How much does it cost to open a Dragon’s Lair Comics & Fantasy ® franchise?
I will want you to have about $200,000 to open a franchised store. It will cost you approximately $130,000 to $155,000 in order to get the store open. I want you to have the additional monies available for operating expenses.
Of this your costs will be approximately (all numbers are approximations and will depend upon many factors that are not completely predictable and that will vary from location to location):
Starting inventory: ~$50,000
Initial Franchise Fee: $24,000 (Includes training and other expenses that the franchise incurs to bring a new franchisee “online”.)
1st Month’s Rent and Deposit: ~$14,000 (there is *extreme* variability in this)
Computer systems, software and credit card equipment: ~$10,000
Grand Opening Expenses: $10,000
Exterior Signage: ~$8000.00
Office Supplies: ~$2000.00
Licenses, professional fees, etc.: ~$5000.00
Actual expenses may vary.
How do you determine the items that you recommend for our starting inventory?
There is a multistage process.
First I calculate the amount that each store is selling in each department. Departments are groups of similar items that are grouped together. I then apply this percentage to your estimated initial inventory, while also rounding up or down based upon reasonable break points for ordering. For example, if some of the stores carry a marginal product line (like trading cards) that does not significantly contribute to its overall sales, I will ignore that amount and reallocate that minimal amount to another department. The stores also have a “Back Issues” department, but back issues are solely made up of items from the New Comics Department that haven’t sold. Since a new store doesn’t have old comics, we would not allocate any funds for this department.
Then I will help you contact distributors and attempt to order the core items that have sold well and some accessories.
I always like to keep a about 10% of initial funds allocated for inventory for the franchisee to use for items that they particularly love on the theory that what you love the most you’ll be able to convey your enthusiasm to others, leading to sales. Sometimes that is not necessarily true.
I stress that all items ordered for initial inventory are prospecting items, not certain sales. Just because an item sells well at one store, that doesn’t mean that it will sell at another franchisee’s store. These are well educated guesses based upon historical sales, not guarantees. No store will have the same mix of customers or employees.
How much will I make as a franchised store? What will be my return on investment?
I cannot and will not make such an estimate as such would be a promise and could carry civil liability that I am unwilling to assume. It can vary greatly dependent, upon other things, on the engagement of the franchisee, the location of the store, the time of year (whether school is in or not), and a host of other factors. While I will work to help you maximize your return on investment (not the least because the more money you make, the more money the franchise makes), I make no promises, expressed or implied, on any return on investment.
I very much appreciate that it is a very reasonable question and wish I could be more forthcoming.
Who are you?
I am David Wheeler. I grew up in Dallas Texas and spent much of my youth in comic book stores and playing table top games; Freedom in the Galaxy, Battlefleet Mars, Dungeon’s and Dragons, and many other games.
In 1982 I moved to Austin to attend the University of Texas. While there I had a crush and that person worked at a comic book store. We became friends and I began to work there too. When that store, Capital Comic Company, went out of business I began working at Phoenix Comics. When that store closed early in 1986, I decided to open my own store.
Dragon’s Lair Comics & Fantasy ® opened September 3, 1986. During the thirty years that I actively owned comic book stores, I operated up to four stores at one time. I served on comic book and game boards of directors (as PACER president, vice president, past president and member at large and GAMA as a member at large of their Retailer Board of Directors). My stores received numerous industry awards, including the “Power Retailing Award for Best Store”, the “Power Retailing Award for Best Store Design” and the “Power Retailing Award for Best Organized Play Program.”
Currently I manage the Dragon’s Lair franchisor.
What is the ongoing royalty?
There is a 5% royalty on all gross sales excepting monies spent in your store for gift cards and, of course, sales taxes. When gift cards are redeemed at your store, then those monies are subject to being considered part of your gross sales and subject to the royalty amount.
What is the amount of the Marketing Fee and what is it used for?
In addition to the ongoing royalty, there is a 1% Marketing Fee (of gross sales except for sales of gift cards and sales tax.) Marketing monies are used to promote and maintain marketing efforts for the stores in the franchise (not the franchise itself.) That is to say, the monies are used in various ways to try to encourage customers to buy things in your store, not to attract more franchisees.
May I sell things that are not in the other stores and how much freedom will I have in product choice?
I very much appreciate that each store is its own microcosm and that there will be demands for items at one store that are not at other stores. I also feel that if a store owner believes in a product and brings it in that, if it’s successful in one store, might lead to successes in other stores.
For that reason, though any new product line will need to go through a request process, I encourage franchisees to bring in new products. The franchisor has discretion to approve or disapprove such a request. My guiding principle for whether or not a new product line will be approved is whether or not it fits the brand. The brand contains comic books, games, pop culture and similar products.
One example that I use is a defunct comic book store “Gun Dog Comics”. This chain sold comic books, but they also sold dog food; the example being that dog food would not be approved for Dragon’s Lair Comics & Fantasy ® stores as it doesn’t fit the brand. On the other hand, the new San Antonio store at Alamo Ranch is planning to bring in Sanrio’s Hello Kitty ™ brand items which I heartily support and which does fit the branding of the stores.
If a company has a reputation for poor quality or has a history of breakage, then I would not approve it even if it does fit the brand. Such would hurt the reputation of the franchised stores and thus would not be acceptable.
Will my employees have to wear the same shirts as employees at the other store? Will my store have to look similar?
Yes. The brand has a specific look to which all franchisees are expected to adhere. Reasonable changes will be accommodated on a case by case basis and for good reason, but the goal is to present the public with a high quality, professional store. This requirement reflects Franchisor’s goal of attaining conformity to certain operational standards and details, Franchisor is not a joint employer and does not exercise control over franchisee’s labor and employment matters.
Will I have to use the same software as the existing stores?
Yes. The franchise has hired a company to do data crunching so that all the stores in the franchise can see what is selling at the other franchised stores. Different systems limit our ability to do this and also limits the ability of the other stores (and the franchisor) to aid a new franchisee.
Will I have to use the same credit card company and gift card company as the other stores in the franchise?
Yes. One of the advantages of the franchise is the ability to have gift cards from one store to be used at another. To do so, the cards need to have a common processor.