When it comes to choosing a franchise, there are no shortages of factors that go into the decision-making process. From business models to corporate support, prospective franchisees should delve through the Franchise Disclosure Document (FDD) to make sure the information detailed there matches what they pictured in their next business venture. More often than not, franchisees rush to Item 7 and eye the initial investment, making sure the number on the page is reflective of the number in their bank account—or at least the number they can comfortably borrow.
Because of the investment required to join many franchise concepts, Item 7 can make or break whether the opportunity is a good fit. Wireless Zone, the nation’s largest Verizon Wireless retail franchise, consistently presents an extremely competitive buy-in cost, with initial investment range from $142,500 to $328,500.
“We know that the initial investment is one of the first things that a prospective franchisee looks at during their research of various franchise opportunities,” said Keith Dziki, director of development for Wireless Zone. “Wireless Zone continues to stand out because our investment range is so competitive. We make it a top priority to keep the initial costs for our franchise offering down, ultimately letting franchisees focus on getting the business up and running without a huge financial burden hanging over their head.”
The low investment cost can be partially attributed to the reasonable size of the spaces franchisees buy or lease. Most stores range from 1,100 to 2,000 square feet, and they often do not require new construction. Once franchisees are up and running the brand also offers credit lines to help keep inventory fully stocked in stores. In addition, Wireless Zone maintains strong relationships with third party vendors who can help streamline construction and renovation costs. Through Wireless Zone’s relationship with Ascentium, franchisees may be able to acquire unique financing options for store equipment.
In addition to low overhead costs, the tie to Verizon Wireless also allows franchisees to opt out of the cost of extensive local advertising. The strong partnership between the two brands provides a natural boost in sales with name recognition and through the long-standing legacy that Verizon has in the wireless phone sector.
“Wireless Zone’s business model is designed to set franchisees up for success,” said Dziki. “The wireless retail industry is booming, and Wireless Zone goes above and beyond to capitalize on that by offering prospective franchisees an initial offer they cannot refuse.”
Beyond its low buy-in cost, Wireless Zone’s Financial Performance Representation (FPR) outlined in Item 19 of its FDD also outlines a strong profit potential. In the first quarter of 2016, for example, average gross revenue for the brand’s 153 stores that utilized a gross profit royalty model passed the $300,000 mark, with average gross profit topping $87,000. 169 locations utilized the gross profit model in the second quarter of 2016, recording an average gross profit of more than $90,000. Momentum continued in the third quarter, with 184 Wireless Zone locations utilizing the gross profit model and gross profits jumping again to more than $108,000. By the fourth quarter of 2016, the vast majority of Wireless Zone locations had moved to the growth profit royalty model. With 302 franchised locations utilizing that model, average gross profit rose yet again in the fourth quarter to more than $119,000.
“We’re proud of the hard work that’s gone into setting up a system that allows franchisees the opportunity to get into business for themselves at a low cost, but also to thrive once the business is up and running,” said Dziki. “The wireless retail industry is only getting bigger, and we’re excited to continue to work with local business owners who share a passion for staying ahead of the curve.”