Other Mothers: FAQ
1. If I bought a franchise, what would you do for me that I couldn’t do for myself?
This is a favorite question for a bank loan officer to ask or business advisors to ask, and it is an excellent question. This is a business with a lot of details that make the stores run in an efficient manner. The efficiency and knowledge of buying and processing is a key factor in the stores moving at the fast pace that is required for the high turnover rates. It takes a lot of experience and data to know exactly what things should be purchased from the customers, and at what price they should have in order to move them quickly. A combination of operations manuals, pricing guides, training, Point of sale systems, and other computer programs tailored for Other Mothers helps us to know when you are on track or not in your buying and selling. Our easy accessibility helps you to get answers quickly and have the guidance you need as your business grows. Because the business is somewhat subjective by nature and because most of our items do not come from vendors but from the customers, having the proper training and knowledge will save costly mistakes that can make or break a new business owner.
In addition, we have volume purchasing agreements worked out with our various vendors of new items, racking systems, indoor signage, computers, and even banking charges for credit card transactions. Therefore, we are able to save you hundreds to thousands of dollars.
We have a long-strong track record that exceeds 30 years in business, bankers and landlords prefer to work with a ‘known’ rather than an ‘unknown’ when it comes to lending money or leasing space. Because we have actual hard data for your Business Plan projections and are not just guessing at what a store might be able to do, your chances of getting a loan or securing a lease are far greater than if you were trying to open a similar business independently with ‘guesstimated’ projections.
We use the newsletter you receive from us as a gathering place for new ideas that come from the storeowners and the franchise headquarters. We built positive change into the system. Every year we continue to grow in a positive direction with the help of the great ideas the franchisees provide. Things change over time, so by making good use of data that comes in from around the country, we are able to adjust to the current times and conditions.
Buying an Other Mothers franchise lets you use our experience and the expertise of our other store owners.
2. How much does it cost to open a store?
To open and run a standard-size store (about 5,000 square feet) costs about $140,000 to $170,000 depending on the location. Your out-of-pocket expenses depend on the type of loan you get. Under normal circumstances, this amount includes everything you need including: the franchise fee, buying merchandise and equipment, loan servicing costs, indoor and outdoor signage, lease hold improvements and deposits, and a small buffer while you build your customer base over the first one to three years. All costs are detailed in our FDD (Federal Disclosure Document).
3. How much do I pay you to help me open and run a store?
We charge a one-time franchise fee of $24,995 (the lowest in the industry) and weekly royalties of four percent (2%) of your total gross sales.
2nd unit Franchise Fee $14,995
Area Developer starts at 3 units.
Area Developer Franchise Fee starts at $49,990
Each additional unit Franchise Fee $10,995
4. How much money can I make? Best question ever! However, the Federal Trade Commission (FTC) does not allow us (or any other franchise) to make earnings claims except under fairly stringent circumstances such as audited financials from each of the store owners. Once we are in the business plan stage of the process, we are able to provide you with projections based on your demographics, the type and amount of loan that best suits your needs, the amount of lease costs that are specific to your case, whether or not you intend to be a hands-on operator or an investor, and our experience as store owners and operators.
5. How long does it take to open a store?
Commonly, it takes about two to three months to open a store after all the legal papers have been signed, the space negotiations completed, and the loan is in place. After you receive the initial paperwork, there is a mandatory 14-day cooling-off period before you can sign any binding papers. You should also allow about three weeks for going through all the paperwork in the franchise document. If you want to open a store in March, then you should probably start the process in December or January. The two biggest time factors and most difficult parts of getting the store open are the securing of a loan and a proper lease space for your store. We are here to guide you through this process.
6. How do I get my merchandise?
This is part of your training. You’ll learn where to acquire the merchandise and how much you should pay. You’ll work with an experienced buyer both in an operating store and in the field. You’ll also receive price lists showing the maximum amount you should pay for each item. Usually in a new store we fill-in with more new merchandise until you have had a chance for the trade-in process to provide you with the majority of your on-going inventory.
7. Can my friend and I be partners in this business? You can be partners, but we discourage this as a possible source of friction between even good friends. Also, it can be more difficult for partners to obtain a loan. Often the bank will evaluate the loan based on the financially stronger partner. We usually recommend that one person (the financially stronger one) be the owner. If you wish to work with your friend, then you might want to consider hiring them as a manager.
8. Have you ever had a franchise store go out of business?
Yes, under the old system that started with very small stores, we’ve had both stores that went out of business and other stores that have been highly successful. Our strongest stores are now the larger stores in nicer centers, so this is the model we use from the very beginning now. Although some of the small stores grew into mega stores, we have tested the model that starts with a bigger store from the beginning. This takes this out of the realm of ‘hobby business’ into a real business with a faster return on the initial investment costs, and a faster path to income for the store owner or business investor. None of the stores that have started with the new larger model in nicer centers first have gone out of business. Although we can minimize the risk of store ownership we cannot guarantee that you will be successful. Ultimately your success or failure will depend on how well you follow our system, how much attention you pay to what is going on in your store, and how well you and your employees interact with your customers. What we can do is guide you on store location, prices you should charge and pay, give you access to other store owners, give you access to our training store for as frequent retraining as necessary, and help you in other ways such as keeping an eye on problem areas such as ballooning inventory or costs management. We have new Point of Sale systems that tie into your books along with a comprehensive camera system that makes it much easier for a store owner or investor to locate problem areas before they become a bigger problem along with our guidance and experience.
9. Can I keep my children and my employee’s children at the store?
We have no policy against it and even see it as a benefit that our store owners can keep their children with them. Young adults and teenagers often learn a lot of great life skills helping while they are employed by their parents. So long as the children don’t greatly disrupt business, the decision is really yours. We have a fairly liberal policy for some of the employee’s bringing their children to work, but it is on a case by case basis and up to the store owner’s final decision.
10. Do Other Mothers stores carry new merchandise?
Our stores do have some new merchandise, although the profit margin is not as good as on the used merchandise and we generally cannot offer it anymore inexpensively than the big box stores. We like having some unusual or educational new items that fit particularly well with our concepts, but we do not take up too much room or tie up too much money with these products because we know that our best ‘sellers’ are still in the children’s used market. This helps our stores stay very competitive and healthy in today’s economy.
11. How tightly do you control what I can do as an Other Mothers store owner?
We don’t believe in tight control. Our responsibility is to serve you. If you want to try something new, then we will tell you if we’ve had experience with what you want to try and help you to document it with the lowest risk factors. If we haven’t had experience with what you want to do, then we will advise you and work with you to monitor the situation. We want it to be ‘your’ store, and we value your ideas for improvement greatly, but we also want to protect you from mistakes we or other store owners have already made.
12. How big does our city have to be to open an Other Mothers store?
We recommend you have about 40,000 to 100,000 people within a five-mile radius of your store. We sell large volumes of merchandise at inexpensive prices. Doing this depends on having a high turnover of merchandise and that depends on having enough customers in the area to keep the merchandise turning over. We compete extremely well against other stores that may have some similarities to ours, but we don’t compete well against our own stores, therefore we are very careful to place you in a large enough territory that allows you to draw from surrounding areas with minimal competition.