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Play N Trade Sells 200 Video Game Store Franchises in 10 Months

This is an interesting “full-service” approach to gaming. They have a “try before you buy” policy, do game console repairs, in-house tournaments, and sell all the gear a gamer needs. Selling 200 stores in 10 months (1,000 store goal in 3 years) is a dangerously fast – how can a young franchisor adequately service so many franchisees? I’m skeptical.

Update March 2, 2007:

Great comment by a reader:

I think this concept will have legs for another 5 years, but then it will crumble. All the new game consoles and obviously the PC games are played in group mode online. Downloading patches and extended game mods are all the rage, so it only make sense to download the original game too (which PC users often do now). So, Play N Trade will live a short life much like video rental and trading.

Of all business to invest in, why would you choose a product that would obviously be replaced in the near term? I’d prefer a high-end game center because many kids can’t afford the $1,500 – $3,000 for top-of-the-line gaming PCs and video cards.

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31 comments
Noob
Noob

This is a little off track. One of you mentioned bizbuysell, with which I'm pretty familiar. I have been looking into the casino style "adult arcades" that are for sale here in Florida. They're all mom and pop type places (no franchisees) and the model seems solid. There is legal precedent already for how to operate and avoiding prosecution as an illegal gambling establishment. However, I always wonder why they're offered at such high cap rates, i.e. casflow: 110k/asking price: 150k. Anyone have any insight?

wamd
wamd

Well, noone can speak up their minds about this business anymore, 1000+ postings by Play N Trade store owners were deleted by unhappyfranchisee.com because of the pressure play n trade corporate put on google and unhappyfranchisee.com. You could have read very valuable info about how these stores are dropping like flies and how owners were complaining, but these pages do not work anymore, oh well the scam continues.

CPK
CPK

I have dug deep into the PNT Play N Trade franchise. I have called Area Developers and Franchise owners and have had lengthy discussions with management. I beleive the PNT model simply grew so big so fast that the original people could not deal with the growth. I think Larry Plotnick is a very capable individual and that they have great bench strength to get through this critical time in their growth phase. It does seem to be true that franchises are strugling, but remember most of the 240 stores have only been open on after 8-14 months. Check any franchise company out there and they will tell you not to expect to make money in your 1st year. 2nd this is the worst economic crisis since the great depression. I beleive PNT has got a lot of the systems you need in to be successfull in place right now. However, even 6 months ago many of these things were not present. To buy a PNT you must 1st beleive this market will continue to grow at double digits and 2nd you must beleive that the organizational structure of this company will evolve with the growing pains and chalenges of the industry to continue to be the best alternative to Gamestop. If you look out there, there are not a lot of RETIAL franchises and most are food franchises. A food franchise is a complely different model to use, compair a retail model if you find one that is interesting to compair the training, support fee/royalty struture etc to. All the best to all of you.

Why would you buy this franchise?
Why would you buy this franchise?

I don't know how anyone can consider this franchise if they have actually asked pertinent questions up front. I talked with them at a franchise expo. I am not a business mogul but one key business strategy I kept hearing about was the used games that the store will buy and then turn around and sell them for a large profit. Okay, I can understand that could have some potential. But I asked them about the actual realized profit per unit (game) and was told it was around 5%. 5%! I mean, I can understand lower profit percentages based upon pricing, afterall a realator usually only makes about 1.5 % per sale, of course they are dealing in listings that are normally $100,000 up to Millions. But folks, , making $3 on a game is not going to pay for the bills in a retail business. Sure, if you were dealing in thousands of units that could be good but not in the tens of units sales. Besides, after a few months and after you have bought all those used games you will have exactly what all the GameStops have now, a wall full of games that no one wants.

michael webster
michael webster

Here is what the Commissioner actually found: "The Commissioner finds that beginning on or about June 1, 2006, Play N Trade Franchise, Inc., Yuvi Shmul, and Thomas C. Bozarth violated multiple provisions of the California Franchise Investment Law, including but not limited to Corporations Code sections 31110, 31200, and 31123, as set forth in greater detail herein. Pursuant to section 31406 of the Corporations Code, Play N Trade Franchise, Inc., Yuvi Shmul, and Thomas C. Bozarth are hereby ordered to desist and refrain from: (a) Making unregistered, non-exempt offers to sell a franchise in violation of section 31110; (b) Making material misstatements or omissions in a franchise registration application filed with the Commissioner in violation of section 31200; and, (c) Failing to notify the Commissioner of material changes made to the terms of the registered franchise offer in violation of section 31123." This is not a preliminary order, it is a final order subject to appeal. Mr. Plotnick is simply wrong, and he should have his attorney's prepare his statements.

CEO Play N Trade, it was only a iceberg we hit, no
CEO Play N Trade, it was only a iceberg we hit, no

Larry Plotnick on April 24th, 2009 9:21 pm As the President and CEO of Play N Trade I feel it is important to be clear that the above headline is misleading and incorrect. It is very unfortunate that http://www.unhappyfranchisee.com would state that Play N Trade has been found guilty of anything, when nothing could be further from the truth. Play N Trade has not been found guilty of any wrong doing, and that the citation highlighted is a preliminary order that is not final. We are working closely with our Attorneys and the California Department of Corporations to clarify and settle this matter quickly and with the least amount of impact to our franchisees. This preliminary order only impacts the state of California, and will not be finalized until the completion of a negotiation or appeals process. Play N Trade Corporation takes this and all legal matters very seriously, and are and will cooperate fully with all state agencies. We will be communicating with our current and future franchisees appropriately as facts become available. Sincerely, Larry Plotnick President and CEO Play N Trade, Inc.

Play N Trade Video Games Brandon, FL
Play N Trade Video Games Brandon, FL

Come see us at 2030 Badlands Drive, Brandon, FL 813-315-9895. Open 7 days. You'll love the store. Try any game, new or used before you buy. We also do disc and console repairs, games for grades (10% discount for "A" on report card, up to 4), tournaments, great sales, great staff. Hope to see you!

Play N Trade Video Games Brandon, FL
Play N Trade Video Games Brandon, FL

I own a Play N Trade in Brandon, FL. We do struggle but we have only been open since 11/1/08. It has a lot of potential and offers and with more and more stores opening, our power in the market is growing. Most everyone that visits our store say they won't go back to GameStop. I'm sure they will if we don't have something they need, but....we have everything anyone could want! :D)

Justin
Justin

Hi, could you please provide an update on how your investment is doing? It has been a few years since your posting here. I am extremely interested in how it's coming along. Please let me know!

Jim
Jim

Seems like the Disc Replay people are all over the Play n Trade franchise. In my research, I also see posters from their company bashing PNT and then plugging their company. This has happened every web site that talked about PnT. I'm guessing a lot of this bashing could be from the Disc Replay people or other competitors. I own another franchise with a different market and we do seek opportunities to bash the competition. It's nothing new. I would suggest calling as many owners as you can get ahold of and visiting some stores. See a. how musch it costs to run the store each month and b. what revenure can you expect. Keep asking! Make up a Q&A sheet before calling so you don't sound unorganized. I hope this helps and I wouldn't bank on the infomration listed here as being very accurate. Getting a good idea on a company is not going to come from sitting on the couch surfering the internet. Sorry, just being honest with you.

Anonymous
Anonymous

Over 80% of Plan N trade franchisees are failing. I was one of them. Also, I'm one of many who is in the process of litigating against the franchisor. Many others are on their way. The business model is flawed. It's not profitable. 1 in every 10 franchisees is barely making it. The rest are all losing money.

Looking to franchise
Looking to franchise

[quote comment="256271"]Play N Trade is a scam. Many of the employees that are listed on their website have been fired. The company is falling appart based upon so many pending lawsuits and store closings.[/quote] Joe, how do you know about these "pending lawsuits and store closings"? I've been researching PNT and haven't found any evidence of this. Thanks.

joe breckenridge
joe breckenridge

Play N Trade is a scam. Many of the employees that are listed on their website have been fired. The company is falling appart based upon so many pending lawsuits and store closings.

anonymous
anonymous

[quote comment="43218"][quote comment="42956"][quote comment="17218"]we are debating whether to open a play n trade or a quiznos, quiznos is being offered at 50,000 price is attractive and play n trade is 150,00 to open, just doing research what do yall know about both of these franchises[/quote] Man, I don't know -- I've (had) also been considering taking the Play N Trade route but in my research I keep reading about stores closing. Dallas, Las Vegas, Farmington, North Carolina, 3 in Colorado Springs -- out of only 60 or so stores open? Check this out: http://www.cheapassgamer.com/forums/showthread.php?p=3387721#post3387721 I used to work in the QSR business and this is reminding me of how Boston Market was growing so explosively through focusing on selling new locations, not honing a business model that made money for the owners and within a short time the thing caved in. It was like a Panzi scheme and I'm starting to wonder if Play N Trade isn't playing the same game -- that the owners get in cheap but earn no money while the franchisor banks.[/quote] To me the Play N Trade closings aren't as big a deal as the huge opportunity that's slowly getting out about GameStop being about to start selling franchises. Read here: http://www.franchisepundit.com/forums/index.php/topic,177.0.html If choosing between a vulnerable new concept coming to the industry late in the game, with very small purchasing power in the industry (I'm in the business and trust me scale means everything for costs) versus the established, leading concept with 5K GameStop locations of buying power behind it, I'd pick buying a GameStop any day. I've watched a lot of others struggle to compete but you can't catch up to GameStop's volume cost advantages.[/quote] If you read GameStop's press at all you would know they have no intention of Franchising. Even if they did, they still couldn't offer what Play N Trade does.

anonymous
anonymous

[quote comment="2921"]I think this concept will have legs for another 5 years, but then it will crumble. All the new game consoles and obviously the PC games are played in group mode online. Downloading patches and extended game mods are all the rage, so it only make sense to download the original game too (which PC users often do now). So, Play N Trade will live a short life much like video rental and trading. Of all business to invest in, why would you choose a product that would obviously be replaced in the near term? I'd prefer a high-end game center because many kids can't afford the $1,500 - $3,000 for top-of-the-line gaming PCs and video cards.[/quote] If you understood this business at all you would know that less than 30% of gamers are online. Don't you think the publishers know that? Also Gamestops stock is at an all time high, don't you think wallstreet knows more than you moron!

anonymous
anonymous

[quote comment="17218"]we are debating whether to open a play n trade or a quiznos, quiznos is being offered at 50,000 price is attractive and play n trade is 150,00 to open, just doing research what do yall know about both of these franchises[/quote] Look at all the lawsuits quiznos has (a ton) then look at all the suits from franchisees on Play N Trade (0) then you decide!

anonymous
anonymous

[quote comment="43218"][quote comment="42956"][quote comment="17218"]we are debating whether to open a play n trade or a quiznos, quiznos is being offered at 50,000 price is attractive and play n trade is 150,00 to open, just doing research what do yall know about both of these franchises[/quote] Man, I don't know -- I've (had) also been considering taking the Play N Trade route but in my research I keep reading about stores closing. Dallas, Las Vegas, Farmington, North Carolina, 3 in Colorado Springs -- out of only 60 or so stores open? Check this out: http://www.cheapassgamer.com/forums/showthread.php?p=3387721#post3387721 I used to work in the QSR business and this is reminding me of how Boston Market was growing so explosively through focusing on selling new locations, not honing a business model that made money for the owners and within a short time the thing caved in. It was like a Panzi scheme and I'm starting to wonder if Play N Trade isn't playing the same game -- that the owners get in cheap but earn no money while the franchisor banks.[/quote] To me the Play N Trade closings aren't as big a deal as the huge opportunity that's slowly getting out about GameStop being about to start selling franchises. Read here: http://www.franchisepundit.com/forums/index.php/topic,177.0.html If choosing between a vulnerable new concept coming to the industry late in the game, with very small purchasing power in the industry (I'm in the business and trust me scale means everything for costs) versus the established, leading concept with 5K GameStop locations of buying power behind it, I'd pick buying a GameStop any day. I've watched a lot of others struggle to compete but you can't catch up to GameStop's volume cost advantages.[/quote] Again, check your facts the stores in colorado are still open and the store in NC moved to another location. Your the one acting like a panzi not a ponzi!

anonymous
anonymous

[quote comment="65070"]I just learned in October/November ‘07 all 8 Play n Trade stores in Sale Lake City went under and were sold to a new owner and the Branson, MO store also closed. These added to the previous 6 recent closings makes a staggering 15% of the existing 100ish Play N Trade stores have gone under and/or been sold. This is an alarming track record for anyone considering purchasing a franchise. Play N Trade seems to do a great job selling franchises but once open, the stores have a devastating track record. Worst of all, the ones taking the hit are the franchisees while corporate keeps selling the overly rosy story.[/quote] Have you visited the stores in Salt Lake, anonymous Jack ass? They are all still open and doing well!Learn the facts before you post idiot!

anonymous
anonymous

[quote comment="105349"][quote comment="5673"]Although an I'm sure an avid gamer, it's obvious the previous poster is not very familiar with the business side of the video game industry. Having worked in the video game industry on a small business level for several years, I can tell you Play N Trade is here to stay. No one offers what they offer. Play N Trade is finally a game store by gamers for gamers, its about time. From a small business perspective, it is a very affordable opportunity. GME did over 3 Billion dollars in sales, there is no signs of a slow down in this industry and no slow down in site for Play N Trade.[/quote] They may not be slowing down but they sure are ripping people off![/quote] If they were ripping people off, why are so many stores raving about how good they are doing? Get your facts straight before making a comment like that stupid!!!

anonymous
anonymous

[quote comment="105800"]I found the quote below in a Play N Trade press release (http://www.pr-inside.com/play-n-trade-video-games-launches-r444103.htm) titled "Play N Trade Video Games Launches Franchisee Advisory Board" "Roger Lloyd, CEO of Play N Trade. "The Play N Trade business model is franchisee-based. We have no corporate-owned stores, and are dedicated to the success of our franchisees. The FAB will provide an open forum for franchisees to offer feedback and make recommendations that will contribute to the continued enhancement of training and support, and improvement of franchisee operations."" I think it's a big red flag when a franchisor does not operate any franchise units. Installing a Franchise Advisory Board (FAB), is a good thing to do, but when the company doesn't operate franchise units to test systems, etc., a FAB may be expected to act as that test, that's a lot to ask of franchisees. The franchisor should have franchise units to test things on their own in addition to a FAB. Just an observation. Jim Coen[/quote] Jim, You are an idiot, if you read the bio's of the company, you will see that both the founder and Roger Lloyd both owned their own stores then franchised them so they wouldn't compete with the franchisees! Wake Up!

anonymous
anonymous

[quote comment="65070"]I just learned in October/November ‘07 all 8 Play n Trade stores in Sale Lake City went under and were sold to a new owner and the Branson, MO store also closed. These added to the previous 6 recent closings makes a staggering 15% of the existing 100ish Play N Trade stores have gone under and/or been sold. This is an alarming track record for anyone considering purchasing a franchise. Play N Trade seems to do a great job selling franchises but once open, the stores have a devastating track record. Worst of all, the ones taking the hit are the franchisees while corporate keeps selling the overly rosy story.[/quote] All the stores are still open in salt lake, what are you talking about moron?

anonymous
anonymous

Play N Trade is the best thing to happen to the Video Game Industry since the NES. It's a franchise model, which means the owners have the ability to make alot of money or screw it up. The store and everything it stands for, is the best thing out there. Why does everyone jump on the Franchisor and forget about the moron that didn't follow their proven system? If you are going to let negative blogs affect you decision about Quiznos, or Play N Trade or any other franchise out there, Stay in your dead end job! Your too weak minded to make it anyway. Owning a franchise is for the strong minded, not the weak and pathetic.

MP
MP

[quote comment="105800"]I found the quote below in a Play N Trade press release (http://www.pr-inside.com/play-n-trade-video-games-launches-r444103.htm) titled "Play N Trade Video Games Launches Franchisee Advisory Board" "Roger Lloyd, CEO of Play N Trade. "The Play N Trade business model is franchisee-based. We have no corporate-owned stores, and are dedicated to the success of our franchisees. The FAB will provide an open forum for franchisees to offer feedback and make recommendations that will contribute to the continued enhancement of training and support, and improvement of franchisee operations."" I think it's a big red flag when a franchisor does not operate any franchise units. Installing a Franchise Advisory Board (FAB), is a good thing to do, but when the company doesn't operate franchise units to test systems, etc., a FAB may be expected to act as that test, that's a lot to ask of franchisees. The franchisor should have franchise units to test things on their own in addition to a FAB. Just an observation. Jim Coen[/quote] NO WAY! The last thing I want to see, as a franchisee, is a franchisor running corporate stores. . . I want to know that they have in the past, but I don't want them to currently be doing so. Why? Because, if you run a very successful store, and the franchisor has corporate stores, what is stopping them from coming in as close as possible to you? Also, a franchisor that owns stores would give themselves the best real estate, pricing, etc.

Jim Coen
Jim Coen

I found the quote below in a Play N Trade press release (http://www.pr-inside.com/play-n-trade-video-games-launches-r444103.htm) titled "Play N Trade Video Games Launches Franchisee Advisory Board" "Roger Lloyd, CEO of Play N Trade. "The Play N Trade business model is franchisee-based. We have no corporate-owned stores, and are dedicated to the success of our franchisees. The FAB will provide an open forum for franchisees to offer feedback and make recommendations that will contribute to the continued enhancement of training and support, and improvement of franchisee operations."" I think it's a big red flag when a franchisor does not operate any franchise units. Installing a Franchise Advisory Board (FAB), is a good thing to do, but when the company doesn't operate franchise units to test systems, etc., a FAB may be expected to act as that test, that's a lot to ask of franchisees. The franchisor should have franchise units to test things on their own in addition to a FAB. Just an observation. Jim Coen

T-Bone
T-Bone

[quote comment="2936"]I have got to agree with the previous poster - downloading would seem to whack this business concept. Both legal and illegal downloading have to be a huge problem for this business model. Look at how Video stores are getting whacked by both DVD downloads, kiosks, and monthly mail rentals. Do you want to be in Blockbuster business, today? I think not.[/quote] Well I do believe you make some great points in this comment I must say that you missed a very crutial point expecially for game consoles. That is that when it comes to illegal downloads of movies and music there really is no way to control who is using them. But like the first poster said most gamers play in grouped online sessions. Now I don't know about pc's but for a game console most online servers can detect mod chips that allow consoles to play burned games in the first place. And because the makers of these games do have the upper hand in the online world it also gives them the ability to create new ways to stop illegal use of their games. As a result the game store lives on....

brem
brem

[quote comment="42956"][quote comment="17218"]we are debating whether to open a play n trade or a quiznos, quiznos is being offered at 50,000 price is attractive and play n trade is 150,00 to open, just doing research what do yall know about both of these franchises[/quote] Man, I don't know -- I've (had) also been considering taking the Play N Trade route but in my research I keep reading about stores closing. Dallas, Las Vegas, Farmington, North Carolina, 3 in Colorado Springs -- out of only 60 or so stores open? Check this out: http://www.cheapassgamer.com/forums/showthread.php?p=3387721#post3387721 I used to work in the QSR business and this is reminding me of how Boston Market was growing so explosively through focusing on selling new locations, not honing a business model that made money for the owners and within a short time the thing caved in. It was like a Panzi scheme and I'm starting to wonder if Play N Trade isn't playing the same game -- that the owners get in cheap but earn no money while the franchisor banks.[/quote] To me the Play N Trade closings aren't as big a deal as the huge opportunity that's slowly getting out about GameStop being about to start selling franchises. Read here: http://www.franchisepundit.com/forums/index.php/topic,177.0.html If choosing between a vulnerable new concept coming to the industry late in the game, with very small purchasing power in the industry (I'm in the business and trust me scale means everything for costs) versus the established, leading concept with 5K GameStop locations of buying power behind it, I'd pick buying a GameStop any day. I've watched a lot of others struggle to compete but you can't catch up to GameStop's volume cost advantages.

Jake
Jake

[quote comment="17218"]we are debating whether to open a play n trade or a quiznos, quiznos is being offered at 50,000 price is attractive and play n trade is 150,00 to open, just doing research what do yall know about both of these franchises[/quote] Man, I don't know -- I've (had) also been considering taking the Play N Trade route but in my research I keep reading about stores closing. Dallas, Las Vegas, Farmington, North Carolina, 3 in Colorado Springs -- out of only 60 or so stores open? Check this out: http://www.cheapassgamer.com/forums/showthread.php?p=3387721#post3387721 I used to work in the QSR business and this is reminding me of how Boston Market was growing so explosively through focusing on selling new locations, not honing a business model that made money for the owners and within a short time the thing caved in. It was like a Panzi scheme and I'm starting to wonder if Play N Trade isn't playing the same game -- that the owners get in cheap but earn no money while the franchisor banks.

anonymous
anonymous

we are debating whether to open a play n trade or a quiznos, quiznos is being offered at 50,000 price is attractive and play n trade is 150,00 to open, just doing research what do yall know about both of these franchises

nads
nads

[quote comment="5673"]Although an I'm sure an avid gamer, it's obvious the previous poster is not very familiar with the business side of the video game industry. Having worked in the video game industry on a small business level for several years, I can tell you Play N Trade is here to stay. No one offers what they offer. Play N Trade is finally a game store by gamers for gamers, its about time. From a small business perspective, it is a very affordable opportunity. GME did over 3 Billion dollars in sales, there is no signs of a slow down in this industry and no slow down in site for Play N Trade.[/quote] Well, he is a gamer, so if your store is "by gamers for gamers", isn't he exactly the person who should be most impressed with Play N Trade?

halohead
halohead

I am not so sure, a Play N Trade opend about an hour from me and are busy as ever. I went to their Halo 2 tournament and it was pulled off. There were about 60 adults and kids there. Everybody seemd to be excited about the new store in town. I try to download things on my xbox360 but it never seems to work properly. I am still going to want to play the game a little before I buy it. The "demo" versions that you can get online don't seem to work all that well. I also like to buy used games--I am a cheap-o. Finally there is an option to Gamestop/EB. In the end I would perfer selling video games and not sandwitches.

Michael Webster
Michael Webster

I have got to agree with the previous poster - downloading would seem to whack this business concept. Both legal and illegal downloading have to be a huge problem for this business model. Look at how Video stores are getting whacked by both DVD downloads, kiosks, and monthly mail rentals. Do you want to be in Blockbuster business, today? I think not.