How Much Does it Cost to Start a Dollar Store Franchise?
Last Updated: December 27, 2021
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Buying a Dollar Store Franchise Rate Quotes #
As consumers have continued to become more price savvy, dollar stores have grown in popularity. After all, who doesn't love a bargain? Dollar stores are popular places to shop in all economic climates. But, unlike other retail stores, they don't suffer during a recession! In fact, consumers turn to them more often in hopes of saving some cash.
In 2010 alone, the dollar store industry raked in more than $53 billion in revenue. Becoming a dollar store franchise owner provides a great opportunity to tap into that ever-expanding market.
Cost to Start a Dollar Store Franchise #
Initial startup costs begin at about $25,000 to $50,000 and range up to $300,000 or more. That covers most everything you'll need to get started, including inventory, the initial lease, fixtures, signs, office equipment and grand opening advertisement. It also covers the initial franchise fee - essentially the cost of using the company's name - which generally ranges from $20,000 to $30,000.
- Liberty Dollar offers complete startup packages ranging from about $25,000 to $275,000, depending mostly on the square footage of the store. The price includes inventory, freight, furniture, fixtures, training and access to the company's buying network, among other things.
- Just-A-Buck requires a total initial investment of $130,000 to $230,000. The initial franchise fee accounts for $25,000 of that. The chain requires owners to have at least $50,000 in liquid capital. A 10-year franchise commitment is also required.
- Dollar Discount Stores of America requires a total startup investment of $73,000 to $146,000. Owners must have at least $20,000 in liquid capital, as well as good credit and collateral.
Cost to Own a Dollar Store Franchise #
In addition to the startup costs, you'll also be expected to pay recurring fees known as royalties. Royalties pay for continued use of the brand name, as well as advertising and other support from the parent company.
Most dollar store franchises collect royalties based on a percentage of your gross revenues. The fees are assessed weekly, monthly or annually. Just-A-Buck, for example, charges 4 percent of your gross revenues for royalties and another 2 percent to cover advertising costs.
Dollar Store Franchise Financing #
If you don't have hundreds of thousands of dollars in the bank to start a dollar store, consider one of the many financing options. You can secure a loan through your local bank, a lender that specializes in franchise financing, or the U.S. Small Business Administration.
Most dollar store franchises will be able to walk you through all of the financing options and suggest what's best for your situation. However, you will still be required to come up with a significant sum of cash to start the business - usually at least $20,000 to $50,000.