How Much Does It Cost to Open a Music Store Franchise?
Consumers spend upwards of $6 billion a year on musical instruments and equipment. So, it’s no surprise that entrepreneurial musicians are looking to turn their passion into profits within the music resale industry.
But, unfortunately, being a talented musician doesn’t always translate into owning a successful music business. From site selection and employee management to merchandising, marketing and financing, there are many moving parts – and costs – in a business that those without entrepreneurial experience may struggle with.
That’s why many aspiring music resale store owners turn to the franchise model. With a proven framework for every business process imaginable, music resale franchises like Winmark’s Music Go Round® are the perfect solution for aspiring business owners. Here is a quick breakdown of the costs associated with opening a music store franchise over an independent startup, and why franchising is well worth the initial investment:
Music resale stores with a good amount of inventory typically have a store footprint of at least 2,800 to 3,000 square feet. For high-traffic and highly-visible areas, independent operators could easily spend hundreds of thousands of dollars on securing a site alone. And, they have little direction on site selection and contractual negotiations, aside from the advice of realtors and leasing agents.
Within a franchise system, however, you have access to the guidance of experts in resale site selection, setting you up for success before you even open your doors. With five retail brands and over 1,200 stores, Winmark® understands all the nuances of commercial real estate, as well as the needs of our Music Go Round and other brands’ franchisees. We have found cost-effective real estate and negotiated favorable contracts in nearly every market, and have decades of research and experience informing all our real estate support.
Stocking a music store full of inventory is another significant initial investment. And for music enthusiasts, it can be easy to get carried away buying different unique instruments and equipment that may not be big sellers. This can quickly put them in a difficult position, as they need to turn over inventory constantly just to stay on top of expenses.
A store with an inventory of $200,000, for example, would need to turn over their inventory three times a year to generate just $140,000 in annual sales. For someone with little experience in inventory management or merchandising, this feat becomes even more difficult.
Within a franchise system like Winmark’s, however, franchisees go through extensive product and inventory management training. They also have access to ongoing support and best-in-class point of sale, inventory management and pricing software systems. And, with regular inventory and field operations support from managers – with experience at retail giants like Guitar Center and Target – franchisees easily track and manage inventory.
The numbers speak for themselves. Our average store’s gross sales exceed $1 million, for a gross profit of nearly $500,000 each year.* With optimized inventory management and pricing processes, Music Go Round franchisees are able to efficiently stay on top of inventory needs and generate impressive returns.
Marketing and Advertising
Many small, independent music store owners take on marketing and advertising efforts themselves, investing sparse amounts of time in social media and grassroots initiatives. While marketing may seem like an area where you can cut corners as a new business owner, you actually can’t afford to.
Music Go Round franchisees, on the other hand, have the support of a marketing manager and team dedicated to delivering professionally-produced television and radio commercials, digital marketing assets, event marketing materials, local store marketing programs and so much more.
As a Winmark franchisee, you will have access to a media buyer experienced in working with the Music Go Round brand. They’ll work with you to lay out your media plan ensuring your marketing dollars are spent in the right places to generate the best return on your investment. And, with Music Go Round’s international presence, you’ll benefit from widespread brand awareness that startups can’t compete with.
The Winmark Difference
Your music resale store business investment will depend on many different factors – site location, utilities and maintenance costs and inventory management capabilities, among many others – that it can be difficult to predict the exact cost to open. For many independent operators, this can quickly add up to be a significantly higher investment than expected, especially if they don’t have extensive business management experience.
However, when you open a music store with a franchise like Winmark’s Music Go Round, all your initial costs are wrapped up in your fixed, upfront franchise fee. And, you have the invaluable opportunity to consistently draw from the industry-leading expertise and guidance of our corporate team – which will undoubtedly pay in dividends throughout your business ownership.
Turning your passion into a thriving business becomes easier when you’re backed by a leading franchisor guiding you every step of the way.
Interested in a business opportunity in the growing music resale industry? Learn more about opening a Music Go Round in your community.
* *The Average Store numbers are the 2017 Average Gross Sales and Average Gross Profit amounts stated in Item 19 of the 2018 Music Go Round® Franchise Disclosure Document (as reported by the 32 stores that had been in operation at least one year as of December 30, 2017). Of the 32 reporting stores, 14 or 44% of the stores attained or exceeded the Average Gross Sales and Average Gross Profit. The Top Quartile Average Gross Sales and Average Gross Profit only relates to 8 of the reporting Music Go Round® Stores who ranked in the top 25% of the gross sales range. Of the 8 reporting stores in the top quartile, 4 or 50% of the stores attained or exceeded the top quartile Average Gross Sales and Average Gross Profit. A new franchisee’s results will likely differ from these results.