How to Buy a Dollar Store Franchise

There's a certain charm in dollar stores and browsing the aisles of discount goods. It's everything you could need (and some stuff you don't) at a price almost anyone can afford. When it comes down to it, dollar stores are just fun — and they're also lucrative. While you might not be able to open a Dollar Tree franchise, you can franchise a dollar store for as little as a $63,000 upfront investment.

Choose Your 99 Cents Store Franchise

Before you can open a 99 cents store franchise, you need to pick which franchise you’re actually going to open. Many hopeful franchise dollar store owners initially seek to capitalize on the growing success of retailers like Dollar Tree and Family Dollar. Sadly, opening a Dollar Tree franchise is impossible because Dollar Tree franchises don’t exist. The store is solely operated from the company’s headquarters in Chesapeake, Virginia. Similarly, Family Dollar and Dollar General are also company-owned. Nonetheless, there are plenty of other dollar stores to choose from.

Though some of the most recognizable names in the dollar-store business are off the table, there are still a number of dollar stores that offer franchising opportunities. This includes Dollar Store Services, which claims to be the largest developer of dollar stores in the country, Just-A-Buck, Dollar Discount Store of America and Liberty Dollar Stores. The latter doesn’t even require a franchise fee. Pick your franchise and fill out the application, but be prepared to make the initial investment once your application is accepted.

Make the Initial Investment

You’re going to need some cash to franchise a dollar store. Most 99 cents store franchises have a required franchise fee that generally costs between $20,000 and $50,000. In exchange for the franchise fee, you’ll get access to a trusted brand name with built-in customers. The other costs of opening a dollar store franchise include:

  • Leasing property
  • Office equipment
  • Signs and fixtures
  • Advertisements and promotions
  • Inventory
  • Salaries for workers
  • Cost of insurance
  • Ongoing royalties

The cost of a franchise dollar store depends on the franchise. Just-A-Buck is one of the most expensive and typically requires a $100,000 to $300,000 investment, excluding the whopping $50,000 franchise fee. You’ll also have to sign a 10-year contract, which means that even if your dollar store is failing, you have to see it through.

Dollar Discount Store of America is slightly cheaper, involving an estimated $75,000 to $150,000 in startup costs, and Liberty Dollar Store is the cheapest, with a minimum of $63,900 required to open up a business. The main plus of Liberty Dollar is that it’s scalable, and the cost is reflected in the square footage. You can spend as much as $200,000 to open a larger franchise with the opportunity for greater profits, but it’s not a requirement if you can’t come up with the cash.

Pick Your Location

Location is a huge factor in the success of a franchise dollar store; however, not every 99 cent store franchise operates in every location. First, find a good area to open a franchise dollar store. You’ll want to find somewhere that doesn’t have a lot of competition but has a need. Consider setting up shop in a lower-income area, where people are looking to save a buck. Affluent areas tend to value quality over price point, which means they won't typically be looking to pick up discounted kitchenware or knickknacks at a Dollar General.

Once you find a perfect location, research which franchises actually operate in that location and make your choice accordingly.

Handle the Business End

Once you’ve signed on to create a 99 cents store franchise and have the actual building leased and ready to go, it’s time to start buying up your inventory and hiring employees. You’ll also need to talk to an insurance broker about business insurance because you can’t get an actual business license without it. Most commonly, businesses of this nature require general liability insurance and insurances like disability and workman’s compensation for employees.

Advertise Your Grand Opening

If no one knows your franchise dollar store exists, they’re not going to buy anything. It’s important to make an event out of your grand opening. Consider placing ads in local newspapers or on town bulletin boards. Also register your business with Yelp and Google and encourage your customers to leave positive reviews. Services like Facebook and Instagram provide ad platforms that help retailers get noticed for smaller fees than, say, a TV commercial or magazine ad (though, if you have the cash, go for that too!).

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About the Author

Mariel Loveland is a small business owner, content strategist and writer from New Jersey. Throughout her career, she's worked with numerous startups creating content to help small business owners bridge the gap between technology and sales. Her work has been featured in publications like Business Insider and Vice.