Play It Again Sports Franchise Costs: Estimated Initial Investment (Item 7, 2022 FDD)

• The typical size of a Play It Again Sports Store ranges from 3,500 to 4,000 square feet. For several items discussed below, your cost will increase as the number of square feet increases.

• Except where otherwise noted, all fees that you pay to Winmark are non-refundable. Third-party lessors, contractors, and suppliers will decide if payments to them are refundable.

1.  Initial Franchise Fee:  $25,000

• The Initial Franchise Fee for new Play It Again Sports 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:  $26,000 to $38,000

• Your investment in fixtures and supplies necessary to operate the Store is highly variable. Your exact investment depends on several factors, including the size and condition of the premises, inventory levels, transportation costs, financing costs, and similar factors beyond Winmark’s or your control. The cost will increase as the number of square feet increases.

• This estimate includes the cost of a skate sharpener (if purchased) which could cost up to $12,000. It is your discretion as to the quality of the skate sharpener you purchase (if needed) for your store. The prices will vary based on your customer needs.

3.  Signs:  $8,000 to $12,000

• This item is for interior and exterior signs for the Store. All signs must meet Winmark’s standards and comply with your landlord’s requirements as well as any local government regulations.

• You must purchase all interior and exterior signs through Winmark’s approved, preferred third-party suppliers.

4.  Security System and/or Cameras:  $1,000 to $4,000

• The franchisor requires that you purchase a security system that includes security cameras, motion detectors, entrance security, and glass breakage detectors. You must purchase a minimum of 3 to 4 cameras depending on the size of your Store.

5.  Point-of-Sale (POS) System:  $20,000 to $23,300

• 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 $4,500 software license fee you pay Winmark  for the Proprietary Software. It also includes the $750 DRS Maintenance Fee. It does not include sales tax and shipping costs.

• You must obtain the computer hardware components through Winmark.

6.  Leasehold Improvements:  $5,000 to $9,000

• You will need to lease the premises for your Store. Rent is estimated to be approximately $40,000 to $90,000 per year depending on factors such as size, condition, and location of the leased premises. At times, franchisees are able to negotiate 2-4 months free rent with the landlord upon commencement of the lease.

• Typical locations for your Store are smaller free standing locations and strip shopping malls.

• The estimated cost of leasehold improvements could include:  carpeting, slat wall, lighting, and decor.

7.  Build-Out:  $35,000 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:  $5,000 to $10,000

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

9.  Letter of Credit:  $0 to $5,000

• A letter of credit is not required by Winmark. However, if orders are needed to be placed through Winmark, you will be required to establish a line of credit with Winmark. To establish a line of credit with Winmark, you may provide a letter of credit from your bank or a cash deposit at the time orders are being placed.

• Your lending institution may require a deposit to secure a letter of credit in support of your line of credit with Winmark. The amount of letter of credit or cash deposit necessary is determined by the dollar amount of all orders but typically will not exceed $5,000. Winmark will pay the supplier(s) and invoice you for the amount due.

• This deposit is generally refundable, although the costs incurred in obtaining a letter of credit are generally non-refundable.

• Winmark will offer limited financing to qualified franchisees in the purchase of this store inventory.

10.  Opening Inventory:  $90,000 to $120,000

• This amount assumes your opening inventory will include both new and used sporting goods items. Winmark requires that you have a minimum of $50,000 in used inventory when you open your Store and encourages you to have a much larger amount of used 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 $50,000 in used inventory.

• The mix of inventory offered at your Store will be subject to seasonal changes. The estimated amount for your opening inventory does not reflect your need to purchase additional inventory year-round to reflect demand.

11.  Miscellaneous Pre-Opening Expenses:  $35,000 to $50,000

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

12.  Rent – First 3 Months:  $12,500 to $20,000

• This amount estimates the rent expense you will incur during the first 3 months of Store operations.

• Rent is estimated to be approximately $50,000 to $100,000 per year depending on factors such as size, condition, and location of the leased premises. At times, franchisees are able to negotiate 2-4 months free rent with the landlord upon commencement of the lease.

• What you pay in rent will depend on local rental rates.

13.  Additional Funds – 3 Months:  $30,000 to $35,000

• This amount estimates the expenses you will incur during the first 3 months of Store operations, including initial wages and fringe benefits; insurance premiums; 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.

14.  Total:  $292,500 to $401,300

• Winmark bases this total on its estimate of nationwide average costs and prevailing market conditions and Winmark’s 33 years of experience in the business.