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(FranchisePick.com) According to a recent Play N Trade company press release:
Play N Trade is the largest and fastest-growing video game franchise worldwide. It is also one of the fastest-growing franchises worldwide across all industries. To date, the company has sold more than 400 franchises, opened more than 100 stores, and is now opening a new store every other day. The company provides exceptional training, support and marketing systems to its store owners, who in turn provide an outstanding customer experience for their shoppers. Play N Trade customers can try any video game before they buy, participate in local and national tournaments, have their consoles and games repaired, as well as buy, sell and trade video games.
ARE YOU FAMILIAR WITH THE PLAY N TRADE RETAIL CONCEPT OR THE PLAY N TRADE FRANCHISE OPPORTUNITY?
WHAT DO YOU THINK? PLEASE SHARE A COMMENT BELOW.
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Does anybody have information on how many play n trade franchisees closed their stores in 2010?
I’m the GM of a store in a new area, and am the primary operator of the business. We’ve been up for close to a year now, and I have a few comments you may find interesting.
1. Support from corporate is underwhelming. While they’re present for little things, big splashes are not tended to in an appropriate manner. Our computer system went down DUE TO corporate’s fudge-up, then they continued to blame my staff and me.
2. We have a unified buying program, but it does not have primary purchasing power. For most orders, I find that I will need to choose a 3rd party distributor who is reliable and bank on them from the get-go. My first order of 360 slims from the unified was sent back since they didn’t use my AMEX card, and instead insisted on COD.
3. A store’s average margin for the month will be 35%-40%. Bear in mind that operating costs can approach upwards of $10,000 a month and more, and that the franchise fee is 5% of your sales. A $30,000 sales month with $4,000 in rent, $1,200 in utilities, $4,000 in payroll, and franchise fees are at LEAST pulling your sales figure down to $20,000. On top of that, your cost of good sold (by these numbers) are $12,000 at the low end, and more likely around $14,000. On TOP of this, you pay into an ad fund that may not be used in your area, and that at any given time you may be sitting on thousands of dollars in aged inventory that takes up otherwise productive space. We have not seen a $30,000 month yet.
4. Since taking on my role I have seen 2 stores fail and a nearby PNT struggling in a far worse way than we are. We are very well capitalized, but the volume is simply not enough to run a business off of.
Play N Trade CAN work, but it requires intensive capital and huge levels of volume. After speaking with several area developers, it appears that the goal for a new store is to operate AT COST by the end of it’s first year. My recommendation is to have had retail experience, be well capitalized, and have a rock solid business plan before even CONSIDERING a Play N Trade franchise.
I own a PNT and things are going really well. Each owner controls his/her own destiny. This business model is not build for owners who want to have a bunch of kids running there business. It takes LONG hours and dedication. If you have never had any experience with ordering inventory or the video game industry, I’d stay far away from opening up a video game store. Gamer Doc is not a major player in the video game industry. They have a few stores and it will take them years to make any type of splash. I’d put disc replay and Game On it that class too. Out of all the video game franchises I looked at, PNT is by far the most well organized and banded names out there. Retail is a tuff sector to get into in this economy. GL with any choice you make. Just make sure you have at least 300k getting into any of these options.
778 days ago
[...] writer Sean Kelly posted the question IS PLAY N TRADE A GREAT FRANCHISE OPPORTUNITY? on the blog formerly known as FranchisePick, the 130 responses were predominantly negative. [...]
Greetings,
My Name Is Charles Heffeman I originally had a Play n Trade In New York, Until the economy struck I had to close it down before I would go nearly bankrupt. I Met Matthew Inan at a Company Conference in Florida back Sometime of 2008, He seemed like a Gentlemen at first but when he spoke the words of a monster and a Liar showed. In fact Matthew Promised me that he could help me start another Play N Trade in Florida, told me there were more opportunities since most Hispanics people had 3 or more Children. I pretty much liquidated all my inventory and turned it into cash so I could pay Matt the $50,000 deposit to start it. Once I gave him the Money, I never heard from him again. I called his Phone repeated times, But he never Answers. Called His stores, they Either don’t pick up, or when they do they tell me he’s not in and they never want to take my number. Matt Inan is a thief I am 67 years old, And I have never met a Con Artist So Eager to steal partners Money. I been seeing a lot bad things about him, I hope that me voicing with the community we can get out money back that we invested.
Matthew If You Reading This Please, You should Be ashamed of Yourself Ripping an honest man off.
do the math. here’s a scenario for you: if your future pnt store is lucky enough to do say $50k per month, and your average GP for new merch + used merch is 30% (which is actually BETTER than Gamestop’s %), than you have 15k to play with at the end of each month. rent + misc operating costs+ royalties will run about $10k per month. labor will run minimally 2500 per month. hmmmm, that leaves you $2500, less taxes, for a $130k investment (and a lot of risk).
in socal, which has more gamestops than anywhere else in the country, pnt has already seen store closures, including 2 in irvine, one of which cost the owner $300k and was originally going to be pnt’s training store. another store was approved by pnt corporate for a franchisee even after 3 other franchisees had passed on the location.
i recommend to all of you considering this franchise, or for that matter any video game store…..think long and hard about your decision, and ask some very aggressive financial questions of many current store owners….ask about how they are making money, what their bills come to each month, and what gross and net pretax profit margins they are actually experiencing.
i think you may be surprised at the answers you get.
Be sure to check out: PLAY N TRADE Forum Gets Spammed N Slammed
Also, the article links at:
PLAY N TRADE: Overview & Links
Play N Trade franchise conference in Vegas kicks off. Theme is “Stronger Together 2009″
http://www.unhappyfranchisee.com/play-n-trade-vegas-franchise-conference-underway/
http://www.bizzia.com/franchisepick/play-n-trade-franchise-conference/
PnT continues to try to sell franchises. Discovery Day franchise sales presentation today.
http://www.unhappyfranchisee.com/play-n-trade-franchise-discovery-days-continue/
Comments encouraged.
1053 days ago
[...] IS PLAY N TRADE A GREAT FRANCHISE OPPORTUNITY? January 26, 2008 (120+ [...]
I have been going to game stop and trading my games in for a while now, and everytime i trade My games in i dont get much out of them. I seen PLAYNTRADE last night while I was skateboarding and they seemed pretty high tech. So I was wondering “Do you get more money trading in your games at PLAYNTRADE or at GAMESTOP? Please reply ASAP
1074 days ago
[...] most comments: PLAY N TRADE: CA Suspends PnT Franchise Registration April 23, 2009 (250+ comments) IS PLAY N TRADE A GREAT FRANCHISE OPPORTUNITY? January 26, 2008 (120+ [...]
Two posts on the Play N Trade enforcement action. Comments welcome:
PLAY N TRADE: CA Revokes PnT Franchise Registration
PLAY N TRADE Franchise Registration Revoked
1112 days ago
[...] FranchisePick.com asked IS PLAY N TRADE A GREAT FRANCHISE OPPORTUNITY?, we got an earful… and 100+ [...]
California is not very happy with them.
http://www.corp.ca.gov/ENF/list/p/default.asp
Play N Trade
BEFORE THE DEPARTMENT OF CORPORATIONS
OF THE STATE OF CALIFORNIA
In the Matter of THE CALIFORNIA CORPORATIONS COMMISSIONER,
Complainant,
vs.
PLAY N TRADE FRANCHISE, INC.,
Respondent. )
Case No.: 993-5595, 993-5596
STATEMENT IN SUPPORT OF STOP ORDER REVOKING EFFECTIVENESS OF UNIT FRANCHISE REGISTRATION AND ORDER REVOKING EFFECTIVENESS OF UNIT FRANCHISE REGISTRATION
STATEMENT IN SUPPORT OF STOP ORDER DENYING EFFECTIVENESS OF AREA DEVELOPER FRANCHISE REGISTRATION APPLICATION AND ORDER DENYING EFFECTIVENESS OF AREA DEVELOPER FRANCHISE REGISTRATION APPLICATION
CITATIONS
DESIST AND REFRAIN ORDER
ANCILLARY RELIEF
Just some correction points here. . . 4% on new games is no where near accurate, according to many sources, many PNT franchisees, and the numbers Game Stop puts out. The average margin for new games, according to what I am hearing from PNT store owners, is about 15% (before royalties).
I have looked at Game Doc and Play and Trade, and what struck me about PNT was their amazing industry experience, especially in contrast with Gamer Doc (which has none). Their CEO used to be really high up in Game Stop, and they have a lot of people that have worked in this industry. I have decided I am going to do a PNT here in Oregon soon.
Bill,
Thank you for your comments and questions. Yes, you did read write that our initial franchise fee for a Disc Replay is $12,500, and that our royalty fee is 2.5%.
Extreme Value Pricing has been one of the cornerstones of success in our retail stores since 1994. Our customers come back to us week after week, because we deliver a great value.
In setting up the Disc Replay franchise system, our goal was to deliver extreme value. Our desire is to have every store do a high volume of business. When they do, our franchisees are happy, and 2.5% of a high volume store is still a lot of money. Now if the stores are low volume, at 2.5% it really isn’t that great. So the only way we do well, is when our franchisees do well. I am not afraid of that, because I believe in our system.
As a “student” of franchising for over 25 years, I analyzed the “rise and fall” of many franchise systems over time. In my opinion, I believe the two biggest reasons franchise systems “fail” are #1 A bad business model, and #2 A greedy franchisor who was more interested in their profit, than in their franchisees bottom line.
In answer to your question about company owned stores, the answer is simple. We do not view ourself as a “franchise company”. We have spent 15 years building a great retail concept, and now in select markets, we are offering people the opportunity to tap into it via franchising.
In terms of financing I hear you. It has become very difficult for people to get financing. At Disc Replay, we look for people with $100,000 in cash minimum, and a net worth in excess of $200,000.
Please feel free to email me at dr544@yahoo.com, and if I get someone looking for a working partner, I can let you know.
Of course if we can get the Dow back to 14,000, that would sure help.
Best of luck to you, and thanks again for your interest in this industry.
John Chesny
President
Disc Replay
John,
I was reading somewhere that your franchise fee is $12,500. What is the advantage of keeping your fees so low. In my mind it seems to limit the resources for franchisee support. I have been looking for a franchise for some time and since I have little start up capitol this is a factor in my investment. Also why would you keep opening corporate stores? Seems to me that corporate saturation would have a negative effect on attracting franchisees since you would be more inclined to favor corporate stores to grab more profit.
I was prepared to purchase a franchise last year but waited to long and lost alot of money in the market. I lost 65% of my investment and has effected my overall net worth and you know what that means, loans are almost impossible to get now and cashing out is not an option at this poin. Does anyone have a suggestions for me. I thought about getting a partner is this a good Idea? If so do you have potential franchisees that are under funded that you could partner up with me.
Thanks in advance!
Sean,
I think you are very right, this website is an excellent resource for people to utilize and look at when considering a video game business franchise. There may be some posts that are more valuable than others, but as you said, people can read and see things for what they are. I have tried to make my posts meaningful, and have always identified myself.
As far as play N Trade, I have a great deal of respect for them. They have accomplished quite a bit. I saw one of there very early stores and they have come a very long way.
As to Jim at Gamer Doc, I met him at a franchise show, and he was very professional, and a nice man at that. I am sure his franchisees will do well.
Investing in a business will be a monumental decision in your life. I am always honored and humbled when someone selects Disc Replay. The more information a person can get, the better their decision will be. I encourage all people who are considering any franchise to be very careful, and be very comprehensive in their analysis and selection process.
In todays economy, it is more important than ever to be prudent in your decision making. Many businesses are hurt, but retail video game stores are still working.
I started in the franchising industry in 1988, and I started Disc Replay in 1994. I have seen many things over the years, but I believe the video game business is an awesome opportunity. If anyone would like to contact me off board, my personal email address is dr544@yahoo.com. Even if you are thinking about a franchise away from this space, as a former business broker, I would be happy to give you my opinion of any franchise you may be looking at. Good luck to all.
John Chesny
President
Disc Replay
GamerDoc PR.
Not sure who you are and I know most of the people who worked at Gamer Doc because I am the President, so it is obvious that you do not have much to say good about Gamer Doc. However you also are malicious enough to use Gamer Doc in your tag.
We hope that everyone interested in the Video Game Business look at all the competition and pick for themselves. We believe the failure of any franchise harms all of us in the industry. And most unfortunately generally the person loses their home and their credit standing.
Please, this business is a business first and may not be for everyone, I can only ask that you realize the anger of Gamerdoc PR and be careful at any investment.
As far as my credentials in business, franchising and gaming it is all public information. Please find out for yourself and I know people in all of the above mentioned chains and we at Gamer Doc wish them and their franchisees nothing but success. My email is jbelanger@gamerdoc.com and I am more then happy to speak with any of you.
Much success to each of you in your life.
Jim
GamerDoc PR wrote: This site is just a joke… it is basically a PR stunt by GamerDoc…
This site has no affiliation or relationship with PnT, GamerDoc, Disc RePlay or any other video game franchisor. If it were a “PR stunt” why would your comments be published?
As for “shill” commenters, we get them all the time and they are fairly easy to see through. But the point is that this forum gives all sides a chance to present facts along with their opinions, and readers can come to their own conclusions.
IMHO, this conversation is valuable to potential gamer franchisees not so much to determine which franchise to buy, but to determine which issues they should investigate, and which warning signs they should look into, while doing their due diligence.