Once Upon a Child franchise

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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. 

Once Upon a Child business details

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 across the US 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:

  • Stores: 1,250+
  • Required investor net worth: $400,000 
  • Required investor liquid cash: $105,000
  • Minimum investment: $275,000
  • Maximum investment: $425,000

Can I start a Once Upon a Child franchise?

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.

How much does a Once Upon a Child franchise cost?

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:

  • Royalty fee: 5% of monthly gross sales
  • Marketing fee: $1,500 per year
  • Cooperative advertising: Maximum of 5% of sales
  • Local marketing expenses: Minimum amount – when combined with cooperative advertising is 5% of gross sales
  • Advertising fee: At brand’s discretion – up to 2% of gross sales
  • Transfer fee: $10,000
  • Renewal fee: $10,000

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Estimated key costs to open a Once Upon a Child franchise (new store):

Key Costs GuideLowHigh
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

Are Once Upon a Child franchises profitable?

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 the US 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.

What is the failure rate for a Once Upon a Child franchise?

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.

Why should you start a Once Upon a Child franchise?

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 the US, 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.

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What are the franchise territory policies for Once Upon a Child?

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.

What franchise resources does Once Upon a Child offer?

Once Upon a Child provide comprehensive support to their franchisees. Available resources include:

  • Site selection and construction: Franchisees receive help to identify a suitable store location in terms of demographics and favorable lease terms. Once Upon a Child also provide design and development support to build-out the store. 
  • Pre-opening training: The company provides extensive classroom/on-site training and retail education. It trains investors in business planning, customer service, store operations, merchandising and how to launch and run a successful franchise. 
  • Marketing and sales support: Once Upon a Child provides its franchise owners with good marketing and advertising resources and many tools to promote their stores. This includes professional media commercials, ad templates, digital and social marketing assets, event marketing materials, regional advertising, email marketing and local store marketing programs.
  • Third-party financing: Once Upon a Child offer limited financial support for investors seeking franchise funding to cover costs such as the franchise fee, startup costs, and payroll. Alternatively, you could work with the many independent funders who provide business loans to franchise operators.

What is the process for starting a Once Upon a Child franchise?

It starts with an application. You can begin the process here.

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.

Secure franchise funding with Swoop

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 the US. Just tell us what you need and leave the rest to us.

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Testimonials

Written by

Chris Godfrey

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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Article sources
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Swoop requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate.

Once Upon a Child: https://www.winmarkfranchises.com/once-upon-a-child/

Winmark: https://www.winmarkfranchises.com/about-us/company-history/

New investors: https://www.winmarkfranchises.com/once-upon-a-child/why-franchising-/investment-information/

Profitability: https://sharpsheets.io/blog/once-upon-a-child-franchise-sales-costs-profits/

Net margin: https://www.magestore.com/blog/what-is-a-good-profit-margin-for-clothing-stores/

Failure rate: https://www.vettedbiz.com/listing/once-upon-a-child/

Growth of resale retail: https://www.linkedin.com/pulse/secondhand-revolution-global-market-set-double-next-4-years-troveco/

Rising cost of living US: https://www.ers.usda.gov/data-products/food-price-outlook/summary-findings/

Independent funders: https://swoopfunding.com/us/blog/funding-your-franchise-a-guide-for-franchisees/

Application form: https://www.onceuponachild.com/home/own-a-store

Franchise funding: https://swoopfunding.com/us/blog/funding-your-franchise-a-guide-for-franchisees/ 

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