International Law

Can You Make Money with a Play N Trade Video Game Franchise?

It is funny how shills for a franchise system will post on a forum, expecting that no one has actually done any research.

For example, over at the franchise pundit forum, we read that

Re: Play N Trade Video Game Franchise: "Play N Trade is the best thing to happen to the Video Game Industry since the NES. It’s a franchise model, which means the owners have the ability to make alot of money or screw it up. The store and everything it stands for, is the best thing out there..."

Uh, there is only one little problem here. Several months ago, I did some research on this franchise and wrote:

"Here are the 2007 financial statements for Play N Trade.

Let's see 30 stores generating 80k in royalties or less than 3k per store.

Assume 1/2 stores open in 2006, so double the 3k to 6k. At a 4% royalty rate - geez, these guys are making money had over fist."

You can read the rest of thread about Play N Trade at Franchise Pick.

Postscript; Ryan had a great summary of what makes a good franchise, in response to the original poster at the franchise pundit forum.

"Your premise is faulty. Strictly following a franchise model does not ensure success by any means, just like those franchisees who fail cannot universally be attributed to straying from the franchise system.

You need to have

an obvious competitive advantage,

systematic and reliable customer acquisition process,

great location with a lease premium no higher than the additional revenue the premium location will generate,

franchisor offering innovative and increasingly profitable product or service offerings."

Full post as published by Misleading Advertising Law on April 10, 2008 (boomark / email).