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Real Deals Franchise Costs $141K – $229K (2024 Fees & Profits)

Real Deals is a home décor and fashion franchise founded in 2003 by five sisters who initially opened their stores for fun. It started franchising in 2006 and has grown into a well-known name featured in Entrepreneur’s Top 500 franchises, praised for combining style with affordability.

Located in Jefferson, Georgia, Real Deals operates a series of locally owned shops that regularly refresh their inventories to keep offerings new and exciting. This strategy not only promotes frequent customer visits but also builds a strong community connection through exceptional customer service and a welcoming shopping environment.

To support its franchisees, Real Deals provides a comprehensive system that includes training, marketing tools, vendor relationships, and inventory management. This ensures franchise owners are well-prepared to operate their stores successfully, making it easier for those new to retail to adapt and thrive in the competitive home décor and boutique market.

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Initial investment

Type of ExpenditureAmount
Initial franchise fee$30,000
Travel and living expenses while training$1,500 – $3,000 per person trained
Real Deals on Home Décor® branded products$500 – $2,000
Real estate improvements$5,000 – $25,000
Rent$1,350 – $5,350
Equipment, furniture, fixtures, décor, and supplies$5,000 – $13,000
POS system, computer hardware, and software$3,000 – $4,500
Signs$5,000 – $8,000
Pre-Opening advertising$5,000
Misc. opening costs$500 – $3,000
Opening inventory$55,500 – $85,500
Advertising – 3 months$9,000 – $15,000
Additional funds – 3 months$20,000 – $30,000
Total Estimated Initial Investment$141,000 – $229,000

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Franchise fees & Royalties

Initial Franchise Fee

Upon signing the franchise agreement, franchisees are required to pay an initial franchise fee of $35,000. This fee includes a $5,000 refundable security deposit to cover potential damages for non-compliance or to offset any outstanding amounts upon termination of the agreement.

Royalty Fee

Franchisees must pay a royalty fee of up to 7% of gross sales, with the current rate set at 6%. This fee is payable weekly and may be increased to the maximum rate with 30 days’ notice.

Pre-Opening Marketing Fee

A pre-opening marketing fee of $5,000 is mandatory. This fee will be used for grand opening marketing and promotions within the franchise territory. Franchisees may be required to pay this fee directly to the franchisor for distribution to vendors.

Marketing Cooperative Contribution

Franchisees may need to contribute 1% of gross sales to a marketing cooperative if one is established in their area. This contribution is recognized as fulfilling part of the local marketing requirement.

Local Marketing Requirement

Franchisees must contribute 1% of gross sales to local marketing, with a minimum monthly expenditure of $500. The franchisor may increase this requirement and mandate up to $15,000 in local marketing expenditures in the first year.

Successor Franchise Fee

A fee of $2,000 is required upon entering into a successor franchise agreement, provided that the franchisee meets all stipulated requirements at the time of agreement renewal.

Franchise Agreement Transfer Fee

If a franchise is sold, a transfer fee of $2,000 is applicable. This fee is payable prior to the franchisor’s approval of the sale and the signing of any new agreement.

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How to apply

1. Research the Franchise

  • Investigate the market presence and reputation of the Real Deals franchise.
  • Assess the demand for home decor and boutique items in your target area.
  • Explore reviews and feedback from existing franchisees about their experiences.

2. Review the Franchise Disclosure Document (FDD)

  • Carefully read the FDD provided by the franchisor, which includes critical details about the franchise system.
  • Understand the financial implications, obligations, and legal rights both for you and the franchisor.
  • Consult with a franchise attorney to clarify any legal terms or conditions.

3. Secure Financing

  • Evaluate the total investment required, including franchise fees, initial setup costs, and operating capital.
  • Explore financing options such as loans, franchisor financing, or partnerships.
  • Prepare a detailed business plan to aid in securing loans or investor support.

4. Choose a Suitable Location

  • Identify a location that aligns with the brand’s target market and visibility requirements.
  • Consider factors like foot traffic, accessibility, and proximity to complementary businesses.

5. Complete Required Training

  • Participate in the training programs offered by the franchisor.
  • These programs typically cover product knowledge, operations, customer service, and sales techniques.
  • Training may be conducted at corporate locations or possibly onsite.

6. Obtain Necessary Licenses and Permits

  • Research the specific licenses and permits required to operate a Real Deals franchise in your area.
  • This may include business licenses, sales tax permits, and health and safety inspections.
  • Stay compliant with local, state, and federal regulations.

7. Set Up Your Franchise

  • Follow the franchisor’s guidelines to set up your store, which includes design, layout, and initial inventory.
  • Install necessary business systems and software for operations, accounting, and customer management.
  • Hire and train staff according to corporate standards and local needs.

Disclaimer

Disclaimer: This content has been made for informational and educational purposes only. We do not make any representation or warranties with respect to the accuracy, applicability, fitness, or completeness of the information presented in the article. You should not construe any such information or other material as legal, tax, investment, financial, or other professional advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, advertisement, or offer to buy or sell any franchises, securities, or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the franchise and/or securities laws of such jurisdiction.

All content in this article is information of a general nature and does not address the detailed circumstances of any particular individual or entity. Nothing in the article constitutes professional and/or financial and/or legal advice, nor does any information in the article constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content in this article before making any decisions based on such information or other content.

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