 of the company’s 2015 FDD, including information on the:
  • 2014 average, high, and low gross sales and average gross profit for franchised Once Upon A Child stores that opened in 2013, 2012, 2011, 2010, 2009, and 2008 and prior, respectively, and had been in operation for the 12-month period ended December 27, 2014
  • 2014 average gross sales for the first, second, third, and fourth quartiles of franchised Once Upon A Child stores that had been in operation for the 12-month period ended December 27, 2014

Section I – Background Information

Once Upon A Child is a used children’s clothing retail chain serving families with children aged 12 and younger, all the way down to infancy. As such, the primary target market includes mothers from 25-44 years of age as well as all those grandmothers who love buying clothes for their grandchildren.

Founded in 1984 in Columbus, OH, the company began its franchising operation in 1992. There are currently 316 locations in the U.S. and Canada, and the chain has been opening around 20 new locations every year since 2012.

The chain is owned and backed by Winmark Corporation (formerly Grow Biz), a company that has become a leader in reselling high-quality used items. In addition to Once Upon A Child, Winmark operates a number of other used-item retail franchises, including Play It Again Sports, Plato’s Closet, Music Go Round, and Style Encore.

Here’s how Once Upon A Child helps families keep their kids looking smart in the used children’s clothing segment:

More Than a Thrift Store

You might think Once Upon A Child is a “thrift shop” because it sells used items, but that’s not the case. The differentiating feature is that it focuses on well-known brands and quality. And it’s not just a clothing shop either. You’ll find plenty of baby gear, shoes, costumes, dancewear, outerwear, accessories, even toys and furniture.

Making Waves in Resale-Retail

Once Upon A Child is also not a consignment shop. Each location pays cash for used clothing and baby gear on the spot, which means you don’t have to wait around wondering if your items will sell. If you take good care of your baby gear and children’s clothing, you can continuously sell your gently used items to Once Upon A Child and use the cash you get to buy the next round.

Also unlike many consignment shops, Once Upon A Child purchases items for all seasons all year-round, and no appointment is needed.

Safety First

When it comes to baby gear, everybody wants the very best for their infants, but doesn’t necessarily want to pay exorbitant prices for it. Once Upon A Child has a strong commitment to safety. Everything in their stores is guaranteed to be of good quality, meets all current safety standards, and has not been subject to any product recalls.

As Easy as A, B, C…D

The way Once Upon A Child works is a simple four-step process: A) People bring their gently-used children’s clothing and baby gear to a Once Upon A Child location; B) While they look around the store, the location reviews what has been brought in; C) The buyer makes an offer based on the items’ condition and the store’s inventory needs; D) If the seller accepts, they get cash on the spot they can walk away or shop with. Easy!

A Business Model That Makes Sense

Once Upon A Child is the largest chain of its kind (kids resale) in North America. It outnumbers its closest competitor by more than three-to-one. Many franchisees are former customers. It works for them in part because it’s a largely recession-proof business.

Section II – Estimated Costs

  • Please click here for detailed estimates of Once Upon A Child franchise costs, based on Item 7 of the company’s 2015 FDD.

Section III – Financial Performance Representations (Item 19, 2015 FDD) and Analysis

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