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Description

How to Open a HobbyTown Franchise?

To begin your journey as a HobbyTown franchise owner, you'll first need to complete a franchise application. Once your application is reviewed, you may be invited to meet with company representatives. This process often includes an initial phone call, interviews, and possibly attending a discovery day at the HobbyTown headquarters in Lincoln, Nebraska. Here, you can gain insights from existing franchisees and learn about the brand's operations. After completing these steps, if all goes well, you will receive approval to open your own HobbyTown store.

What Are the Initial Investment Requirements for a HobbyTown Franchise?

The estimated total investment to launch a HobbyTown franchise ranges from approximately $340,000 to $610,000. This includes various costs such as the initial franchise fee of $49,500, inventory costs between $150,000 and $300,000, and additional expenses for retail fixtures, signage, and initial advertising. It’s crucial to ensure that you have the necessary capital to cover these costs, as well as to maintain a minimum inventory of $150,000 post-opening.

Why Consider a HobbyTown Franchise?

HobbyTown stands out in the hobby retail market, offering a diverse range of products including model railroads, radio-controlled items, and educational toys. If you are passionate about hobbies and enjoy engaging with customers, becoming a HobbyTown franchisee could be a fulfilling venture. The franchise is known for its strong brand loyalty and support network, providing franchisees with training and operational assistance to help ensure their success.

Is Owning a HobbyTown Franchise Right for You?

Owning a HobbyTown franchise can be a rewarding opportunity, especially if you have a keen interest in hobbies and retail. The market for hobby products is primarily targeted at individuals aged 12 to 55, making it a vibrant demographic. However, competition exists from other hobby stores, so understanding your local market is essential. As a franchisee, you will need to adhere to HobbyTown's operational standards and maintain inventory levels to thrive within your protected territory.

HobbyTown Franchise Financial Requirements

Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.

A broad sector defining similar types of franchise businesses.

Industry

Retail Franchises
A more specific division within the broader industry.

Category

Specialty Retail
Available financing options to help start the franchise.

Funding Year

1985
The main organization that owns the franchise brand.

Parent Company

HobbyTown Unlimited Inc.
The key individuals guiding the franchise’s strategy and growth.

Leadership

Bob Wilke
The official business address of the franchisor’s headquarters.

Corporate Address

1133 Libra Drive, Lincoln, Nebraska 68512
The total amount required to launch the franchise.

Initial Investment

$340,000 - $610,000
The initial fee paid to join the franchise system.

Franchise Fee

$49,500
Ongoing percentage of revenue paid to the franchisor.

Royalty Fee

4.75%
Regular contribution toward the franchise’s advertising fund.

Marketing Fee

2%
The minimum liquid capital you must have on hand.

Cash Required

$150,000 - $300,000
The minimum total assets (minus liabilities) you must possess.

Net Worth Required

$250,000 - $500,000
The typical yearly revenue generated per franchise location.

Average Revenue

$1,455,633
The middle value of yearly revenue among franchise locations.

Median Revenue

$1,282,737
The smallest reported annual revenue among franchisees.

Lowest Revenue

$285,736
The largest reported annual revenue among franchisees.

Highest Revenue

$4,699,159
The estimated timeframe to recover your initial costs.

Breakeven Time

12 Months
The estimated period to recoup your total investment.

Investment Payback

12 Months

HobbyTown Franchise Unit Growth Summary

A breakdown of corporate, franchised, and total units, with yearly net changes shown in the chart and table.

The overall number of operating franchise locations.

Total Units

100
The number of locations owned by independent franchisees.

Franchised Units

100
The number of locations owned and run by the franchisor.

Corporate Units

0
Units 2021 2022 2023
Total Units 110 106 100
Net Change YoY -4 -6
Franchised Units 110 106 100
Net Change YoY -4 -6
Corporate Units 0 0 0
Net Change YoY 0 0

Company Background

HobbyTown is a leading retail franchise specializing in hobby and craft supplies, model trains, and educational toys. Founded in 1980, HobbyTown has grown to over 150 locations across the United States. The franchise is dedicated to providing a diverse selection of products catering to hobby enthusiasts of all ages, from model building and remote control vehicles to arts and crafts supplies. With a commitment to quality and customer service, HobbyTown aims to inspire creativity and foster a sense of community among hobbyists.

Franchise Opportunity

Investing in a HobbyTown franchise presents a unique opportunity for entrepreneurs passionate about hobbies and crafts. Franchisees benefit from a recognized brand with a loyal customer base, comprehensive training programs, and ongoing support from the corporate team. The franchise model is designed to empower owners to create a vibrant store that reflects local interests while leveraging the established HobbyTown brand to drive sales and customer engagement.

Corporate Structure

HobbyTown, LLC operates as a limited liability company and has its headquarters in Lincoln, Nebraska. The company was originally founded as a single store and has evolved into a franchise system, providing opportunities for independent operators to join the HobbyTown family. Each franchise location operates under the HobbyTown brand, adhering to the company's standards for product selection, customer service, and store presentation.

Royalties

Franchisees are required to pay a royalty fee of 5% of gross sales to HobbyTown. Additionally, there is a national advertising fund contribution of 2% of gross sales, which supports marketing efforts and brand promotion. These fees contribute to the overall growth and visibility of the HobbyTown brand, ensuring that franchisees benefit from collective marketing initiatives.

Company Mission

The mission of HobbyTown is to be the premier destination for hobby enthusiasts by offering an extensive selection of quality products and exceptional customer service. The company is committed to fostering creativity and exploration in the lives of its customers, encouraging them to pursue their passions and share their interests with others. Through community engagement, educational workshops, and special events, HobbyTown aims to create a welcoming environment that inspires lifelong hobbies.

Brand Story

HobbyTown's journey began in 1980 when it opened its first store in Lincoln, Nebraska. The founder recognized a growing demand for hobby supplies and crafted a vision to create a community-focused store that celebrated all things related to hobbies. Over the years, HobbyTown has expanded its footprint, adapting to trends and customer preferences while maintaining its core values of quality, service, and community involvement. Today, HobbyTown is not just a retail store but a gathering place for hobbyists, offering a wide range of products and experiences that bring people together.

Frequently Asked Questions

The initial franchise fee for a HobbyTown franchise is $49,500 for a single store. There are discounted fees for purchasing multiple stores, starting at $42,000 for the second store and decreasing to $30,000 for the seventh through tenth stores.