In this FDD Talk post, you’ll learn the following:
- Section I – Background information on the Style Encore franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Style Encore 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 Style Encore franchise, based on Items 5 and 6 of the company’s 2020 FDD
- Section IV – Number of franchised and company-owned Style Encore 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 Style Encore’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 61 franchised Style Encore Stores in the United States 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)
- 2019 average, median, high, and low gross sales and average and median gross profit for the first, second, third, and fourth quartiles of the 61 franchised Style Encore Stores in the United States 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 Style Encore Stores in the United States 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; and greater than $2,000,000)
Section I – Background Information
16 Things You Need to Know About the Style Encore Franchise
Encourages Growth of Women in Franchising
1. At the beginning of January 2020, the Winmark Corporation’s blog highlighted the fact that franchising has become an increasingly attractive pathway to entrepreneurship for women across the United States. According to research from Franchise Business Review, 35 percent of franchised businesses are owned or co-owned by women, reflecting strong growth in entrepreneurship among this demographic.
2. The growth in the franchise sector is reflective of a nationwide trend. The American Express 2019 State of Women-Owned Businesses Report found the number of women-owned businesses rose by 21 percent between 2014 and 2019, reaching nearly 13 million last year.
3. Greater participation of women in business ownership has had a profound impact on the economy. The aforementioned report found employment rose by 8 percent at women-owned enterprises over the past five years. At the same time, revenues grew by 21 percent to $1.9 trillion.
4. The American Express report identified three categories of entrepreneurs that help explain the growth of women in franchising.
- Need – Whether it’s due to unemployment or lack of opportunities, this segment of business owners is driven by a financial need. One consideration is the fact that there are a greater number of women working at a C-level and see entrepreneurship as the most viable next step in their careers. Others may have run into barriers within their existing roles and don’t feel like they’re exercising their full skill set, which business ownership would enable.
- Flexibility – The fact that many women are in a situation where they may need to balance caregiving and professional pursuits with their partner isn’t new. However, there is an increasing number of business concepts that enable greater flexibility so women can decide when and how frequently they work as a business owner.
- Opportunity – These business owners take a look at their community and see there’s a lack of specific product or service that they feel like they can provide. They take the initiative to build a business and capitalize on the opportunity.
5. In addition to these reasons, the attributes of franchising that draw many women to business ownership are varied. Franchising is a business model built for growth through replicable systems and processes. Many franchisors provide education or assistance when it comes to business planning and securing capital. And franchise brands are made up of a network of business owners who share their insights and support one another.
6. Citing research from FRANdata, The Wall Street Journal reported interior-decorating franchises as the segment with the highest percentage of women-owned businesses. Modeling and beauty pageant concepts have the second-highest proportion of women franchisees. Meanwhile, clothing, toys, and accessories franchises are in third place but represent roughly double the number of units of the first two categories.
7. Winmark has consistently had a strong track record of providing women with opportunities for business ownership across many of its franchise brands. Among all of the company’s brands, 58 percent of franchisees are women. Within Winmark’s clothing concepts, there is an even greater representation of women as business owners: Style Encore – 90 percent; Once Upon A Child – 75 percent; and Plato’s Closet – 66 percent.
8. The motivation for many franchisees within the Winmark family is rooted in not only the need and opportunity within their markets but also the desire to invest in a business that’s environmentally friendly. For example, Vermont-based multi-unit owner Stephanie Longshore always saw environmentalism as a top priority within her local community.
9. Longshore said, “In the early and mid-90s, you didn’t hear as much about the environment on a national level, but as long as I’ve lived in Vermont, it’s always seemed to be a shared priority among residents here. So, when we learned more about Once Upon A Child, we knew we had to bring these quality, cost-effective and recycled products – and sustainable business – to our community.”
New Location
10. Style Encore continues to grow around North America and one of its newest locations opened in Fort Myers, Florida in early May 2019. The grand opening celebration was held on May 9 and continued through that weekend. Shoppers received a $10 coupon with every purchase to spend at a later date. They also had the chance to win a variety of designer merchandise. Refreshments and treats were available all weekend.
11. Carolyn Rivera, owner of Style Encore Fort Myers, said, “Women like to have trendy, fashionable pieces in their closet for every occasion, so our goal is to make Style Encore the preferred store for fashionistas, bargain hunters and those who are recycling-conscious. Style Encore provides women the resource to sell items they no longer wear, get paid cash on the spot and then turn around and purchase new items at a tremendous value – up to 90 percent off regular retail prices.”
12. At Style Encore, consumers can expect a wide selection of the latest styles in casual and business attire at great prices, from leading brands such as Ann Taylor, Banana Republic, Chico’s, Coach, Gap, Talbots, Louis Vuitton, and White House Black Market, among others.
13. Rivera added, “When you shop at Style Encore, you won’t feel like you’re in a resale shop. Sure, all the merchandise is different, but the store has a relaxed, fresh feel that you won’t find in any other secondhand retailer. Plus, we’ve organized our new Style Encore by size and color, so it’s easy to come in and find great deals.”
Company History
14. Style Encore was launched by its parent company, the Winmark Corporation, in 2013. The first stored opened in Texas that year and franchising began immediately. Like Winmark’s other brands – Music Go Round, Play It Again Sports, Once Upon A Child, and Plato’s Closet – Style Encore resells gently-used goods, specifically women’s clothing.
15. Style Encore immediately pays cash to people looking to sell used women’s attire, footwear, handbags, and jewelry. While the items are second hand, Style Encore often stocks name brands and current styles. There are Style Encore locations all around the United States and a few in Canada.
Entrepreneur’s Franchise 500
16. Style Encore did not rank on Entrepreneur’s 2020 Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of Style Encore 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 Style Encore’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: 52
- Outlets at the End of the Year: 61
- Net Change: +9
2018
- Outlets at the Start of the Year: 61
- Outlets at the End of the Year: 67
- Net Change: +6
2019
- Outlets at the Start of the Year: 67
- Outlets at the End of the Year: 68
- Net Change: +1
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 annual gross sales and gross profit as reported by 61 franchised Style Encore Stores located in the United States that commenced operations during the years 2013 through 2018.
- This statement includes information from only those franchised Style Encore Stores located in the United States that had been in operation 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 franchised Style Encore Stores are included in this statement due to insufficient history of operations (not in operation by the same franchisee or owners for the 12-month period ended December 28, 2019 or transferred during this period).
- The financial statements Winmark (the franchisor) 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 61 franchised Style Encore Stores that had been in operation by the same franchisee or owners for the 12-month period ended December 28, 2019. All 61 franchised Style Encore Stores are reflected in the average.
- This financial performance representation does not include information for the 7 Style Encore Stores that opened or transferred in 2019. No Stores closed in 2019 after being opened for less than 12 months.
Part 1 – Statement of Average Gross Sales and Gross Profit for the 61 Franchised Style Encore Stores for the Fiscal Year Ended December 28, 2019
Year Opened – 2018
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