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FDD Talk 2019: Play It Again Sports Franchise Review (Financial Performance Analysis, Costs, Fees, and More)

America's Most Lucrative Franchises of the YearAmerica's Most Lucrative Franchises of the Year

In this FDD Talk post, you’ll learn the following:

  • Section I – Background information on the Play It Again Sports franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Play It Again Sports franchise, based on Item 7 of the company’s 2019 FDD
  • Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Play It Again Sports franchise, based on Items 5 and 6 of the company’s 2019 FDD
  • Section IV – Number of franchised and company-owned Play It Again Sports outlets at the start of the year and the end of the year for 2016, 2017, and 2018, based on Item 20 of the company’s 2019 FDD
  • Section V – Presentation and analysis of Play It Again Sports’ financial performance representations, based on Item 19 of the company’s 2019 FDD, including information on the:
  • 2018 average, high, and low gross sales and average gross profit of the 252 franchised Play It Again Sports Stores in the United States and Canada that had been in operation by the same franchisee or owners for the 12-month period ended December 29, 2018, grouped by year opened (2017, 2016, 2015, 2014, 2013, and 2012 and prior)
  • 2018 average, high, and low gross sales and average gross profit for the first, second, third, and fourth quartiles of the 252 franchised Play It Again Sports Stores in the United States and Canada that had been in operation by the same franchisee or owners for the 12-month period ended December 29, 2018
  • number and percentage of franchised Play It Again Sports Stores in the United States and Canada that had been in operation by the same franchisee or owners for the 12-month period ended December 29, 2018, grouped by range of gross sales ($0 to $250,000; $250,001 to $500,000; $500,001 to $1,000,000; $1,000,001 to $2,000,000; $2,000,001 to $3,000,000; and greater than $3,000,000)

Section I – Background Information

10 Things You Need to Know About the Play It Again Sports Franchise

Ranked No. 11 on Power Retailers Report

1.  In late May 2018, Play It Again Sports announced that it had ranked No. 11 on Sports Insight’s 2018 Power Retailers report, which ranks retailers in order of their power within the overall sporting goods retail business. The rankings are based on sales, number of stores, number of employees, position within their category, as well as their influence and reputation within the sporting goods industry, as determined by Sports Insight editors in consultation with industry experts.

2.  The brand was also profiled by Team Insight for their May 2018 issue. Both articles highlighted Play It Again Sports’ unique, recession-proof concept as the key to the brand’s success. Patrick Quinn, director of Play It Again Sports at Winmark Corporation, said, “Even through the most difficult economic periods, parents still want their kids in sports. Play It Again Sports makes this possible by providing value in buying and selling quality used sports equipment.”

America's Most Lucrative FranchisesAmerica's Most Lucrative Franchises

Buys and Sells the Latest Sporting Goods Equipment and Technology

3.  With each season bringing new versions of the latest trends in sporting goods equipment and technology, Play It Again Sports fills the needs of players and parents who want to save money on updated equipment and clothes. Since new products are coming out all the time, there is a constant supply of like-new secondhand sports equipment, which Play It Again Sports buys up and resells to customers at a reduced price.

4.  Play It Again Sports noted that in recent years, some of the most popular trends have been advances in clothing fabric, wearable tech, and ergonomic equipment. In 2018, some of the biggest trends expanded on the way consumers integrate smart devices and training-specific gear.

5.  Play It Again Sports stores keep up with these trends by offering for sale some of the latest sporting goods available, including:

  • Smart Watches and Wearable Tech – According to Forbes, the wearable tech market is expected to reach $9 billion in revenue by 2022. With more people than ever wearing smart products, sports equipment manufacturers are catching on fast, which creates an abundance of products.
  • Reactive Fabrics – Recently, athletic clothes have become reactive. Examples include moisture-wicking and thermal fabrics. These fabrics react to changes in body temperature. For example, moisture wicking fabrics sense when your body becomes warm and damp. Rather than absorbing the sweat, it reacts and pushes the sweat outward to evaporate.
  • Training Equipment – According to Play It Again Sports, amateur athletes have become more interested in buying training-specific products to use outside of game time. Training equipment helps athletes target certain areas they wish to improve and train smarter. For example, lighter soccer balls help soccer players practice headers without risk of injury.

Company History

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6.  Play It Again Sports was founded in 1983 by Martha Morris in Uptown, Minneapolis as a sporting goods store selling new and gently-used sporting items. After growing the business and opening a few more stores, Morris became interested in franchising, so she consulted with Ron Olson and Jeffrey Dahlberg of the consulting firm, Franchise Business Systems.

7.  After Olson and Dahlberg saw how successful Morris’s stores were, they became interested in owning Play It Again Sports and Morris agreed to sell them the franchise rights in 1988. Two years later, Morris sold the rest of her stores to Dahlberg and Olson.

8.  Play It Again Sports became the first brand in what would eventually become the Winmark Corporation. Initially, Olson and Dahlberg named their new company the Play It Again Sports Franchise Corporation, but changed its name to the Winmark Corporation in 2001.

9.  Since franchising began in 1988, Play It Again Sports has grown into one of Winmark’s strongest and largest brands. Today, all Play It Again Sports stores are franchised and there are locations across the United States and Canada.

Entrepreneur’s Franchise 500

Franchises Ranked by Average Revenues and ProfitsFranchises Ranked by Average Revenues and Profits

10.  Play It Again Sports ranked No. 381 on Entrepreneur’s 2019 Franchise 500 list.

Section II – Estimated Costs

  • Please click here for detailed estimates of Play It Again Sports franchise costs, based on Item 7 of the company’s 2019 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

  • Please click here for detailed information on Play It Again Sports’ initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2019 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2016

  • Outlets at the Start of the Year:  297
  • Outlets at the End of the Year:  283
  • Net Change:  -14

2017

  • Outlets at the Start of the Year:  283
  • Outlets at the End of the Year:  281
  • Net Change:  -2

2018

  • Outlets at the Start of the Year:  281
  • Outlets at the End of the Year:  281
  • Net Change:  0

Company-Owned

2016

  • Outlets at the Start of the Year:  0
  • Outlets at the End of the Year:  0
  • Net Change:  0

2017

  • Outlets at the Start of the Year:  0
  • Outlets at the End of the Year:  0
  • Net Change:  0

2018

  • Outlets at the Start of the Year:  0
  • Outlets at the End of the Year:  0
  • Net Change:  0

Section V – Financial Performance Representations (Item 19, 2019 FDD) and Analysis

  • The following is a financial performance representation entitled “Unaudited Statement of Average Annual Sales and Gross Profit.” The gross profit figures do reflect the cost of sales but do not reflect the operating expenses that must be deducted from the gross profit figures to obtain your net income or profit.
  • The following statement of average annual gross sales and gross profit includes average gross sales and gross profit during the 12-month period ended December 29, 2018 (Winmark’s fiscal year) as reported by the 252 franchised Play It Again Sports Stores in the United States and Canada that commenced operations during the years 1988 through 2017.
  • This statement includes information from only those Play It Again Sports Stores located in the United States and Canada that had been in operation by the same franchisee or owners for the 12-month period ended December 29, 2018. No other Play It Again Sports Stores are included in this statement due to insufficient history of operations (not in operation for the 12-month period ended December 29, 2018 or transferred during this period).
  • The financial statements Winmark receives from franchisees for these stores are unaudited, and Winmark does not audit or independently verify, or express an opinion regarding, these statements.
  • There were 252 franchised Play It Again Sports Stores which had been in operation by the same franchisee or owners for the 12-month period ended December 29, 2018. All 252 Stores are reflected in the average.
  • This financial performance representation does not include information for the 29 Play It Again Sports Stores that opened or transferred in 2018. No Stores closed in 2018 after being opened less than 12 months.

Part 1 – Statement of Average Gross Sales and Gross Profit of the 252 Franchised Play It Again Sports Stores for the Fiscal Year Ended December 29, 2018

Year Opened – 2017

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