FDD Talk 2020: Once Upon A Child Franchise Review (Financial Performance Analysis, Costs, Fees, and More)

In this FDD Talk 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 2020 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Once Upon A Child franchise, based on Items 5 and 6 of the company’s 2020 FDD

• Section IV – Number of franchised and company-owned Once Upon A Child outlets at the start of the year and the end of the year for 2017, 2018, and 2019, based on Item 20 of the company’s 2020 FDD

• Section V – Presentation and analysis of Once Upon A Child’s financial performance representations, based on Item 19 of the company’s 2020 FDD, including information on the:

• 2019 average, median, high, and low gross sales and average and median gross profit for the 366 franchised Once Upon A Child stores in the United States and Canada that had been in operation by the same franchisee or owners for the 12-month period ended December 28, 2019, grouped by year opened (2018, 2017, 2016, 2015, 2014, and 2013 and prior)

• 2019 average, median, high, and low gross sales and average and median gross profit for the first, second, third, and fourth quartiles of the 366 franchised Once Upon A Child stores in the United States and Canada that had been in operation by the same franchisee or owners for the 12-month period ended December 28, 2019

• number and percentage of franchised Once Upon A Child stores in the United States and Canada that had been in operation by the same franchisee or owners for the 12-month period ended December 28, 2019, grouped by range of gross sales ($0 to $250,000; $250,001 to $500,000; $500,001 to $1,000,000; $1,000,001 to $2,000,000; $2,000,001 to $3,000,000; and greater than $3,000,000)

Section I – Background Information

19 Things You Need to Know About the Once Upon A Child Franchise

Franchisee Celebrates 20th Anniversary

1.  At the end of June 2019, The Newtown Bee news site highlighted the story of Diana Maunsell, owner and operator of Once Upon A Child in Danbury, Connecticut. Maunsell’s store recently celebrated its 20th anniversary.

2.  In 1999, Maunsell was newly married and looking to start her own business. She knew she wanted to pursue a path that would be fun and feel like an adventure each day. When she came across the Once Upon A Child resale franchise, she knew it was the right decision. Maunsell opened her Once Upon A Child next to a Walmart and has been building a dedicated community following for the past two decades.

3.  Over the last 20 years, Maunsell has seen many of her customers go from being moms with newborns to now raising young adults, and she has seen countless children grow up and benefit from Once Upon A Child. Maunsell’s love and appreciation for the store grew as she herself became a mom – now of two teenagers. She experienced firsthand the joy of enriching her children’s lives and building their nursery affordably.

4.  According to Maunsell, “We consider ourselves a resale store, not a consignment store. Our mission is for moms to be able to do this easily, quickly, but also benefit with going away with money that they can now use to buy more kids’ stuff. Customers are able to do their recycling, get their money right away, and move on with their life and not feel like they are stuck in that consignment loop.”

5.  The concept of recycling is incredibly important to her in that it allows parents to declutter their spaces to make room for new items. It is also an environmentally-friendly concept. “Everything you see in the store, if we weren’t in town, it might have ended up in a [land]fill,” Maunsell said. “Whatever anyone has, we try to find it a home and not in the trash.”

6.  While Maunsell acknowledges that taking in so many items to resell causes the store to be packed from floor to ceiling, she ensures that everything is meticulously organized. Clothing is sized and even colored-coded for the easiest shopping experience for those sifting through the wide selection.

7.  Once Upon A Child also has a wide selection of baby gear that includes everything from strollers to bouncy seats and Bumbo chairs. “The awesome thing about the baby gear and the toys is that we check everything for safety recalls to make sure there are no consumer protection recalls,” Maunsell assured. “Besides checking that [an item] is not recalled, we do our own testing, making sure every wheel is on, snap is on, and we test it with batteries to see if it works.”

8.  While many customers choose to visit the shop often to see what new items have been brought in, a new generation of moms and shoppers are turning to social media to do their browsing. Once Upon A Child has crafted a strong social media presence to stay connected with their client base that enjoys searching for items online.

9.  With new items coming in constantly, Maunsell says they post an average of six to ten times a day on Instagram to show the newest treasures. Even though the shop does not take payment for products over the phone, people can call in and request the item be held for a few hours before heading in to purchase it.

10.  The accessibility and convenience online shopping has created for retail has been beneficial, but Maunsell does encourage the public continue to “shop local and shop small.” “The internet is here, and online shopping is not going away,” she said, “but if people don’t make it a point to try to shop local, there will be less and less stores, and when you need that last minute [item], there won’t be any stores to get it.”

11.  Investing in the community is of utmost importance to the Once Upon A Child owner, which is why Maunsell has decided to celebrate the store’s anniversary year-round. “We are constantly looking for ways to connect with the community and tell our story about being around for 20 years,” Maunsell said. “We wouldn’t be able to be here for 20 years if it wasn’t for them.”

Newest Locations

12.  As one of Winmark Corporation’s biggest chains, Once Upon A Child is continuously opening new stores. Some of its newest locations opened in 2019 in Bloomington, Indiana and Longview and Abilene, Texas.

13.  Once Upon A Child Bloomington opened in mid-September and is owned and operated by Kristy Sieraski. In a statement, Sieraski said, “Our store fills a distinct niche in the retail market. I understand how expensive it is to raise children today and want to offer an affordable option for local families. By purchasing merchandise directly from consumers, we’re able to offer them lower prices and a great opportunity to receive cash on the spot for items they may have otherwise simply given away.”

14.  The Longview Once Upon A Child store was opened on August 8 by owner Kimberly Boyle. The store celebrated its grand opening throughout the weekend and had different giveaways each day. Some of the prizes included: a $200 Once Upon A Child gift card, a special colorable Once Upon A Child tote, 20% off for a year, and many other great items.

15.  Along with two business partners, Lori Shewell opened Once Upon A Child in Abilene in October. Shewell, who is a grandmother, said that she was probably going to be one of her best customers. She also expects the military families in the area to embrace the store as a place to sell outgrown children’s clothing and gear instead of packing them to move to the next base.

16.  This is the second time around for Shewell and her daughter Allyson Shewell and partner Paul Lewis to open a franchise in Abilene. In 2015, the three launched Plato’s Closet, which is two doors from the Once Upon A Child location. Shewell said, “We have people come in all the time and ask, ‘Do you buy children’s stuff?’ We just decided we’re missing the boat. Abilene needs a store like this for kids.”

Company History

17.  Once Upon A Child was started in 1985 by Lynn and Dennis Blum in Perrysburg, Ohio. Before opening a store, Lynn Blum had been selling her three sons’ and friends’ and neighbors’ clothing in a garage sale from her house every week. The Blums finally decided to open a permanent store after they noticed that Goodwill often accepted and sold baby clothing and accessories. After a few years, Dennis Blum quit his job to work with Lynn full time.

18.  After Winmark Corporation spent four years working out the kinks in running a franchise with Play It Again Sports, the company was ready to purchase another chain. In 1992, Winmark acquired Once Upon A Child from the Blums and started franchising right away. Today, Once Upon A Child is one of Winmark’s biggest and most successful chains with locations around the United States and Canada.

Entrepreneur’s Franchise 500

19.  Once Upon A Child ranked No. 110 on Entrepreneur’s 2020 Franchise 500 list.

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 2020 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

• Please click here for detailed information on Once Upon A Child’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2020 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2017

• Outlets at the Start of the Year:  348
• Outlets at the End of the Year:  360
• Net Change:  +12

2018

• Outlets at the Start of the Year:  360
• Outlets at the End of the Year:  379
• Net Change:  +19

2019

• Outlets at the Start of the Year:  379
• Outlets at the End of the Year:  388
• Net Change:  +9

Company-Owned

2017

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2018

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

2019

• Outlets at the Start of the Year:  0
• Outlets at the End of the Year:  0
• Net Change:  0

Section V – Financial Performance Representations (Item 19, 2020 FDD) and Analysis

• The following is a financial performance representation entitled “Unaudited Statement of Average Annual Sales and Gross Profit.” The gross profit figures do reflect the cost of sales but do not reflect the operating expenses that must be deducted from the gross profit figures to obtain your net income or profit.

• The following statement of average annual gross sales and gross profit includes average gross sales and gross profit during the 12-month period ended December 28, 2019 (Winmark’s fiscal year) as reported by the 366 franchised Once Upon A Child Stores located in the United States and Canada that commenced operations in each of the years 1988 through 2018.

• This statement includes information from only those Once Upon A Child Stores in the United States and Canada that had been in operation by the same franchisee or owners for the 12-month period ended December 28, 2019.

• There are no material financial and operational characteristics of the U.S. Stores that differ materially from the Canadian Stores included in this financial performance representation.

• No other Once Upon A Child Stores are included in this statement due to insufficient history of operations (not in operation for the 12-month period ended December 28, 2019 or transferred during this period).

• The financial statements Winmark receives from franchisees for these Stores are unaudited, and Winmark does not audit or independently verify, or express an opinion regarding, these statements.

• There were 366 franchised Once Upon A Child Stores that had been in operation by the same franchisee or owners for the 12-month period ended December 28, 2019. All 366 Stores are reflected in the average.

• This financial performance representation does not include information for the 22 Once Upon A Child Stores that opened or transferred in 2019. No Stores closed in 2019 after being opened less than 12 months.

Part 1 – Statement of Average Gross Sales and Gross Profit of 366 Franchised Once Upon A Child Stores for the Fiscal Year Ended December 28, 2019

Year Opened – 2018