How to start a dollar general franchise
A Dollar General Franchise refers to a network of stores where all merchandise is sold at highly reduced prices technically called a closeout which is very popular in the United States. Thus, most dollar general franchise opportunities involve a closeout of both branded and generic merchandise in the same store.
Is dollar general a franchise? Although it has the word "dollar" in the name, a dollar general franchise is not limited to the strict definition of its products being sold at $1.00; some goods are sold at a higher or lower price. However, merchandise are usually sold at fixed prices ranging from half a dollar to about 60 dollars. They usually serve populations not large enough to have a Walmart store
A general dollar store franchise, sometimes referred to as a “small box” retail or “deep-discount retail” shop started in the 1950s. The concept evolved as a model of the ancient-styled general stores: small stores that had an exhaustive stock created to meet the daily demand of the typical consumer. The unique selling point of this franchise is the affordable dollar general franchise fee.
In such dollar general stores, most goods are sold below a sawbuck, and the major focus are those sold at $1; unbelievably cheap prices. An average store has a lot of products. In comparison to goods sold in their rival brand in the retail industry, Walmart, those sold in dollar general franchises are far cheaper.
Dollar general franchise opportunity
Another unique feature of a dollar general franchise startups is their modest structural design and accessible siting of stores where rent fees are really affordable. Usually, dollar general franchisees sell variety of common household items, such as detergents, utensils etc. Also, they stock larger items such as interior decoration design items, clothes, etc. Branded products have become a larger percent of most general stores, as an attempt to increase their loyal consumers.
Food products easily make up a sizeable chunk of general franchises’ products. They are strategic items that the franchisees buy and sell at cheaper prices in comparison to competing brands, with the aim of luring more customers; selling their products cheaply due to the low dollar general store franchise cost.
Dollar general franchise startup cost
From their inception, dollar general franchises cater to customers or families with low financial statuses. A large percentage of their clientele belong to the lower rung of financial ladder. It has been discovered that this social class are very conscious of little differences in products’ prices than wealthier individuals or families.
Also, clients with better financial status who had been affected by financial recession have been lured to patronize a general dollar franchise. As part of improvement of their marketing strategies, dollar stores have significantly improved the hygiene of their facilities and complied with standardized structural designs. This re-branding has led to an effective consistent appeal to customers with better financial status which has significantly increased their market growth, profitability, market share and “big-money” investments.
Increase in the variety of products sold in dollar general franchises has catalyzed a fast-growing retail behaviour where a customer daily purchases necessary items a.k.a. as a fill-in trip. Since dollar general franchises sold a variety of items, such could be done in a single store.
How much does a dollar general franchise cost?
The exponential rise of dollar general store franchise opportunities such as Dollar General, Dollar Tree and Family Dollar in the early 21st century have put these stores in competition with rival stores such as Target and Kmart. While their revenues grow astronomically, that of their competitors including their major competing brand, Wal-Mart, is stagnating. The proximity of a dollar general store in most neighbourhood also lure most customers, who get discouraged making a long walk or drive to a
Walmart on the outskirts of the metropolis, city or town and would prefer visiting a nearby dollar general store franchise, which sells majority of the items they need frequently.
Wal-Mart has opened its own chain of small-scale stores strategically located and modeled to rival superstores and large discount department stores such as the Dollar tree and family dollar. It is hoped that these stores would stem the success of dollar general franchises. It is estimated that there are now nearly 800 Neighborhood Markets as the small-scale stores are rightly called and there are still ongoing strategies to open new stores annually.
Buying Dollar General Franchise for Sale
But, wait! There are however some downsides to note if you want know how to open a dollar general store franchise. Most staff work far beyond a 40-hour week some working through unpaid breaks earning close to or below the minimum wage. Most dollar general franchisees have a skeletal staff strength with the possibility of having inadequate or even lacking fringe staff compensatory benefits. A lot of stores stretch the human performance of their staff to unbearable limits which in most cases sadly portend grave risks to their health. This issue must be addressed in your Dollar General Franchise business plan before you kick off.
Finally, employee morale is reported to be dispiriting in most dollar general franchises. All these are allegedly due to the desire to maintain a high-profit margin in the franchise dollar general businesses.