IS PLAY N TRADE A GREAT FRANCHISE OPPORTUNITY?
January 26, 2008 by Sean Kelly
Filed under Business
(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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Ed and Jeff,
I think I read in their FDD that you can use any POS as long as they have access to it through the internet/VPN. I would use what ever the standard is. This way if they had good support they could run reports for you and tell you suggested MSRPs, Old inventory that needs to be bought back, trends and so on. There is a benefit to using their software.
With PNT you should do some research on how they changed their model this past few months. They have gone through some changes because of their store failure rate. Maybe explore some of the other franchises. Gamer Doc is growing slow so they may be more attentive to your needs. Their new stores are designed for social gaming. Replays has a successful model but their branding is a little off. Also Game On is new and my fit your needs. I saw on there website they have other services other then retail. Just some suggestions
Bill,
Thanks for your comments about Disc Replay. With all due respect to your comment about branding, we believe our “branding” is right on. Play N Trade is making alot of changes as they are trying to find the right formula. At Disc Replay, we have been in business since 1994, and we believe we have it togther right now. Our first franchisee who opened in the second half of 08, has just moved forward to open 2 more stores. We have just sold several new franchisees in the past few weeks, and we are continuing to open company owned stores. For anyone interested in buying a franchise in this field, we would encourage them to come and look at our stores, or at a minimum, talk to our franchisees before making any decision. We use at item 19 financial performance representation in our franchise disclosure document. We offer very large protected areas, and very low fees. The fact that we own multiple company owned stores, and that we continue to open them, is an indication that we feel their is money to be made in owning stores, not just in selling franchises. When you talk to us, there is never any sales pressure, no “take away” selling tactics, just a good open conversation about our opportunity. I have great respect for all the players in this space, I just feel we have a great track record, and encourage people to come visit a Disc Replay store if they are serious about a video game franchise opportunity.
Best Regards,
John Chesny
President and Founderr
Disc Replay
I must say, they are a persistent franchisor. I contacted them about two years ago and still get emails. Having worked for a very large Franchisor (20 billion a year – some of the biggest brands names in the Hotel and Real Estate space); I can confirm that franchisors are interested in selling franchises. Some franchisors care about their franchisee’s (a 20 billion a year Franchisor care – because at that point, the franschisor’s revenue stream is from the monthly royalty fees, not the start up ante). If you remember Quizno’s – it hit the franchis world like a ton a bricks, people lined up and invested 200K-300K to open up a subway knock-off. You can get many open and operating Quizno’s for under 75K nowadays.
With respect to PnT, their differentiator is their events. Plus, the margins are only on the used games, as the 4% gross margin on the new games essentially goes straight to PnT as their royalty structure is in the > 4% range. So you’re paying for a concept, and if you live in any decently populated area you have a ton of competition. GameStop and EbGames (same company) along with Best Buy, and Toys r Us own the video game market in my area.
Betting on the used game market to make a living is simply a bad business model – I get that it works for company owned stores like GameStop, but they get to keep the margins on the new games, where at PnT you turn new game margins over to the Franchisor.
Franchising is tough – I think the best advice is to adopt the herd mentatlity like what happended with Quiznos. I see/saw that with PnT which is why I begged off. If you’re going to Franchise, get with a Franchisor where the majority of their revenue is NOT franchisee start up fees.
error above, last paragraph I meant to say “DO NOT ADOPT the herd mentality”
This site is just a joke… it is not written by concerned people that just want to be helpful with their advice… it is basis…it is basically a PR stunt by GamerDoc and the other copy cat companies that are trying to convince you that Play N Trade is not a good investment….but theirs is.
Just be aware that GamerDoc hires bloggers… use its corp staff to type this BS all the time….
It is too bad they don’t have any real value they can offer to potential franchisees aside from bashing Play N Trade… they only have 4 stores… do you think they have any buying power with the publishers or vendors…. Do you think they get any allocation in product.. any MDF money or Price Protection… they are a joke…you would be better off opening your own Video game store and saving the royalty you have to pay them…
Ask them…. Who on their staff has any real video game experience…who?????
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.
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
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
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!
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
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.
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
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
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
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.
Be sure to check out: PLAY N TRADE Forum Gets Spammed N Slammed
Also, the article links at:
PLAY N TRADE: Overview & Links
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.
Hello Bill, This is Wendy Carolino, the CEO of GAME ON you just mentioned. I’m glad to hear that my sincere remarks (below) stood out for you. We are proud of our competition and have taken the opportunity to organize a franchise with a solid vision and leadership team. We’d be thrilled to share more about this great opportunity with you. Please get in touch… http://www.gameonfranchise.com.
Bill’s Comments – “All of them had great things to say about the industry but Game On stood out. I forget the CEO’s name but she said the are not looking for fast growth. The wanted hand pick their franchisees and pay as much attention to them to succeed and fast growth was not their concern. The had great things to say about Play N Trade and actually told me to go check out all the competition.”
John,
I had been looking at a Play-N-Trade franchise for a while now. I decided to look around prior to making a decision. In reading the comments by Bill I did look at the other two opportunities mentioned and as a result of his comment skipped your company completely. In returning here to see what else might be listed I came across your reply. Of course it is well stated and brings forward some valid points. I will be taking a look at your business opportunity as well.
Regards,
Jeffery Williams
http://www.linkedin.com/in/jwilliamsoh
You make some valid points, but your info is wrong. The margin on new games is 13%-16%, and more on accessories. This is still not a lot of profit, but if you run your store right you can make money. You are right about the used being very important, and paying a franchise fee is tough, but not having a strong buying presence in this market will criple you. Joining Play N Trade makes more sense than the other options. They will have buying power and be able to purchase direct like Gamestop. Pricing will get cheaper, games will arive on time, and you can compete with anybody. PNT is about to be the third largest specialty video game chain in the USA.
Play N Trade is a joke. I went in to talk to an owner about his store. What i heard was shocking. Play n trade does not have a distributor or buying power. He was responsible for ordering his own games. I went in two days after ufc undisputed was released. I wasnted to pick one up but the owner told me they only received two copies for each platform. I couldn’t belive that a gamestore would only receive two copies of a big title such as ufc. For the forty five minutes or so not one customer entered the store. The pricing was high and the owner told me that play n trade provided the software that updated pricing. But when toys r us sells new games cheaper than play n trade sells them used you have a problem. I wouldn’t waste the time in buying one of these franchises. I could tell this owner of play n trade wishes he had not as well.
I love the arrogance of this guy. Incidentally, his “empire” of stores in Michigan is now closed. http://www.unhappyfranchisee.com/play-n-trade-mi-bankruptcy-auction/ . Virtually everything he said on these blogs was a lie, and it has now been proven.
Played & Traded:
Are you saying that this MI auction was for one of the stores owned by Robert Meyers & Gamers Guild Holdings Inc, “the largest franchise holder in the PNT family”?
Do you know which stores franchisee Gamers Guild Holdings closed?
He sounded pretty confident just this past November.
Robert, is this true?