Once Upon a Child are a retail chain selling quality used and new children’s apparel, toys, equipment, furniture and accessories. They are a subsidiary of the Winmark Corporation, a national ‘resale retail’ organization that specializes in the reselling, upselling, and recycling of used goods to drive retail sustainability.
Headquartered in Minneapolis, Minnesota, and established in 1984, Once Upon a Child has been offering franchises since 1992. Today the brand has more than 1250 outlets worldwide and 95% of the products they sell are pre-owned – with every item checked for safety before going on sale. If you like kids, like fashion, and have a passion for recycling and promoting sustainability, this could be the franchise for you.
Once Upon a Child at a glance:
In comparison to many other retail opportunities, the entry point to a Once Upon a Child franchise is low, giving new entrants to the fast-paced business of selling clothing and children’s accessories a gentle introduction to the sector. The brand requires new investors to have a net worth of at least $400,000 and liquid assets of $75,000 to $105,000. Franchisees must also be the on-site owner/operator and personally manage the business unless they receive the company’s consent to hire a general manager to run the store. This means Once Upon a Child is not a strong option for passive investment.
Depending on location, size of your store, the amount of inventory you carry at opening, the size of your retail team, and many other variable cost factors, opening a new Once Upon a Child franchise can cost anywhere from $275,000 up to $425,000.
After opening, you can expect to pay a series of ongoing fees and charges, including:
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| Key Costs Guide | Low | High |
|---|---|---|
| Franchise fee | $25,000 | $25,000 |
| Fixtures and Supplies | $42,000 | $55,000 |
| Point of Sale system - technology | $22,000 | $29,000 |
| Signage | $8,000 | $12,000 |
| Leasehold improvements | $11,000 | $21,000 |
| Opening inventory | $65,000 | $80,000 |
| Store build-out | $20,000 | $50,000 |
| First 3 months’ rent | $15,000 | $24,000 |
According to external research, the average entry cost to a Once Upon a Child franchise is $331,000 and the average gross sales per location are $760,000. Most stores have turnover of $500,000 to $1,000,000, and older stores – those open 6 years or more – tend to have higher sales than outlets that have only been in operation for one or two years. This means you can expect to experience higher profitability as the store matures and you cement a local customer following. Once Upon a Child claim an average gross profit per store of 66%, although the average net profit margin for the children’s clothing sector in Canada is 7%. Supposing Once Upon a Child performs to the national net profit metric, it would take 6 – 7 years to recoup the typical initial investment.
Very low. Over the past three years, the failure rate has been 3% and over the past year, just 1%. The chain has increased its number of locations every year since 2016.
Relatively low initial investment, low failure rate, and an impressive claimed gross profit margin all point to a potentially successful franchise opportunity – even if it may take some time to get your money back. The trend towards recycling clothing is growing across Canada, as evidenced by the increasing number of ‘vintage’ stores selling pre-owned apparel. Couple this to a rising cost of living that is forcing more parents to seek more economic means to clothe their kids, and you have strong reasons to dive into the resale retail sector.
Franchisees receive an exclusive territory surrounding the location of their store. Computer mapping, which factors in population density and average household income and consumer traffic patterns, determines the boundaries of the exclusive territory, which is typically a three to five-mile radius around the site.
Once Upon a Child provide comprehensive support to their franchisees. Available resources include:
It starts with an application. You can begin the process today.
If you pass the qualification tests, next do your own market research. This would include an assessment of the competition in your selected operating area, and the potential for sales and growth. (Will the store be in a location that has plenty of families with children? Are there schools nearby? Where will your customers come from?). Calculate the likely footfall and how many sales you could make per day. If the data adds up, explore your franchise funding options, and be sure you meet the minimum net worth and liquidity levels. After that, make your initial investment, then start your training program.
Starting a new franchise can be an exciting opportunity, but it’s easy to get lost in a maze of business loan applications that can make funding your used clothing store a poor use of your time. Instead, cut out the hassle and cut to the chase. Swoop has the best lenders for the best franchises across Canada. Just tell us what you need and leave the rest to us.
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Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Barclays Bank, Metro Bank, Wells Fargo, ABN Amro, Quidco, Legal and General, Inshur Zego, AIG, Met Life, State Farm, Direct Line, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of consumer and business finance and insurance.
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