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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Ryan is an attorney and valuation specialist residing in Chicago. He chronicles his thoughts and research on FranchisePundit.com. You may reach him by email ryanknoll@gmail.com or mobile telephone 312-715-8115.
Look on bizbuysell.com, and do advanced search for key words video games. Current owners are almost giving their franchises away. Ask the play N trade people how many stores have closed. Ask existing franchisees what the system average store volume is, and what their margins are.
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.
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?