Investments

Children;s Orchard sells gently used name-brand kids
clothing, shoes, accessories, toys and accessories for up to
70% off of original retail prices

Investment

What does it cost?

The graphic below shows the average net profit, store sales and more from our top-performing stores, as reported in Item 19 of the Clothes Mentor Franchise Disclosure Document (FDD).

Initial investment range $174,700 to $275,500*

Average store sales $327,260**

Average top-performing sales $481,132***

* $174,700 to $275,500 is the estimated initial investment range for the lease option amount option #2 listed in the Franchise Disclosure Document dated April 12, 2019.

**$327,260 is the average net sales of the 24 stores included in the Children’s Orchard® stores in operation for the entire calendar year ended December 31, 2018. Of the 24 stores included in the average net sales of all stores, 10 stores (41%) met or exceeded the average net sales. There is no assurance, however, that you will do as well. See Item 19 of the Clothes Mentor® Franchise Disclosure Document dated April 12, 2019 for more information.

***$481,132 is the average net sales of the 6 stores included in the top 25% of Children’s Orchard® stores in operation for the entire calendar year ended December 31, 2018. Of the 6 stores included in the average net sales for the top 25% of all stores, 3 stores (50%) met or exceeded the average net sales. There is no assurance, however, that you will do as well. See Item 19 of the Clothes Mentor® Franchise Disclosure Document dated April 12, 2019 for more information.


Initial investment

The charts below show the approximate dollar amounts you need to get the doors open, have a working capital reserve, get stocked with inventory and be ready for customers.

Estimated Range:

Estimated Range:
Low End Approximately$174,700*
High End Approximately$275,500*

While it’s likely that most stores will land in the targeted range listed above, it’s also dependent upon a number of variables. Further detailed information is outlined in our Franchise Disclosure Document (FDD). To get a copy of this document, please contact your Children’s Orchard franchise representative.

Type of ExpendituresPurchase Option AmountLease Option Amount*
Initial Franchise Fee$20,000 – $25,000$20,000 – $25,000
Leasehold Improvements$21,000 – $50,000$21,000 – $50,000
Signs$5,000 – $9,000$500 – $1,000
Fixtures$40,000 – $55,000$15,000 – $20,000
Proprietary Software and POS$13,500$5,700 – $10,000
Inventory$30,000 – $45,000$30,000 – $45,000
Deposits, Business Licenses and Permits$7,000 – $15,000$7,000 – $15,000
Legal and Accounting$0 – $4,000$0 – $4,000
Security$2,500 – $4,500$0 – $500
Travel Expenses to Attend Training$4,500 – $9,000$4,500 – $9,000
Pre-opening Labor Expenses$10,000 – $15,000$10,000 – $15,000
Grand Opening Advertising$12,000 – $16,000$12,000 – $16,000
Miscellaneous Pre-opening Expenses$14,000 – $20,000$14,000 – $20,000
Rent – 3 Months$20,000 – $25,000$20,000 – $25,000
Additional Funds – 3 Months$15,000 – $20,000$15,000 – $20,000
Total$214,500 – $326,000$174,700 – $275,500

Low fees

What’s our motivation to provide you our ever-improving tools, training, know-how and on-going support long after you’ve opened your business?

Royalty

Like most franchise companies, it’s how we get paid to do all that we do in supporting you in our proven business operating system.

Our Value Proposition

Get the support of a very experienced franchisor at some of the lowest fees in our niche of the industry. So you can build your business and keep more of what you make.

The chart below shows specifically how Children’s Orchard compares to four other top-rated apparel and accessories competitors in the key categories of initial franchise fee and royalty fee. As you can see, our fees are significantly less, and our low royalty fee means Children’s Orchard franchisees keep more of what they make on an ongoing basis.

Children’s Orchard Fees Compared to Similar Franchises
FranchiseInitial Franchise FeeOngoing Royalty
Company A$25,0005%
Company B$35,0005%
Company C$29,5005.5%
Company D$25,0007.5%
Clothes Mentor$25,0004%

In this video, our VP of Franchising walks you through Item 6 of the FDD, covering all fees:

Financing options

Ways to Finance your Children’s Orchard Franchise

Small Business Administration (SBA) Loan:

SBA 7(a) loans are small-business loans that are federally guaranteed by the SBA and issued by banks. SBA loans are without a doubt a popular choice for funding a franchise. The SBA can guarantee up to 85% of loans of $150,000 or less and 75% of loans of more than $150,000. For the issuing bank, this is very attractive because the bank only guarantees a small portion of the entire loan. To further streamline the lending process, Children’s Orchard is a preapproved franchise with the SBA.

If you would like to learn more about SBA loans or obtain a prequalification for your new Children’s Orchard franchise, select one of the lending resources below. This is a very short but popular list that will get you started in your quest for financing your Children’s Orchard franchise.

  • Diamond Financial
  • Apple Pie Capital
  • Benetrends
  • Wells Fargo
Rollover 401(k):

This is a very popular way to fund your new Children’s Orchard franchise. Instead of taking out a traditional loan for your business, you can utilize the money in your 401(k) to fund your new Children’s Orchard business WITHOUT triggering any early withdrawal penalties or taxable distributions. This is accomplished by first establishing a C Corporation, and then you buy private stock shares of that new C Corporation (aka your new Children’s Orchard franchise store) from your 401k funds. These funds then become available to start up your Children’s Orchard store debt free!

Benetrends is a popular company that specializes in this type of funding. If you are interested in learning more about this type of self-financing or to prequalify with Benetrends, simple click the link below to learn more and become preapproved.

  • Diamond Financial
  • Benetrends
Alternative Franchise Lending:

The first type of financing most franchise business seekers turn to is traditional financing from large national banks. Little do they know that many alternative financing opportunities exist and can help them secure the money they need faster and with less hassle. These alternative lending institutions have a wide portfolio of products for franchise seekers that typically do not meet all the requirements larger, more stringent, national banks require. These firms have many creative programs to secure the franchise lending you need. In many cases, this also include SBA loans.

If you are interested in learning more about alternative financing programs or to become preapproved, please select from the one of the lenders below.

  • Diamond Financial
  • Alliance Funding Group
  • Capital Leasing Solutions
Home Equity Loan / Cash Out Refinance:

Tapping into your home equity or performing a cash out refinance of your property is becoming more of a possibility for many franchise seekers as housing values across the country continue to increase in value. This funding source is a way to collateralize the value of your home in order to start your very own Children’s Orchard franchise business. This model is also a way to secure a more stable interest rate than traditional business financing.

Leasing Alternatives:

Leasing is a great option for reducing the cash-down requirement amounts for start-up costs and the down payment amount needed for additional funding of the business. Leasing give you the option to lease up to $50,000 for your fixtures, technology and signs. This lease payment simply becomes a monthly payment termed out over 60 months.

If you would like to learn more about leasing options or to get preapproved contact the lender below.

  • Diamond Financial – Franchise Leasing Division
  • Capital Leasing Solutions
Portfolio Loans:

Portfolio loans allow individuals to borrow up to 80% of the value of their stock, bond and mutual funds. Unlike traditional loans, this type of credit is brokered out as an interest-only payment. These types of loans are collateralized by your portfolio, so you cannot withdraw the funds or fall below the 80 percent loan-to-value ratio in the account. Contact your financial advisor for more details.

Unsecured Loans:

Unsecured loans are typically referred to as “signature loans”. This type of lending is extended to a borrower based on their credit history and requires no collateralization. To qualify for these types of loans, a borrower typically needs a very high credit score, no derogatory credit history, and is using a fractional percentage of current credit accounts such as credit cards and other lines of credit.

Friends and Family:

This common source of business financing allow friends and family to make a monetary investment in your business, typically for an equity position or a fixed rate of return. These individuals know you are reliable and competent and see the opportunity to make money investing in you and a Children’s Orchard franchise.

Cash:

All cash funding is an option. This is very straight forward and self-explanatory. The ability to fund your franchise with all cash is a funding option for those investors with larger amounts of capital to deploy.

Watch this video to learn details about NTY’s recommended financing option through Wells Fargo from our VP of Franchising:

FDD highlights

An important step in your research is reviewing the Franchise Disclosure Document (FDD). It’s filled with a lot of useful information, but it can often be a bit overwhelming. That’s why we’ve nailed down a few highlights for you here:

First, check out our short videos. NTY’s Vice President of Franchising James Wollman will walk you through the highlights.

Check out even more highlights from the NTY Franchise Disclosure Document below.

Items 1 and 2

Background

We have been involved in resale retail franchising this type of business model for more than 25+ years.

Item 4

No Bankruptcies

We have been very wise in our financial investments.

Items 5

Initial Fee

Some of the lowest in the franchise business.

Item 6

Other Fees

An all-encompassing overview of the previous fouraThese are fees you will see in the operation of your business. You can view the breakdown on the chart listed in Item 6 in the FDD. days and putting what you’ve learned into action.

Item 7

Estimated Initial Fees

These are the fees to open your store, they can vary from store to store or state to state. This is the estimated amount to get the “doors open for business.” There is a chart with the breakdown of the fees listed in Item 7. We also have a relationship with Wells Fargo, which will help with setting up your financing. We are also listed on the SBA registry, which makes it easier to work with all SBA approved banks.

Item 11

Franchisor Assistance

This is an explanation of the assistance we as the franchisor will give to you. This is the minimum you will receive from us, hopefully, you have seen today that we have much more for you to use in the development of your business.

Item 12

Protected Territory

Describes your protected market, this area will be exclusive to you as a franchised location and will be outlined in the “Exhibit A” portion of the Franchise Agreement. We will go through a mapping session to layout your territory with you before the Franchise Agreement is prepared.

Item 17

Renewal

The term of our Franchise Agreement is 10 years, which you are able to renew as stated in this item.

Item 19

Financial Performance Representations

Everyone wants to look at this, as it explains our sales history for our franchise locations. Make sure you read the explanation at the top of Item 19, as it will explain what information was used in putting the chart together.

Item 7 & Exhibit A

Financial Statements

This represents our franchise brands, not individual stores. We’ve invested a lot in staff, tools, and technology in advance of our brand growth.

Exhibit B

Franchise Agreement

Everyone wants to look at this, as it explains our sales history for our franchise locations. Make sure you read the explanation at the top of Item 19, as it will explain what information was used in putting the chart together.

Exhibit C

List of Franchised Stores

This is where you’ll find locations and contact information for all of our stores. You should make phone calls to validate our information.

Exhibit I

Receipt

A signed receipt is our proof that we provided you with the FDD, which is required by the Federal Trade Commission.

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