Blog/The Cost of Launching a Child Fashion Wear Franchise: Breakdown & Comparisons

The Cost of Launching a Child Fashion Wear Franchise: Breakdown & Comparisons

    Are you interested in starting a children's fashion apparel franchise, but not sure about the expenses involved? In this article, we break down, compare and contrast the costs of owning a children's fashion apparel franchise. Now you can make an informed decision about your investment.

    Why invest in children clothing franchise

    Kids fashion apparel franchises have become increasingly popular in recent years since the market is growing and provides a lot of lucrative opportunities.

    However, launching a new business can be expensive. And when you opt for a franchise, you have to make sure it's cost-effective. To discover main advantages of being a franchisee versus starting your own business check out our previous article. Here we will explore the cost of opening a children's fashion boutique under a franchise and compare it to expenses beared by an independent store owner. For each type of cost we'll examine various policies used by children's clothing franchisors. This will help aspiring entrepreneurs make an informed decision between opting for a franchise or opening an independent store.

    Franchise Fees and Royalties

    The main difference between going solo and becoming a franchisee cost wise is financial obligations towards your franchisor. Usually, you've got your franchise fees and royalties. The former are all upfront expenses that you pay for the right to use the franchisor's brand, products, and services. Royalties, on the other hand, are ongoing costs paid by the franchisee for the continued use of franchisor's intellectual property.

    Each company weighs upfront costs against royalties. Some franchisors have lower fees, but higher royalties, while others choose the opposite franchising policy. Regarding royalties per se, certain companies require a flat fee, whereas others charge a percentage of your gross sales. Furthermore, in some cases franchisees pay ongoing monthly or yearly royalties, and in other situations franchisors require royalties to be paid over a specific period of time.

    Choupette has no royalties at all, so you need to cover only upfront costs and then simply enjoy revenues and profits. So, carefully consider franchising cost policy and examine both the upfront cost and the ongoing fees to determine which franchise fits your budget and goals. Remember that franchise fees and royalties are the price of representing an established brand, utilising a proven business model, and receiving ongoing support. Compare and contrast what you pay against what you get.

    The Cost of Starting a Child Fashion Wear Franchise: A Breakdown & Comparisons

    Real Estate Costs

    The location of your store is critical for its success. We've covered main strategies for picking an ideal location in our previous post. The most effective strategy is selecting a clearly identifiable and convenient location for your target audience. Depending on the franchise you choose, there are various real estate costs to consider, including rent, build-out costs, and security deposits.

    Rent is the price of your lease. Build-out costs cover construction, fixtures and equipment for you may need to convert selected location into a children's fashion store. Security deposits are upfront payments to landlords required to cover potential damages to the property or unexpected termination of lease agreement.

    Some franchisors may oblige you to rent a specific space: a corner or an inside store at a mall or a shopping center. Others may provide a list of approved locations, helping you find the perfect spot for a franchise. Choupette lend their expertise and experience to franchisees regarding any issue, including finding the best spot for a store.

    Real estate costs can vary widely depending on multiple factors. Research the costs of leasing commercial property in your area and compare them to the real estate costs of the franchises you're considering. Check market trends and historical data to account for potential fluctuations in rents and other expenses.

    Inventory Costs

    The Cost of Launching a Child Fashion Wear Franchise: Breakdown & Comparisons

    Managing inventory is a crucial part of running a children's fashion apparel store, whether you opt for a franchise or start your own business. A well-stocked and up-to-date inventory ensures you have the products your customers need and desire. However, managing your stock can be expensive and time-consuming if done incorrectly. But first let's examine various components of inventory costs.

    Initial stocking expense is the price of inventory needed to launch your business. Various factors influence this expense, including store size, transportation costs, and stock prices. For instance, a children's fashion apparel franchise offering high-end designer clothing will require a larger initial inventory investment than the one that offers budget-friendly options.

    Re-stocking cost is an ongoing expense of maintaining certain quantities of specific items. Again, multiple factors influence this cost, including store size, product popularity, and sales volume. Effective stock management usually requires special software which helps you track sales and automatically re-stock items when their quantity falls below a specified amount.

    Some franchisors may oblige you to purchase stock from specific vendors, and then you cannot control stock prices, logisics and other inventory cost components. On the other hand, you will enjoy lower prices due to economies of scale as the whole franchise network purchases from the same factories. Sometimes large corporations become monopsonies or single buyers for small manufacturers, so they dictate prices and not the other way round.

    In other cases franchisors allow you to source products more freely. But then you lose economies of scale advantage and have to invest time and money into finding and vetting producers. So, make sure to carefully examine franchising agreement regarding inital stock and re-stocking costs.

    Choupette manufacture apparel, so the procurement process is straightforward, which lowers inventory costs. And when your franchisor is also your supplier, it's in their best interest to provide high-quality clothing. Because the more you sell, the more you purchase from them and the more money they make. Since Choupette has zero royalties, their main source of income from frahcnisees is revenue from selling apparel. And that makes this particular franchisor very invested in the franchisees success.

    Marketing and Advertising Costs

    Offering a high-quality product at affordable process won't make a difference if no one knows about your offer. Therefore, you have to spend on marketing and advertising. Opting for a franchise may save you some expenses through global campaigns and collaborations with the franchisor or your fellow franchisees.

    However, you still have to finance the initial launch campaign. And you get only one opportunity to make a proper first impression. Keeping in mind that potential customers will remember a botched campaign much longer than a successful one. Also, you'll need to pay for ongoing marketing and advertising, including seasonal and holiday sales and promotions. To constantly remind potential and existing customers about your brand.

    Depending on the franchise you chose, initial launch campaigns can cost anywhere from a few thousand dollars to tens of thousands. Many factors influence campaign price, including its duration, your target audience, and communcation channels. You should also factor ongoing marketing and advertising campaigns into the overall cost of operating the franchise.

    Of course, the more marketing and advertising support you receive from the franchisor, the better. But different companies use different approaches to promoting their goods. Some focus primarily on local marketing while others launch national or international campaigns. You'll have to assess potential franchises in terms of their effectiveness at attracting and retaining customers through marketing and advertising.

    Take all the aforementioned components into account when estimating potential marketing andd advertising costs of opening your store as a franchisee.

    Other Costs

    The Cost of Launching a Child Fashion Wear Franchise: Breakdown & Comparisons

    Beyond franchise fees, real estate, inventory, marketing and advertising costs you have other expenses to consider when launching a franchise business. Let's examine the most common, so you can better estimate the required investment.

    Training your personnel is paramount and saving on it can cost you your business. Franchisors typically educate their franchisees about the company's operations and what it means to represent their brand. In certain instances you'll receive ongoing support and assistance, including regular updates on products, services and industry trends. Find out the amount and level of training you can expect from your potential franchisor and who will bear the costs of educating your personnel.

    Equipment costs are also worth considering. From point-of-sale systems to store fixtures and office supplies, equipment costs are inescapable, whether you opt for a franchise or start your own company. Inquire, if your prospective franchisor requires you to purchase equipment from specific vendors or allows to choose any producer you fancy. Equipment costs can add up quickly, so make sure they're within your budget.

    Insurance is another cost you'll have to cover as a franchisee. Because operating a children's fashion boutique involves risks and liabilities as any other venture. Multiple factors influence insurance premium, including the level of coverage and the insurance provider. It's important to shop around for insurance to compare costs and coverage options.

    Before signing the franchise agreement consider all major costs, including training, equipment, and insurance. Factor them into your overall investment and budget for starting a children's fashion apparel franchise. Compare these costs within different franchise offers to make an informed cost-effective decision.

    The Cost of Starting a Child Fashion Wear Franchise: A Breakdown & Comparisons

    Why Choupette Clildren’s Fashion Store Franchise is financially easier to launch

    Choupette is an established reputable brand and partnering with them can lower the required investment, as we've mentioned in previous sections.

    First, Choupette requires a comparatively low initial investment unlike other franchisors. To open a store under their fanchise you need from $150k to $200k, including rent, equipment and initial stock. And remeber that Choupette has no royalties, so the above figure constitutes all franchise fees you'll ever pay.

    Second, you'll receive comprehensive training and ongoing support for free. The training covers all aspects of running a successful franchise business, including inventory management, marketing, advertising, offline sales and e-commerce operations. Expert support team assists franchisees with solving any issues they may face and providing guidance on running the business. Choupette is very motivated to help you succeed since their main source of income from franchisees is purchased stock. So, the more you sell, the better for them.

    Third, Choupette helps franchisees with choosing location and negotiating real estate fees. Because they understand it can be a challenge and especially so for new franchisees. Choupette team is experienced in finding and securing optimal locations for franchisees to ensure they reach the target audience and hit their desired sales goals.

    Fourth, you'll receive consulting and guidance on creating your own online plarform or Instashop. If there are suitable marketplaces in your region, Choupette will assist you in picking the right one for sales maximisation. And any orders or inquires made within your geographic loaction on the global e-commerce website will be automatically re-directed to your platform.

    Fifth, for each potential franchisee and every prospective location Choupete develops a Profit and Loss financial model to calculate the risks involved. Imagine, your potential franchisor acts as your business counsel and advises you to proceed with opening a store only if the risks you face are below average. It doesn't get much better than this :) Getting a green light from Choupette means you can focus on growing your business and achieving your goals as a proudd owner of a children's fashion boutique.

    A profitable and rewarding investment

    The Cost of Launching a Child Fashion Wear Franchise: Breakdown & Comparisons

    Opening kids fashion apparel store as a franchisee can be a profitable and rewarding investment, if you carefully consider all the costs involved. We've examined the franchise fees and royalties, real estate costs, inventory costs, as well as marketing and advertising costs. And then covered several additional costs – training, equipment, and insurance.

    You can see how Choupette Children's Fashion Store Franchise clearly stands out from the crowd in their desire to help potential franchisees succeed. If you're interested in learning more about this offer, check out our guide about application process.

    Images by master1305 and pikisuperstar on Freepik and image by Freepik

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    Anastasiya Vasilkova
    Business Development Director

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