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Hobby Store Franchises?

Old 03-07-2008, 01:17 PM
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Lieutenant Loughead
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Default Hobby Store Franchises?

Hey guys,

I've decided I'm tired of working for incompetent people, working my butt off and stressing over my job, while they earn $100,000,000 per year (that is an actual number -- the company I work for earned $100 million per year, the last two years in a row).

I want to be my own boss, and have decided to pursue my passion -- Remote Control.

Now, if I open my own store, under it's own name, I figure I won't have any income for several months (years?), and the store will be out of business shortly thereafter. However, if I pay the cash for a franchise, I'm (almost) guaranteed success...

So, what are some RC hobby store franchises? I can only find two:Are there others?

Also, I look forward to talking with anyone who has ever traveled down this same road.
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Old 03-07-2008, 11:24 PM
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Tulsa needs a hobby shop that doesn't just cater to the slimers. I hate it when I have to order small hardware from Tower or All E because Hobby Town USA and Tom's are both out. I really don't think Tom cares too much for the small electrics. And Hobby Town USA is well...Hobby Town USA . I still like the idea of having something like what Mac Hodges set up down in Georgia. Flying field, store, and all around cool place to hang out all rolled in to 1. That would be sweet .

If there is ever anything I can do to help just let me know. Unfortunately I can't help with any money but when the donations start rolling in and you have some brick and mortar you need to do something with give me a call .
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Old 03-08-2008, 12:50 AM
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Guy,

Let me offer my support. Obviously I wouldn't be stopping in regularly, but if you also catered to internet or phone sales (at least for the SPECIAL folk, and who is more special than I am? ), I would be a loyal subject.
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Old 03-08-2008, 01:17 AM
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...

Last edited by FlyingMonkey; 03-11-2008 at 07:13 PM.
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Old 03-08-2008, 02:07 AM
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You definately need a gimick. I once mentioned e-bay at the old LHS and they wanted to shoot me.

It was not that great of a shop but about 8 years ago the LHS owner sold since he was having nightmares about counting pennies. Very tough for the "brick and mortar" stores these days.

Whatever the case, Best Wishes and be sure to put me on your mailing list! Rob
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Old 03-08-2008, 03:48 AM
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Originally Posted by Lieutenant Loughead View Post
Hey guys,

I've decided I'm tired of working for incompetent people, working my butt off and stressing over my job, while they earn $100,000,000 per year (that is an actual number -- the company I work for earned $100 million per year, the last two years in a row).

I want to be my own boss, and have decided to pursue my passion -- Remote Control.

Now, if I open my own store, under it's own name, I figure I won't have any income for several months (years?), and the store will be out of business shortly thereafter. However, if I pay the cash for a franchise, I'm (almost) guaranteed success...

So, what are some RC hobby store franchises? I can only find two:Are there others?

Also, I look forward to talking with anyone who has ever traveled down this same road.
I Hear you Big Time, I feel the same way, I may be starting a RC flying School Soon, people can buy rc planes, but it not easy to fly them or set them up right, and thats where people get discouraged, and leave the hobby after crashing there brand New Rc Plane, I am hoping to start a school and sell motors, esc, props and radios on the side and kits later, I will have to see how it goes, Take care, and good luck to you on your endevor, Chellie
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Old 03-08-2008, 03:52 AM
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I go to the LHS quite often. I wish they carried "cheaper" motors. It's not a secret I hate buying stuff off the internet from a site that's reselling HC parts at a 5o%-100% markup' but I WOULD'nt mind it so much from the LHS. Having parts people want and being nice and informative goes a long way in my book.
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Old 03-08-2008, 04:13 AM
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Wow! Ambitious quest. But doable. I can't answer your question, but I'd like to wish you luck. Keep us informed on progress.

Frank
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Old 03-08-2008, 12:20 PM
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Slowjohn
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Thumbs up Great Idea

I've often thought that IF I could either get the backing or come into enough money that I'd open a place outside of a town/city that'd have a flying field, a dirt track for the RC off road stuff, a paved road race course and maybe a small shallow lake for the boating crowd. Inside would have a couple of slot car tracks, a work area for the participants/customers and it'd all be geared for the electric bunch. I'd want to have some items in stock to sell but as for having lots of kits or ARF/RTF stuff I'd think a catalog store type of thing might work. I'd have to stock a few decent RTF/ARF trainers for the newbies and of course the mandatory free flying lesson(s) to get them started along with several on site simulators.
I like FM's idea of the restaurant and a place for the women folk too, maybe not a spa but something for them anyway. Maybe could even have an indoor shooting range if I had enough acreage. Only thing is I'd have to move away from the small towns USA part of the country where I'm located now.

Best of Luck to you LL,
SJ
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Old 03-08-2008, 06:35 PM
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Okay guys -- a few thoughts:
  • I really appreciate all the responses -- you guys have some great ideas, and your support is welcomed with open arms.
  • I went to Mac Hodges web site, and it really doesn't tell me much. Can someone elaborate on exactly what he has that's so cool?
  • To be perfectly honest, I've already brainstormed the idea of having an outdoor flying site (and even an indoor flying site!) -- but the cost is truly prohibitive for a startup business. Also, an outdoor flying site would require me to be on the outskirts of town -- where nobody knows I exist. (An indoor flying site would cost me $7,700 per month in rent, and would be in an industrial park -- where nobody knows I exist -- not a "normal" retail location.)
  • While I really do appreciate all the brainstorming, and I continue to encourage it, the idea of a spa and restaurant is FAR outside the relm of possibility... My "plain old", "normal", "brick and mortar" hobby shop will be well over $150,000 in the hole, on opening day! I can't possibly entertain the thought of a restaurant and spa!!!
  • Nobody has answered my original question -- what other franchises are out there?
  • I have some ideas which will make my store unique. Anyone who truly knows me, already understands I'm not happy with doing the same old boring thing that's already been done. (Just take a look at my web site.)
Thank you for posting -- and keep the ideas coming.

I'll tell you what -- if you come up with an idea I use at my store... Well... I'll give you a discount (or something).

(I probably shouldn't post this, but I'm excited about it, and feel the need to share... I spoke with my father this morning -- he's behind my idea 100%, and offered to help me with the startup capital.)
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Old 03-08-2008, 06:51 PM
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Good luck on your quest. I wish I could be there with you. Those of you who have read my posts know how I feel about the LHS.

I'm not entirely sure that being out in the boonies is a bad idea. Radio and TV advertising go a long way to get the word out (more than just a sign) the rent is cheaper, and you can offer a flying site.
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Old 03-08-2008, 06:57 PM
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By the way -- I'm thinking of selling many of my aircraft, to help with the startup capital for my new business.


If anyone is interested, please let me know:
  • GWS ME-109: Fully fiberglassed. Airbrush painted. 50 MPH top speed, 20 minute flight times.
  • GWS P-51: Fully fiberglassed. Covered with Microlite covering. 50 MPH top speed, 20 minute flight times.
  • Flying Styro P-38: One of the best flying (and THE best LOOKING) P-38's I've ever flown.
  • Stryker C: Non-stock brushless motor. She's already hitting 80 mph, and I believe 105 mph is achievable.
  • KarglUSA P-38: Flat foamy prototype. The most forgiving P-38 I've ever flown.
  • KarglUSA Zero: Flat foamy prototype. This one is so easy to fly, I fly it in my cul-de-sac, in front of my house. You can fly it like a Slow Stick, or like a warbird -- all in the same flight! SOLD
  • Slow Stick #1: This one has superbright LEDs all over it, and was my Aerial Photography platform for a long time.
  • Slow Stick #2: This one is NEW -- I built it for someone else, and I test flew it, but he never paid me for it. SOLD
  • Sureflite P-51: This one is BIG (5-foot wingspan, 3.5 pounds), and flys great.
  • F5-A prototype: One of my newest airplanes -- I hate to sell it so quickly, but I do need cash! :o
  • Blade CX2: Has MD-500 fuselage. Easy to fly, and looks COOL. Only 2 months old, and never crashed.
  • KarglUSA Lear Jet: Twin ducted fan -- still under construction. SOLD
  • GWS P-40 #1: New, still in box.
  • GWS P-40 #2: New, still in box.
  • GWS P-38 #1: New, still in box.
  • GWS P-38 #2: New, still in box.
  • GWS P-38 #3: New, still in box. SOLD
  • Flying Styro F-16: New, still in box. SOLD
  • Cox Micro P-40: New, still in box. SOLD
You can look in my gallery for pictures of many of these aircraft. (Just click on the little camera icon to the left of this post.)

If this isn't the place for this, I apologize, and will gladly delete this post. :o Just let me know, and kindly don't spank me too hard... :o

Last edited by Lieutenant Loughead; 09-11-2008 at 08:26 PM. Reason: Updated "sold" status
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Old 03-08-2008, 07:03 PM
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gfdengine204
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Guy,

Are you willing to put what you want for each of them?
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Old 03-08-2008, 07:05 PM
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Is selling your stuff REALLY going to raise enough capital?

I guess having a flying field depends on local laws. One of the local LHSs sit next to a lot, I'm not sure of the ownership.
It's big enough for small electric planes but the heli guys dominate it.
On the other side there's a quarry where the truck guys can play.
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Old 03-09-2008, 12:31 AM
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...

Last edited by FlyingMonkey; 03-11-2008 at 07:13 PM.
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Old 03-09-2008, 03:31 AM
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Stats show that the 2nd worst business to set up is a hobby shop. I don't remember waht the worst was.

If you get into it, be prepared to carry craft stuff, that is where the money is to keep your hobby side alive. 15% markup on models and parts, up to 10,000% on beads and cordage etc...

I wish you luck just the same...
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Old 03-09-2008, 04:23 AM
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gfdengine204
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Guy?

Could you make me a nice beaded necklace for my daughter, please?

Somehow I can't see you beading......but I could be wrong.
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Old 03-09-2008, 04:27 AM
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Guy,

Will you be selling shrinky-dinks?

Frank

PS Actually, what will you be selling? Will it be the same old thing as everyone else? Please say you are not planning on selling United Hobby stuff.
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Old 03-09-2008, 04:30 AM
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Originally Posted by Murocflyer View Post
Guy,

Will you be selling shrinky-dinks?

Frank

PS Actually, what will you be selling? Will it be the same old thing as everyone else? Please say you are not planning on selling United Hobby stuff.
Aw Frank, what's wrong with their stuff? Some of it is ok for us lower-income folks. The Loong batteries and the TowerPro motors.....it works for me, I have no complaints.
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Old 03-09-2008, 04:32 AM
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Originally Posted by gfdengine204 View Post
Aw Frank, what's wrong with their stuff? Some of it is ok for us lower-income folks. The Loong batteries and the TowerPro motors.....it works for me, I have no complaints.
Nothing, but why would anyone shop/buy that stuff at Guy's place when dozens of other places sell them?

Frank
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Old 03-09-2008, 04:47 AM
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There's quite a few places reselling HC parts and doing quite well I think.
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Old 03-09-2008, 05:17 AM
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As a business owner, my typical client is either starting up their own, or upgrading their current establishment, I compete with comapnies that offer franchises of the same nature. The franchise seller typically will get a cut in the profits, they will also charge a substantial fee just for setting it up and organizing the place for their client. You are paying for someone else to do the thinking for you, when in reality, you should be doing your own thinking. If the franchise was able to get some exclusive, substantial discounts to keep you supplied, I'd say that's a good thing, but I've never found that ever to be the case.

The types of operations I deal with are typically food service related. The inventory has a shelf life, the codes that are required to pass include having to set up dedicated electrical and sanitation elements including refrigeration. This is far more difficult then setting up a store that only has dry goods, so much so, I consider it laughable that people insist they cannot do it on their own and they are buying into some place that's setting rules and limitations upon how they can operate, which in my book, you are not working for your self, but for someone else since your freedoms are restricted. The name of the game in business is being able to think on your feet, to change when the market changes, case in point here with you guys wanting to have access to cheap gear locally rather then having to order them online and play the waiting game.

In a nutshell, all you are doing is finding a space at a decent location, getting a business license and insurance, talking to all of the suppliers you care to do business with, loading up on inventory, grabbing some shelving and displays, getting a yellow page ad and web site, signage and a little creative marketing, and you have a working, flourishing hobby shop. Keep in mind, I plan upon opening one up myself, it will be what I retire on since I couldn't stand not working any more and it would make a relaxing place to establish and hang out in. I'm not going for becoming rich off of it, if that's why you are doing it, I highly suggest finding another field, there simply is not a ton of money to be had there, especially in this day and age of the shere volume of internet sales. With my expertice though, I can really go to town on the presentation, display/shelving area the likes of which, would normally cost 100k or more that I can do on the cheap since I have the skills and equipment already set up to accomodate that area.

Just my 2 cents from a practical business owner.
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Old 03-09-2008, 05:25 AM
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Originally Posted by fr4nk1yn View Post
Is selling your stuff REALLY going to raise enough capital?
No -- not even close. But every little bit helps. :o If I can raise $1,000... well, that's $1,000 I won't have to borrow (or pay back, or pay interest on).

Originally Posted by FlyingMonkey View Post
The website does not do the place justice. (I'll have to elaborate later, it took too long to post this as it was.)

Mac is far from anywhere. Yet he will outlive most of the established shops in my opinion.

As far as being where people know you exist... to quote a movie, If you build it (the field) they will come. Everyone needs a place to go to fly, they don't all need a place to go, to buy a plane. It's why so many local shops are closing their doors.

Take a look at where Mac's place is, really. It's well out of town, in an area that's far from anywhere, yet, people from around the world know it. Sure, SEFF plays a large part. But it's just a matter of marketing. If you own the field, you can create the fly ins, that could potentially rival SEFF.
Well, I still don't have any real information on Mac's. I'm told to look at his location -- but I'm not provided a link to a Google page... :o

Also, you say EVERYONE knows about Mac's... I don't. :o Also, nobody here seems to be able to give me any good information on Mac's... :o

Originally Posted by FlyingMonkey View Post
Everyone needs a place to go to fly, they don't all need a place to go, to buy a plane. It's why so many local shops are closing their doors.
I know this was quoted above, but I wanted the opportunity to respond to this comment... In Oklahoma, there are so many places to fly, it's just silly. There is very little need for a dedicated field in Oklahoma -- much less, one at my hobby store (which I have to pay rent and insurance for).

Now, I can already tell you (from vast experience), I'm going to get lots of resistance to my comments (above). I've had this discussion many times before, and it's very difficult to make people outside Oklahoma to understand. All I can tell you is, come visit, and I'll show you around. (You can also ask Tom, and Kev, who don't live in Oklahoma, but visited around Thanksgiving last year, and I showed THEM around.)

Originally Posted by FlyingMonkey View Post
The other businesses that I suggested would be renters. It's a thought I had. You supply the buildings, they pay you rent. It's a financial buffer. So if things are slow with the shop, you're guaranteed an income.

If you build a steel building, how much would it cost to have one big enough for two or three shops in it? For the added expense, I think it would more than pay off, to have that known income.
LOL -- if I had the money to build the buildings, I wouldn't need to run a hobby shop!!! Seriously -- you're talking about a $1 million to $2 million investement. That's so far outside the scope of this discussion, well, I just can't even think about that.

When the hobby shop starts, I'm the only employee. I don't have money to hire people to run the spa and restaurant, and I don't have the luxury of time (as the property sits vacant, waiting for renters).

Originally Posted by FlyingMonkey View Post
I can see the logic behind wanting that safety blanket of a franchise. My only concern is once you do that, you're under their rules. You are right back to having a boss. Will they demand you purchase a certain amount of stock from them? Will they deny you the right to buy from the vendors you want to? Will they let you run your own business how you want to?

I know I am still not adding to the original question, just from bringing up some points that I have seen influence some businesses I have worked with and for in the past.
Yes -- after the research I've done, it seems that Hobby Town USA is exactly as you describe. HTUSA wants things done their way -- all my money is funneled through them, and they supply you with everything (making it very easy for them to skim off the top).

RC Hobbies is different. All my money goes straight from my account to the vendor -- the franchise has set up the discount rate and shipping terms with the vendor previously, so the benefit is there without the danger. RC Hobbies tells me what to do with 80% of my business (80% must be RC Helis, Airplanes, Cars and Boats) -- the other 20% is completely up to me. I can buy anything I want, from any vendor I want, to fill 100% of my store. Obviously, I'm seriously leaning towards RC Hobbies at the moment.

I have three hurdles I must get over:
  1. Startup capital of $150,000 (plus rent, utilities, insurance, etcetera)
  2. I take a 50% cut in pay the first year. (Based on what I am earning right now.)
  3. I work 7 days a week, 8 to 10 hours per day -- no vacation, no holidays, no sick leave.
Originally Posted by TLyttle View Post
Stats show that the 2nd worst business to set up is a hobby shop. I don't remember waht the worst was.
I would like to see those statistics. Please post a link, or send me in the right direction.

Just a day or two ago, I read on MSN that the TOY industry has one of the three largest markups of any other retail stores. I made the assumpion that TOY = RC (I think of my RC airplanes as toys for big boys.)
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Old 03-09-2008, 05:58 AM
  #24  
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I would suggest some research into the hobby in Tulsa. It should be easy to determine membership levels of clubs in and around the Tulsa area.

I would also suggest you take steps to create new customers by putting on Aviation Camps such as we are doing in McAlester. It is slow but we are bringing more youngsters and their parents to the hobby.

I am not sure how valuable the RC Hobbies name would be since the name is not widely known, according to the locations listed on their web site. Are there any restrictions on selling on the web with the two franchises? Web sales should become a large part of your business. New Creations RC is a web only operation and Kirk does quite well and has a national reputation.

Just some thoughts.
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Old 03-09-2008, 06:15 AM
  #25  
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LOL -- I'm way ahead of you, as far as RC hobby research in Tulsa.

Yes, there are some UH products (Loong Max batteries are very well liked around here) I would carry in my store.

I would also carry Depron. I'm currently the only source (including RC stores) of Depron in the Tulsa area. The Hobby Shop owners say they can't get it -- I have no idea why not...

I have a couple of tricks up my sleeve, which I will not discuss, until the store is open. It will be unique, and will only cost me about $12,000 more...

I'm really not interested in the RC Hobbies name. I'm interested in them telling me what I should stock on opening day, and how much I should charge for the merchendise. I know very little about cars and boats.

Both franchises (RC Hobbies and Hobby Town USA) restrict the hobby shop owner from setting up their own web site. However, they both allow you to use their corporate web sites for your store web presence.

For those interested, the franchise fee is about $15,000 (includes lease negotiation, which could save me $11,000 in setup costs). The royalty fee is 3% for HTUSA, and 2.5% for RCH. Both franchises say their negotiations with the distributors will save you more than their royalty fees cost. (Yes, this could be smoke and mirrors -- who knows?)
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