NTY Franchise Company’s Clothes Mentor is Bringing Transparency Back to Franchise Sales and the Numbers Look Great

Before you hand over your life’s savings to invest in a franchise, you need to make sure you’re buying into a company that’s completely transparent about the financial performance of the franchisees and the potential money you can make.

Beware of companies that don’t reveal the important numbers or hide behind fuzzy franchise figures that keep you in the dark about true profits.

Here at NTY Franchise Company, the parent company of Clothes Mentor, we’re proud to be one of the most financially transparent franchisors, allowing you, the prospect, a deep dive into the numbers that will make or break you as an owner. We’ve opened our books because we’re proud of our impressive sales figures that blow away competitors along with our 65% profit margin – all amazing retail stats we want to brag about!

In this blog, we’ve laid out a research roadmap you need to follow to make sure you’re buying into a company that will support you and your family in the American dream of business ownership.

First Comes the FDD

Pay close attention to the FDD. It’s a legal document that spells out all the terms of a franchise agreement to you the franchise buyer. It’s a full disclosure of the critical factors you should consider during the most-serious stage of due-diligence — before agreements are ultimately finalized and endorsed.

According to Franchise Rule law — established and enforced by the Federal Trade Commission (FTC), prospective franchisees must receive a copy of the FDD at least 14 days before they are asked to sign a contract or pay any money to a franchisor.

Every FDD is required to have 23 sections or “Items” — each with its own purpose. These range all the way from a history of the franchise concept to fees; services provided; actual contracts to be signed; and even acknowledgment of receipt of the document. Of the 23 Items required within FDDs, the one that often gets the most attention by prospects is the Item 19.

Look for a Detailed and Transparent Item 19

The FDD Item 19 details Financial Performance Representations. It’s the section that, according to FTC law, “permits but does not require” franchisors to provide prospects with a window into how much money they could potentially make owning and running a franchise. It typically details the performance of existing units or groups of units.

According to FTC franchise law, a franchisor is permitted to provide written or oral representations about the actual or potential financial performance of its franchise and/or franchisor-owned units if there is a reasonable basis for the information AND if the information is included in the FDD Item 19. Financial performance information that differs from that included in the Item 19 may be given only if: 1) A franchisor provides the actual records of an existing outlet that one is considering buying or; 2) A franchisor supplements the information provided in Item 19, for example, by providing information about possible performance at a location or under particular circumstances.

Believe it or not, if the above FDD 19 requirements are not met, it is literally illegal for a franchisor (or for their existing franchisees/affiliates) to provide you with any other financial performance information or projections of future income — either orally or written. For franchisors that choose to not disclose any formal representations in the FDD Item 19 (again — a right they have under FTC law) you as a prospect are completely on your own to project how the business will perform. Believe it or not this “no disclosure” dynamic is the case for roughly 50% of all franchise concepts out there. So, buyer beware if you’re considering buying a franchise that does not give you detailed performance financial information. On the contrary, NTY Franchise Company’s Clothes Mentor lays it all out so there are no mysteries or guesswork.

A MODEL FOR ITEM 19 DISCLOSURES

We at NTY Franchise Company are proud we’re a leader in the rapidly growing category of upscale resale and a model for financial disclosures in our detailed Item 19.

Clothes Mentor was NTY Franchise Company’s first — and remains its most popular — franchise concept within its portfolio of five established franchise brands. NTY Franchise Company acquired the franchise rights to Clothes Mentor in December 2006 when there were only two stores operating in Ohio. Shortly thereafter, in early 2007, NTY Franchise Company began marketing and selling franchise rights to the brand.

In a little over a decade, since NTY Franchise Company began franchising the Clothes Mentor brand, it has become the largest women’s upscale resale franchise company in America — with 145 stores today. With plans to reach a total of 200+ over the next several years, Clothes Mentor is quickly becoming a force in the global discussion on women’s upscale resale clothing.

Since Clothes Mentor is well established, with a significant number of units generating performance data, we go way out of our way in our FDD 19 to provide a wealth of information to prospective franchisees on how the fleet performs.

While other brands’ Item 19 may list net sales only, Clothes Mentor’s Item 19 digs deeper to give you net sales, gross profit/gross profit margin, operating expense breakdown and financial performance by years in operation – unheard of details for most franchise brands!

Check out the details in Clothes Mentor’s FDD Item 19 for 2017 and then compare it to other brands!

NET SALES DISCLOSURE
Net Sales is all revenues received from the sale of goods and services — less sales taxes, discounts, customer refunds and returns. With data on 135 Clothes Mentor stores open more than a year, NTY Franchise Company provides Net Sales data for each quartile of stores within the group — including what percent of stores within each quartile met or exceeded the average within the quartile. Let’s cover some of the numbers:

Of the 135 measured Clothes Mentor stores, the top quartile had Average Net Sales of $952K in 2017 (with a range of $1.62M – $757K); the bottom $328K (range of $440K – $153K); and the average — $600K. Roughly 43% of the stores in each quartile met or exceeded the average for the quartile. “These figures say a lot — as in my 26 years of experience I’ve observed how independent, non-franchised women’s apparel consignment stores typically generate annual sales revenues of $175,000 – $225,000,” notes Jim Wollman, Vice President of Franchising and Franchise Coach at NTY.

Looking at this relative performance another way, according to the 2010 U.S. census (most recent conducted), only 11% of ALL small businesses (defined as 20 employees or less) have annual sales revenues that exceeded $500K. This compares with roughly 60% of the 135 measured Clothes Mentor units having Net Sales over $500K. Clearly, 60% versus 11% is a heck of a comparison — further illustrating the power of the Clothes Mentor brand.

GROSS PROFIT DISCLOSURE
Net Sales is one thing, but Gross Profits is another — and often more relevant when analyzing a business. Gross Profit is Net Sales less Cost of Goods Sold. Note that Gross Profit does not reflect various store Operating Expenses (which we’ll get to later).

NTY Franchise Company provides Gross Profit and Gross Profit Margin (which is Gross Profit as a percent of Net Sales) for each Clothes Mentor performance group quartile — including again what percent of stores within each quartile met or exceeded the average of the quartile.

Of the 135 stores, the top Clothes Mentor quartile had an average Gross Profit of $618K in 2017 (with a range of $1.101M – $493K); the bottom $213K (range $293K – 104K); and the average — $390K. Roughly 42% of the stores in each quartile met or exceeded the average within the quartile. Overall, all quartiles have an average Gross Profit Margin of 65%. This 65% level is very attractive when compared with the approximate 30 – 35% average Gross Profit Margin for traditional specialty retailers — also highlighting the power of the Clothes Mentor franchise brand.

PERFORMANCE BY YEARS OF OPERATION
We go even one step further in the Clothes Mentor FDD Item 19 by disclosing Net Sales and Gross Profit/Gross Profit Margin by stores’ years in operation — including also what percent within each age category met or exceeded the average within the category. This disclosure is unheard of in many brand’s Item 19s and gives you visibility into how stores progress in performance over time. To no surprise, the longer the units are open — the better the performance.

For example, Average Net Sales for the oldest Clothes Mentor stores (8 – 10 yrs.) was $776K in 2017 (ranging from $1.527M – $427K); while the youngest category (1 – 2 yrs.) was $409K (ranging from $847K – $182K). Average Gross Profit for the oldest Clothes Mentor stores was $509K (range $1.032M – $270K); with the youngest being $264K (range $539K – $125K). Roughly 41% of the stores in each age group met or exceeded the average for the group. Quite impressively, average Clothes Mentor Gross Profit Margin remained consistent at around 65% among all store age categories — exceptional when compared with the 30 – 35% approximate average of specialty retailers.

OPERATING EXPENSE BREAKDOWN

Here at NTY Franchise Company, we also give you the prospect a peek into operating expenses, so you get a true picture of what it takes to run a store, pay for employees, insurance, etc. This is also grouped by age of store for the average of 82 Clothes Mentor units that have provided enough data for the compilation. This includes average: Rent/Insurance (12.9%), Marketing (5.2%), Payroll (22.7%), and Other (13.2% — which includes royalty fees of 4% of net sales). Collectively, when considering all the components and qualifiers of these figures detailed in the FDD 19, these compare remarkably well with traditional specialty retailers.

With an honest and detailed financial picture, you can easily see the potential of the brand- under various scenarios — to project your income potential as a Clothes Mentor franchise. With other brands, it’s just guess work and you should insist “Show me the numbers!”

PUTTING FDD ITEM 19 INTO PERSPECTIVE

It’s clear that we at NTY Franchise Company include a significant amount of information in our Clothes Mentor franchisee FDD Item 19 and the numbers are impressive versus industry averages. However, even with transparent disclosures, you need to keep in mind how various factors could influence some of the data regardless of which franchise concept you’re considering.

A key example is that some franchise owners draw direct meaningful salaries for themselves — included in payroll expenses of their units — while others do not. By providing disclosures compiled of data from so many units, NTY Franchise Company strives to make apples-to-apples comparisons easier — but the process is never perfect.

The bottom line is that a robust FDD Item 19 — like the one NTY Franchise Company provides on Clothes Mentor — goes a long way to help you make an educated, intelligent decision on whether to invest in a given concept. You should use this information as a key piece of the due-diligence process and enhance it with “kicking the tires” — including visiting franchise locations and calling owners themselves.

THE GOOD-OL’ ADMONITION ACKNOWLEDGMENT
Any discussion of the FDD Item 19 would not be complete without covering the admonition acknowledgment. Whether related to Item 19 or any other phase of your due-diligence process, you need to know that past performance is no guarantee of future results. The FTC requires such language in the FDD Item 19 — to caution prospective franchisees that their results may differ from that detailed in the Item 19.

While the FTC does not require specific language with the admonition, we at NTY Franchise Company say “Clothes Mentor stores have earned this amount. Your individual results may differ. There is no assurance that you will achieve the same or similar results.”

A SMART CHOICE FOR SUCCESS
Remember, there are no guarantees on anything in the franchise world — or life for that matter — regardless of how good the data or situation looks. But with more than a decade of impressive expansion in store count; very favorable data evident within its FDD 19; and the seasoned, highly-effective support infrastructure at NTY Franchise Company, the stage is well set for you, a prospective Clothes Mentor franchisee, to realize success. Mix in real focus, determination, some grit and hard work — and we know you will be great success!

NTY FRANCHISE COMPANY
Founded in 2006 and Located in Minnetonka, Minnesota, NTY Franchise Company is a pioneering leader in the rapidly growing category of upscale resale. It is the umbrella organization for three proven national resale clothing franchise brands: Clothes Mentor (women’s designer clothing franchise); Children’s Orchard (kids clothing franchise); and NTY Clothing Exchange (teens and young adults clothing franchise).
NTY also has two other successful national franchise concepts: New Uses (household furniture, décor, appliances franchise) and Device Pitstop (electronics repair and resale franchise).
NTY specializes in working with entrepreneurs at every stage of establishing one of its franchise brands including: Research & Discovery; Business Planning; Store Location & Leasing; Financing; Design & Build-out; Point of Service Software & Systems; Coaching & Managing; and Marketing.
To learn more about franchising a Clothes Mentor — or about NTY Franchise Company and the other lucrative opportunities in upscale resale franchising — explore our main page or feel free to give us a call (952)-923-1223

Clothes Mentor Opens First Location in Rochester Hills, Michigan

(MINNETONKA, Minn.) – Clothes Mentor, a national women’s resale clothing franchise headquartered in Minneapolis, Minnesota, recently opened their third location in Michigan and 144th store in the United States, continuing their successful run of new store openings since the brand launched in 2006.

Clothes Mentor of Rochester Hills, Michigan (1180 S. Rochester Rd, Rochester Hills, MI 48307) opened for business on March 15, 2018, in a 3,975-square-foot location with 2,987 square feet of selling space.

“We’re excited to add Clothes Mentor of Rochester Hills, Michigan, to the family,” Chad Olson, Chief Operating Officer of Clothes Mentor’s parent firm, NTY Franchise Company, said. “We’ve had great success in Michigan with our stores in Novi and Portage, so we couldn’t be happier to see a third store open there.”

Franchise owner Carolyn Webb was a corporate vice president of strategic planning for a pharmaceutical wholesale company who decided the time was right for a change. The mother of three knew she wouldn’t be in her corporate job forever, so decided the time was right to explore entrepreneurship.

“Corporate America will quickly hire people half your age at half your salary to do your job, so rather than wait for that to happen, I took charge of my destiny and became a small business owner,” she said.

Resale franchises are enjoying a $17 billion boom that began during the great recession and continues today as consumers flock to stores like Clothes Mentor to buy and sell their gently used women’s fashion. Since 2017, Clothes Mentor has successfully recycled more than 42 million items of mall-brand and designer clothing and paid women more than $180 million for their gently-used items.

To learn more about Clothes Mentor, visit www.clothesmentor.com

To learn more about franchising opportunities for Clothes Mentor, visit www.ntyfranchise.com/clothes-mentor

SMART BUSINESS: Why Women and their Spouses Love NTY Franchise Company’s Business Model

More women than ever are taking their careers into their own hands, by owning and operating a franchise business. According to FranNet, a company that connects people with franchise opportunities, female franchise ownership jumped by 83 percent between 2011 and 2017. For married women, that can mean navigating a new relationship with a spouse who may or may not be active in the daily business operation. Fortunately for women who own an NTY Franchise Company brand, there is a solid business model to help them balance work, family and personal time.

ANGIE AND JEFF GELDERT WORK THE NUMBERS

Fifty-two-year-old Angie Geldert left her long-time teaching career to purchase a Children’s Orchard kids clothing franchise in Murfreesboro, Tennessee, two years ago. She knew she needed a change, and had the luxury of being married to an accountant who could help her keep track of the store’s finances. Angie says the business model of her NTY Franchise Company brand allows her to spend more time with her family, and work with them to grow her new business.

“My daughter is an accounting major and she is the store manager while she continues to study for her degree,” Angie explains. “She’s a great partner.”

Angie also enjoys her new business relationship with her husband, Jeff. “There are different stressors now,” she allows, “but it’s something we have done together.” Jeff does the books for the store, and Angie says he’s always willing to lend a hand whenever she needs it. “He helps with purchases, with storage… and it’s nice to have someone around who can lift more than I can,” she laughs. “We like bouncing ideas off each other.”

Jeff agrees, saying he appreciates how his wife took on the challenge of operating her upscale resale franchise. “It’s great — she’s put a lot of effort into it. At first we were nervous, but we’re much happier now that things are catching on. I’m proud of her; she’s worked very hard.”

And the numbers bear that out: Jeff says the sales growth is ahead of schedule. “We were expecting it to be slow to begin with, but in the middle of last year, sales started to show double-digit increases. We are seeing monthly growth in sales of 17 to 30 percent (over the same period last year).”

THE BARNETTS’ LEAP OF FAITH

When Chris Barnett purchased her Clothes Mentor women’s fashion franchise in Pennsylvania five years ago, she knew it was a leap of faith.  She and her husband Stephen jettisoned their corporate careers and plunged into operating their franchise.  They wanted to have more control over their lives, and teach their values to their 10-year-old daughter, Eliza. They still work long hours, but they’re in charge of their time.

“We are in the store most days, but we are working on the business every day,” Chris said. Still, they are able to spend quality time with their daughter while they work. “Eliza comes into the store every weekend, and two to four times during the week.”

The business model has proved to be a winner for the Barnetts. Just 18 months after opening their store, they bought a second Clothes Mentor franchise. “Having multiple locations allows us to have economy of scale,” Chris says. Even so, she says, they couldn’t have done it without the support they received from the NTY Franchise Company corporate team.

“They give us the tools and as much hand-holding as we need. They have great regional advisors who help us with marketing. What gets scary, though, is… it’s your business, your baby. They give you a strong foundation, but you have to take care of the rest of your house.” With a five-year track record, the Barnetts’ house appears to be in great shape.

THE CHERNEYS’ JOURNEY

Thirty-three-year-old Sadie Cherney earned her master’s degree, married her husband Bill three months later, and moved across the country to open a Clothes Mentor franchise in South Carolina soon afterward. This dynamic duo are also parents of two sons under the age of 3. They now own three Clothes Mentor women’s resale stores, and they credit the NTY Franchise Company business model with helping them achieve career success at a young age.

“The best part is the wealth of data from the point of sales system,” Sadie acknowledges. “They are always crunching numbers and that helps franchise owners. Back-of-the-house data is always available to franchisees. The company is wonderful, supportive and communicative.”

Bill was an English teacher when Sadie opened her first location. A year later, they were starting their family so Bill quit his job to make sure there wasn’t a loss in leadership during Sadie’s maternity leave. Sadie returned to work after the birth of their son, but shortly thereafter, their child suffered a health scare. The NTY Franchise business model made it possible for Sadie to be with their toddler when he needed her most.

“Our two-year-old son was hospitalized last year with a critical illness, and I basically lived at the hospital,” Sadie confides. “The flexibility we have with this company is incredible. It really makes such a difference when you have a crisis. We have built up a team that’s like a family. They’re there when we need them.”

With their son healthy again, Sadie and Bill are focused on raising their boys and growing their business. “To be successful, we have to work closely together. Sometimes it’s challenging, especially if we need our own space after work, but we go home together. What works best for us is that we don’t try to be in charge at the same time,” Sadie chuckles.

“MOORE” SUCCESS IN LITTLE ROCK

The Moore family owns two Clothes Mentor women’s resale clothing franchises and a Children’s Orchard kids clothing franchise in Little Rock, Arkansas. Twenty-nine-year-old Jade Moore runs the stores and feels supported by the NTY Franchise Company business model. It has allowed her 31-year-old husband Turner to pursue his calling as Junior High Pastor at their church.

“He is a humble man who is encouraging and motivating to me,” Jade beams. “He is the greatest at lifting my arms up when I am tired or calming me down when I make a rash decision. I’m blessed to have him as my support.”

Jade appreciates the NTY philosophy of offering high-quality clothing at affordable prices to families in her community. She’s also thrilled that unsold clothing is donated to needy families. “It’s part of a new way of living… allowing less-fortunate parents to say they can give to their children.”

FAMILY-FRIENDLY CONCEPT

The NTY Franchise Company business model works well for all of these female franchisees. The corporate support, with flexibility for local owners, is a winning combination. Franchise owners are able to build a business while staying connected to the people they love. It’s a family-friendly concept that helps working women achieve the balance they crave in their personal and professional lives.

Love Women’s Fashion? Here’s How to Love It Even More!

Love Women’s Fashion? Here’s How to Love It Even More!

You know that feeling when your outfit just works? When every accessory is perfect, the fit is fabulous, and the look is exactly what you want? Women who shop for designer clothing at Clothes Mentor get to experience that feeling every day. The power. The self-confidence. The freedom. Now imagine owning the clothing franchise and being able to work — and shop — in the world’s most amazing closet! For those who have a fancy for clothes, an eye for high style and a heart for helping, owning a women’s clothing franchise like Clothes Mentor may be just the career you’ve been craving.

Let’s get real. This is not your grandmother’s thrift shop, full of castaways that no one wants to wear. NTY Franchise Company brands like Clothes Mentor are highly selective in the items they purchase. Designer clothing. Name brands you know and love. Current fashion, gently-used and in excellent condition. Upscale resale clothing, designed to fit and flatter a variety of shapes and sizes. And the women who own a Clothes Mentor franchise get to live their dream of being on the forefront of fashion, while also helping their community. Every day they make customers look and feel their best, at a price they can afford.

JENNAH ESPOSITO: GETTING PAID TO SHOP

Mansfield, Ohio, is located between Columbus and Cleveland, with the closest big clothing retailers an hour’s drive in either direction. Thirty-year-old Jennah Esposito opened a Clothes Mentor franchise in Mansfield last October. She loves women’s fashion and admits it’s a blast to come to work and be able to shop on the job. She also enjoys helping her customers find upscale clothing without paying mall prices.

“There’s something new coming in every day,” she explains. “When stuff comes in the door, we have our pick of the latest fashion finds. I go to work every day and can basically shop, for myself and my customers. I’m the mannequin dresser and almost every day, people undress the mannequins and buy the entire outfit!”

Jennah says the Clothes Mentor business model makes sense on several levels for the women of Mansfield. “Before these kinds of resale stores,” she wonders, “what did you do with your stuff? The only option was donating to charity.” But with Clothes Mentor, local women can repurpose their gently-used clothing and accessories and sell them to the store. The customer makes money on the sale, and the other shoppers benefit from great fashion at a reduced resale price.

“After our clearance sales,” Jennah continues, “we donate to a specific church that gives the clothes away to people in need in our community. We are helping people who can’t afford retail prices still feel good and look beautiful.”

SADIE CHERNEY: STAYING ON TOP OF TRENDS

For 33-year-old Sadie Cherney, keeping up with what’s current in women’s fashion is part of the joy of owning three Clothes Mentor franchise operations in Greenville, Columbia and Spartanburg, South Carolina. Her staff is very selective in the items they accept, purchasing only 25–30 percent of the items customers bring in for sale. “We always stay on top of trends, so we can help customers find what they want in our store,” she says. “We look for spike trends, we buy with caution, and we don’t accept older items.” She’s proud of the quality of clothing in her stores and admits it’s a problem to keep her own closet from exploding. “No matter what anybody says, you’re always shopping when you’re working,” she laughs.

“For mall retail stores, they normally have one specific look,” Sadie explains. “Our diversity of clothing and accessories can be exciting. We sell designer handbags, footwear, accessories and clothing. The quality is good to great.” This franchise owner knows what she’s talking about — because she studies it for fun, and for profit.

Sadie is driven by data, and says she relies on the corporate NTY Franchise Company team for help in keeping her store on the cutting edge. “They are always crunching numbers and that helps franchise owners,” she says. “If we have a clearance sale, we know what customers said ‘no’ to. We know trends and prices. It helps us to be ready to adapt to any type of change. The company is wonderful, supportive and communicative.” It’s the perfect place for a fashion-forward woman like Sadie to work and help others live their fashion fantasies!

Sadie offers her customers the Clothes Mentor Personal Shopper Program at all three locations. The service allows shoppers to fill in their personal details on the franchise’s website. The Personal Shopper then sets an appointment and has items ready for the customer to try on when she arrives. The program is free of charge and there’s no obligation for customers to purchase anything.

CHRIS BARNETT: HELPING WOMEN LOVE THEIR BODIES

The Personal Shopper Programs in Springfield and Westchester, Pennsylvania, are a point of pride for Clothes Mentor owner Chris Barnett. She hires fashion and merchandising grads from local universities who like nothing more than finding a perfect outfit for a customer. “So often women feel bad about their bodies, when they really only need to feel bad about the way the clothes fit,” Chris believes. “Our Personal Shoppers’ mission is to show women how beautiful they are by finding clothes that fit them the best.”

Chris says her mission is accomplished when a customer can run a full cycle at her Clothes Mentor store. “A woman can buy the business suit and Coach briefcase she needs to land a great job,” she adds, “then purchase her work wardrobe, and sell back the items she doesn’t wear very often.” She says Clothes Mentor allows a woman to always have what she needs when she needs it, and what she wants when she wants it.

Chris also appreciates the eco-friendliness of the Clothes Mentor franchise concept. It’s sustainable, not fast-fashion. “You purchase an item, but when you tire of it, you sell it,” she offers. “In our store, we also have three places for our customers to donate clothing they are unable to sell. We then take donations to a local church that distributes the clothing to homeless shelters.” Her stores hold fundraisers on site and participate in “retail therapy parties” for birthdays and other functions.

LIVE YOUR PASSION FOR FASHION EVERY DAY

Owning a Clothes Mentor franchise has given all three of these women a chance to surround themselves with beauty and inspiration. They see the high-end designer fashions that make their way into the store. They chat with customers and share expertise on new trends and timeless styles. They help women make wise fashion choices that fit within their family’s budget. And they all love what they do.

“Our staff is friendly, and customers love that there are so many sizes and styles,” says Jennah Esposito of her Ohio Clothes Mentor business. Once people discover her store, “they say it’s so beautiful and it’s so nice to have it in our town.”

For Jennah, Sadie and Chris, owning a Clothes Mentor franchise is more than a great investment. It’s a way to live their passion and help other women. And in case you’re wondering, the side benefit of working in the world’s best closet allows them to keep their own closets stocked, season after season, with fabulous clothes they purchased on the job.

Why Women Franchise Owners Left Their Careers to Buy a Resale Clothing Franchise

WHY WOMEN FRANCHISE OWNERS LEFT THEIR CAREERS TO BUY A RESALE CLOTHING FRANCHISE

It takes more than a leap of faith for a woman to jettison her former career and buy a clothing franchise. It takes guts, hard work, and the right timing. But it happens, and the rewards can be far greater than the risk. Several NTY Franchise company franchise owners have followed their passion to a career in women’s fashion, and they’ve never looked back.

Pharmaceuticals to Fashion

Chris Barnett is nearly 50 and had worked for years as a partner in a law firm before becoming an executive director at a large pharmaceutical company. Five years ago, however, she and her attorney husband Stephen decided they wanted to do something to show their daughter what they truly believe in, and it wasn’t the corporate grind.

“We believe in women helping women,” Chris explains, so they purchased their first Clothes Mentor women’s clothing franchise in Pennsylvania. “Our franchise enables our 10-year-old daughter (Eliza) to see women cheering each other on.” The business model intrigued them: The store purchases designer clothing and upscale fashion from local women, then re-sells the items at a fraction of retail prices to customers who appreciate the value. Everyone wins.

The couple knew they wanted to teach Eliza the value of a dollar. To do that, they show her how women save money at their store by purchasing gently-used, name brand clothing at a much lower cost than they’d pay at the mall. The Barnett’s also enjoy practicing the “mentoring” aspect of their Clothes Mentor franchise. “Stephen is good with development,” Chris says, “and he works with the young team members to help build their portfolios.”

In addition, the couple relies on the mentoring and support they get from NTY corporate directors. In fact, they liked the concept so much, they now own two Clothes Mentor women’s clothing franchises, in Westchester and Springfield, Pennsylvania.

From the Classroom to the Dressing Room

While Chris and Stephen left high-powered careers, 52-year-old Angie Geldert gave up a 20-plus year career as an elementary school teacher to purchase a Children’s Orchard kids’ clothing franchise in Murfreesboro, Tennessee. She and her accountant husband Jeff had moved from Minnesota, where the education system was much different. After teaching for a year in her new town, she felt ineffective in the classroom and needed a change.

“I wanted to still be part of the community, help people, and still have contact with families and kids,” she recalls. The Children’s Orchard franchise was the perfect fit, offering her the connections she craved, as well as opportunities for a first-time franchise company owner to learn quickly.

“A competitor moved in down the road and opened two weeks ahead of us,” Angie says, “so there were unforeseen challenges at startup.” She had to figure out a way to stand out in her town’s growing children’s upscale resale market. She credits the NTY corporate structure with helping her feel supported at every turn. “Through my discovery process, other ladies were so willing to give me information to help start and grow the business,” she remembers. “I felt we had a safety net, from corporate and from other franchise owners.” She also doubled down on customer service and educating her staff, which has paid off in impressive sales growth each month.

It’s truly a family business, with Jeff doing the books and Angie and her college-age daughter running the store. Angie sets the schedule, giving her the flexibility, she needs as a busy working mom. She is available to drive her daughter to doctor’s appointments and has time to shop for groceries and hobnob with customers she runs into in town. She believes opening the Children’s Orchard franchise has helped her family acclimate to their new neighborhood — and become a valuable part of the Murfreesboro community.

Mom and Mentor   

For 29-year-old Jade Moore, graduating from a bible college eight years ago brought about an epiphany that led her to purchase a Clothes Mentor franchise. She thought she would become a church staff member, but a visit to a resale clothing store prompted her to take a totally different career path.

“I saw the opportunity to own this franchise as a blessing,” Jade confesses. “We wanted to fulfill a need for a resale store in our area.” She and her mother loved the concept of bringing upscale and designer fashions to Little Rock, Arkansas. Her parents helped her with her initial investment, but Jade’s hard work and perseverance made the business a success. So, what’s her secret? “We buy for every type of customer: business women, stay-at-home moms, plus-size and even pregnant women.” That’s a policy Jade herself appreciates; because this mother of three is expecting her fourth child in a few months — and yes, she’s a Clothes Mentor customer!

The NTY corporate philosophy has an even deeper meaning for Jade. “Clothes Mentor helps support the woman who is comfortable in her current body,” she explains, “and those going through transitions such as a weight loss journey.” It’s that positive reinforcement for all women, plus a dedication to staying on the cutting edge of fashion, that keeps her excited about coming to work.

Jade is confident her staff doesn’t miss out on any type of style, even though Little Rock has not yet attracted large, big-name boutiques. “We don’t have big designer stores like Chanel or Louis Vuitton,” she says. “But when we do get those kinds of high-end items in the store, it’s a serious treat for our customers!” She says her recurring social media bursts and great word-of-mouth advertising keep her customers apprised of every exciting new arrival. They get designer fashions at resale prices, and those higher-end items often sell quickly.

Despite her early success as a Clothes Mentor owner, this multi-tasking mom hesitated when her father suggested she purchase a Children’s Orchard franchise for Little Rock. She worried she might not have the time and energy to devote to two business while she and her husband were raising their young family. “But we got a great location right next to Clothes Mentor and it’s great for me and my children” she admits. She opened her kids’ resale franchise in April of 2017 and is excited to see the items customers bring in for purchase. The Moore’s had sold all of their baby items after their youngest turned two. Now, Jade can purchase everything she needs, gently-used, for her new baby. And best of all, she says, she can sell back all of the clothes, toys and gear to Children’s Orchard when she no longer needs them!

Jade, Angie and Chris come from diverse backgrounds, but they all share a love for their new career in upscale resale. Each woman followed a dream to fashion a balanced life for her family and help her community in the process. Each works hard to keep her store running smoothly. And each one says she’s happy she made the choice to leave her past job behind and create an exciting future with her NTY Franchise business.

Owning an Upscale Resale Store is Smart Business. Here’s Why.

OWNING AN UPSCALE RESALE STORE IS SMART BUSINESS. HERE’S WHY.

While many traditional brick and mortar retailers continue to struggle, the upscale resale industry is booming. Consumers seek out resale to both shop and sell their gently-used stuff and entrepreneurs are cashing in on this growing trend.

A lot has changed over the years leading to this evolution; including the high-return, lucrative profit opportunities upscale resale can provide entrepreneurs now and well into the future.

WHY IS UPSCALE RESALE SMART BUSINESS?

TIGHTER CONSUMER BUDGETS

According to latest data from the Bureau of Labor Statistics, the typical U.S. household now spends about 20 percent of their annual budget outlays on health care, personal insurance, life insurance, pension-like products and social security. This is at a time when they are spending a disproportionate amount of their disposable income on communications, related technology and entertainment/experiences. Just consider what we spend on wireless, cable, internet and smartphone payments each month. Family budgets are stretched  leaving less ability to spend on full-price fashion and even full-price electronics — including our smartphones we love so much. And, the growing desire and focus on spending on experiences; such as vacations, amusement parks, salons, etc. only amplifies this crowding-out dynamic.

CULTURE CHANGE

While having less money to spend on full-price items, consumers have grown accustomed to opportunistically monetizing value for the items they no longer need. Both of these trends play right into the upscale resale industry. Whether out of necessity or not, it has become widely acceptable – and in fact often socially admirable and popular — to purchase and sell secondhand items such as clothing, electronics and household items/wares. While thrift shops have always provided this service on the low-end, the trend seemed to evolve more mainstream with the dawn of eBay. Now, it has accelerated and is moving into the high-end with upscale resale. Everybody wants in to buy stuff, sell stuff, and enjoy the thrill of the experience. This is best exhibited by Clothes Mentor, the highly successful upscale resale clothing franchise, a national franchise in the NTY Franchise Company Family of Brands. Clothes Mentor has grown from two stores (in one state) in 2006; to 145 stores (in 42 states) in 2018 — with many more in development. This upscale resale cultural evolution is booming with no signs of slowing down.

LOVE OF HUNT

Whether on eBay or at Costco, Marshalls, Ross Stores, etc. consumers have grown to love a good hunt for deals. More recently though, as a result of rapid store count growth, the selection, quality and value of merchandise at many discount retailers has waned; leaving fewer opportunities to feel satisfied finding that treasure. With a wide variety and rapidly evolving inventory of all types of unique, locally-curated brands at attractive prices, upscale resale stores provide the ultimate treasure hunt satisfaction.

LOVE OF CASH

One thing consumers appreciate more than the love of hunt is the love of cash. Upscale resale stores provide cash on the spot for items they accept from customers — another key driver of their growing popularity. This is not only good for the consumer, but also for the store owner. Initial investment is lower since there are no big, risky long-lead inventory buys (or large working capital requirements) that come along with them. Fully in control of the type, timing and level of merchandise buys from customers, the upscale resale store owners can dynamically and daily control inventory cost and cash management as they see fit.

Importantly, as James Wollman (VP of Franchising at NTY Franchise Company) notes, “Our franchises buy and sell the YES votes of what people like in fashion, electronics and other household items; we don’t deal in the NO’s that are the primary inventory of most other major discount stores.” This all results in much smarter inventory, higher inventory turnover, enhanced budgeting and working capital flexibility, and most importantly, gross profit cash margins of roughly 60 percent — well above the industry average.

PRESTIGE IN REACH

While fashion and trends change all the time, most consumers still love to have a few prestigious or conspicuously flashy items of clothing; while typically priding themselves on nameplate laptops, smartphones, headphones, etc. But in today’s economy, some top name brands are simply out of reach for many. This is the case even at discount retailers where discounts are not as great as in the past from rising product-sourcing costs — particularly freight and shipping. Upscale resale stores are not exposed to these unruly costs and provide all consumers with the opportunity to get that prestige product and feel proud and satisfied as a result.

MILLENNIALS

Often well educated, but with less money at their disposal, millennials don’t enjoy paying full price for retail but still enjoy the hunt of shopping. They typically pride themselves on bargains; especially if it will yield an environmentally friendly outcome.

Generally cash-strapped, many millennials are still saving for their own place to call home and are being encouraged to save more aggressively now for retirement. By 2020, they will represent roughly one-third of the adult population. This is a great long-term demographic trend for the upscale resale industry to leverage. This trend is expected to continue long-term as millennials’ children are brought up in — and at an early age becoming well accustomed to — the resale lifestyle.

ENVIRONMENTALLY FRIENDLY 

You may not think much about this, but a tremendous amount of global resources — such as energy, minerals, chemicals and water — are used to make a single item of clothing, electronic gadget, or household item. According to several estimates, it can take up to 1,000 gallons of water to grow the cotton for — and then produce, a single pair of jeans. A t-shirt can require up to several hundred gallons. This is why global clothing brands are now focusing so much on sustainable apparel.

The resources used to create products not only include the raw materials, design and production expense; but also packaging, shipping and marketing. A lot of energy is also used in collection and disposal. Resale provides a second or third lease on life to millions of products annually; which is not just good for the environment — it’s great. As just one example of how profound this can be, since 2007 Clothes Mentor alone has recycled more than 42 million items of mall brand and designer clothing, and paid women more than $180 million in cash for gently-used items. Importantly, while millennials are most known for appreciating environmentally friendly consumerism such as this, going green is an ongoing trend still gaining traction among all generations.

COMMUNITY FRIENDLY

Upscale resale is good for local communities. They encourage locals to keep their closets and residences uncluttered and fresh. With great values, they provide much-needed flexibility for local families’ budgets. With regular customer buzz, the shopping flow to the area benefits other businesses and the local tax base. Moreover, store owners and key employees get to know their regular clientele — establishing relationships that last for years. “Fashion is Fun,” proclaimed NTY’s James Wollman when describing how owning an upscale resale franchise can be more enjoyable on a daily basis than many other franchise concepts like eateries. While that may be the case, what’s most enjoyable is the multi-faceted annuity flow of business (and high return on investment) that can result from this unique communal retail activity.

EFFECTIVELY CHARITABLE

When upscale resellers are not successful selling items in a certain amount of time, they typically donate them to charity and are able to monetize the donation as a business deduction. While this is typically a very small percentage of the overall inventory turn, it is a win-win for those less fortunate and for the franchise owner seeking to maximize returns.

PROVEN BUSINESS MODELS

In the past, starting your own resale business without any infrastructure or support network was a fairly risky and daunting task. However, today with the proven business models and techniques of a leading franchise partner, the heavy lifting has already been done and the road to high-return success well-paved. With over one hundred years of collective upscale resale experience; and five successful major brands under its belt, NTY (New to You) Franchise Company is an ideal partner to get you fully up, running, and remaining on the path to high-returns success.

You may ask yourself, what makes the NTY business model so successful? Beyond a century of collective franchising experience and among a host of key factors is a serious focus on: 1) Bright, clean and fresh-aired stores; 2) Smart store layouts; 3) State-of-the-art inventory managing, pricing and point of sale cloud-based software systems; and 4) a firm grasp on all the “big data” needed to make wise purchase and sell decisions throughout the day — every day.

NTY FRANCHISE COMPANY AT A GLANCE

Founded in 2006 and Located in Minnetonka, Minnesota, NTY Franchise Company is a pioneering and highly-experienced force in the rapidly growing category of upscale resale retailing. It is the umbrella organization for four proven national franchise brands: Children’s Orchard (kids clothing franchise); Clothes Mentor (women’s designer clothing franchise); Device Pitstop (electronics repair and resale franchise); and NTY Clothing Exchange (teens and young adults clothing franchise).

NTY Franchise Company specializes in working with entrepreneurs at every stage of establishing one of these five successful upscale resale branded concepts including: Research and Discovery; Business Planning; Store Location and Leasing; Financing; Design and Build-out; Point of Service Software and Systems; Coaching and Managing; and Marketing.

To learn more about NTY Franchise Company — and the lucrative opportunities in upscale resale franchising — explore our main page or feel free to just give us a call! (952)-923-1223