PLAY N TRADE: Video Game Franchise Played Out?
August 10, 2008
Are you familiar with the Play N Trade video game franchise? The franchise owners buy and sell used video games and video game related supplies and merchandise. At FranchisePick.com, Dale, an MBA candidate who is researching the Play ‘n Trade business model had some disturbing things to say about the Play N Trade used video game franchise :
I will graduate with my MBA in 6 days and my thesis is on Play N Trade. My professor has his PH.D. in management and we have been working on the PNT UFOC and financials for 4 months. I called corporate for information and researched everything I could find. The Play N Trade I went to did not have a play before you buy policy because the owner needed batteries for the game stations and he could not afford to buy them. He told me, a potential customer, that he was losing money. I felt so sorry for him I asked it I could buy a Wii but he did not have one in stock. As I looked around the store, “Out of Stock” signs were everywhere. I went to another store and had a similar experience and at the third store the owner tried to sell it to me.
I have a co-worker opening a Play N Trade. I wish she had not bought the hype. I have heard it as well and it is good hype but unrealistic.
My professor told me to tell my friend to “get out if she can.” It is not your business skills effecting your business. I have to defend my thesis and we can not even find a way to make the organization work. When I presented the company to my professor I thought it was great and he just smiled and said, “Let’s see how you feel at the end of the semester.” He was right.
Have you had any experience with the Play ‘n Trade video game franchise opportunity? What have you heard? Share a comment below.
Established Play N Trade For Sale. I hate to sell but have to do so because of health issues.
Our west-central Florida store consistently ranks in the top 20 (of 200 stores currently open). We have a highly-visible location with lots of drive by as well as foot traffic, as well as a database of approximately 5,000 customers. Buying an established location like mine will save you the months of headache with buildout, as well as the first few months of very slow sales after opening.
We’ll provide 4 weeks of transitional in-store training (this is above and beyond what you get from the franchise). After signing confidentiality agreements and proof of ability to pay (verification of deposit or pre-approved loan documents), I can discuss the financials and such. The store is valued at $362k but I’m asking only $300,000 for a quick sale. If you are seriously interested you can email me at [via admin at unhappyfranchisee[at sign]gmail.com and he will forward] with your contact info
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This franchise is great! I love the store and the concept is great! All of the people complaining about this are just not educated in the video gaming industry. How does gamestop make it? This concept is so much better and the pricing from the vendors is very close! The store is what you make it! They do make it .. and they do great! Just mad owners because they expect to open the doors and along comes the money. Thats not how small business works. There is so many store owners that are happy and that are buying more units. Playntrade is great!
This franchise is great! I love the store and the concept is great! All of the people complaining about this are just not educated in the video gaming industry. How does gamestop make it? This concept is so much better and the pricing from the vendors is very close! The store is what you make it! They do make it .. and they do great! Just mad owners because they expect to open the doors and along comes the money. Thats not how small business works. There is so many store owners that are happy and that are buying more units.
I disagree with John Webb. If there’s some controversy and lots of owners are complaining, then that’s an indication of a problem. You can’t say it’s just a conspiracy, and people just want to complain. That doesn’t make any sense. The kind of people who are entreprenuers, and would open a store, tend to be the kind of people who would not just open a store and expect the money to roll in. That’s what I refer to as a “Simpleton” explanation, not that you are, but an irrational way to deflect some conflict that you aren’t capable of dealing with. And it’s incorrect.
I suggest you reconsider your conclusion.
The best way to find out if a franchise concept is a good investment is to talk to a lot of their franchisees. By talking to a large number of franchisees, you can best understand if you are dealing with two or three whiners, or if any complaints and problems are really prevelant.
In the example of a Play N Trade franchise, you may want to ask them if Gamestop is a serious competitor. How close is their Play N Trade store to the nearest Gamestop. How does the franchise company tell them to best compete with Gamestop.
Gamestop appears to do very well. That could mean they are a tough competitor, but it could just mean that it is really an excellent market.
Also, you might want to ask them if they are getting much competition from other used video game franchises.
In depth research is the very best way to pick the best franchise.
Hi Dale,
I am a spanish investor looking to master-franchise PNT in Spain. I would be really interested in reading your thesis about this company. I am also a MBA holder at Instituto de Empresa (Spain) and I am sure that most of the things I would like to know are in yout thesis. Please let me know.
S.Mauri
Amazing how anyone can post anything online now a days and have people believe it as being credible.
Play N Trade has been awarded in the top ten of new concepts last year by Entrepreneur Magazine and is one of the best growing brands in this economy.
What they have accomplished in a short amount of time is incredible. They have a great concept.
They have an amazing leadership team that has led billion dollar companies in the same space and bottom line is they have competitors that are shaking in their boots.
You will see much more of them to come!
JC wrote: Amazing how anyone can post anything online now a days and have people believe it as being credible. Play N Trade has been awarded in the top ten of new concepts last year by Entrepreneur Magazine and is one of the best growing brands in this economy.
You are right, JC. People should be skeptical of whatever they read or hear – on and off the Internet. It’s funny, though, that you would then cite Entrepreneur’s bogus and advertising driven listings as credible.
In 2007, Entrepreneur named iSold It the #1 Best New Franchise and widely praised the ebay dropoff concept. At the same time, more than 60 franchisees had already failed and the chain was collapsing. Look it up on FranchisePick.com, whose blog posts prompted them to delete ISI from their list completely.
Entrepreneur dropped PnT from its Top New Franchises list completely in 2009. It downgraded Play N Trade’s position in the Entrepreneur 500 from #207 in 2008 to #345 in 2009. Does that mean PnT is going downhill? Does that mean there are truly 344 better franchise opportunities?I wouldn’t necessarily draw those conclusions, because those award lists are pure fiction designed to sell advertising, not inform the public. Subway has been #1 for all but 1 in 30 years, for crying out loud.
Smart franchise investors take note of all the positive and negative things being said from all sources, and then independently verify and draw their own conclusions. They are much more interested in what’s in Item 19 of the FDD than accolades in magazine lists. Agree?
Unfortunately, I have to sell my Play N Trade in Madison, WI. I think Play N Trade is a great store, but due to issues not related to store performance, I have to sell. This store can be moved anywhere in the country and the transfer fee is much less than buying a new franchise agreement.
Listing Includes all inventory (Approximately 50K), POS Systems, 7 Flat Screens and all fixtures, officer furniture and safe! This store can be sent anywhere in the country!
Asking Price – $150K
The video game industry is a hot industry and there are several mom and pop stores that seem to be doing well. I inquired about the franchise and have spoken to all different types of owners. It seems that the people that complain are older franchisees that didn’t have enough money to start with. How can you make money if you have no inventory. I love their concept and while I think they could use some improvements it looks as though they have some good changes in the works to improve the model. Still there are alot of franchisees that are doing tremedously well for only in business 1 year.
College Professors=people that couldn’t hack business in the real world ;o)
I was the franchisee of the year on 2007 and my experience was good. However, I had to close my operation after almost two years of operation. These concept requires a strong working capital to keep the business running in the slow months. If you have at least $100k of back up you can make it. I love the concept and dealing with people and making them smile, but hated when seeing them leaving the store due to lack of inventory. Nothing wrong to have one, but are sure you have the strong financials to keep it running? Just asked how many of us are in bankrupty today…
Unfortunately rankings mean nothing to a franchisee. All rankings mean is that the franchisor sold this many franchises and that many Area Developments. This means nothing to a franchisee. The problem with PNT is that they grew to fast, meaning they took anyones money and did not care who they were. They did not care that the franchisee was unfit or not a good match for their model, they just wanted the money. You will notice that they are closing stores left and right and it is PNTs fault indirectly. Also you will notice that they have restructured several times already. They are on there 3rd CEO in 2 years and corporate is thiner and rearranged. Don’t blame this on the economy becuase video game sales are not effected as proven in all finacial reports of video games.
PNT has a great concept and a lot of successful stores. My point to this is that selling a franchise is not like selling a video game. You can’t just sell a franchise to anyone and thats exactly what PNT did. Unfortunalely, there are problems with growing to fast. They sold 200 stores but they could not support 200 stores especially the ones that have no clue on how to follow the system. Franchisees need training and support, some more then others.
The 2007 Franchisee of the Year was out of business by 2009? Sheesh!
Sorry to hear that, Manny.
I own a Play N Trade. We just opened in july 08. we have been breaking even or profiting since september. WE ARE NOT HIGH VOLUME……….. we are not at the top of the monthly rankings. BUT!!!!!!!!!!!! we manage our inventory and cash flows. Our business is building every month and I am a happy franchisee……….. How could i possibly be happy we are not a high volume store?
The store does not make you successful, you make the store successful.
I do agree that pnt let anyone open a store in the beginning. most of those people do not know how to run a business and manage cash flow. Most of them are closed or are closing by now i’m sure. You will see more and more stores becoming successful as the franchisees they allow to open have better business management skills. Anyone can sell a video game but can YOU manage the operations of the business.
[...] PLAY N TRADE: Video Game Franchise Played Out? [...]
I am thinking of starting a PNT franchise. I am in the process of gathering information on the comapny and concept. Would you allow me to read your thesis? as it could be of great help to my final decision.
I am looking at a few different franchise opportunities,
looks like PNT has a good concept, but doesnt like to get into the details as much as I would like..
Obviously I am aware that many factors affect sales, but I would like to know the top tier stores, sales the middle, and the bottom.. depending on the location, operation and execution – I imagine that stores should fall somewhere in the middle..
understand true sales numbers, from the start up phase, 6 months, 1 year, etc.. can provide with some guidance on what to expect the 1st year..
again i know many factors affect sales, but with a 4-5% royalty.. I need to know what my sales are likely to look like..
one other option I am looking at is a 7-11.. they very clearly outline sales/margin components, expenses, etc..
i wish PNT was clear on store sales numbers… not just big picture “industry” numbers…
Start calling PNT Stores and ask them. The franchisor can NOT give you any sales projections doing this would give you falls hope and open themselves up to law suit. The franchisee can share whatever they want.
As anon says, the best source of sales numbers will be other franchisees. Call as many as possible, especially in the case of Play N Trade.
Also be sure to check out the lively Play N Trade discussion at UnhappyFranchisee.com.
Here are some links:
http://www.unhappyfranchisee.com/play-n-trade/
http://www.unhappyfranchisee.com/play-n-trade-ca-revokes-pnt-franchise-registration/
http://www.bizzia.com/franchisepick/is-play-n-trade-a-great-franchise-opportunity/
Play N Trade could provide unit sales information by providing an Earnings Claim in Item 19 of their Franchise Disclosure Document but, like 70% or so of franchisors, choose not to.
[...] PLAY N TRADE: Video Game Franchise Played Out? [...]
[...] 2009 5:48 pmThere’s a comment on the other Play N Trade post here from franchisee Manny Velez. http://www.unhappyfranchisee.com/play-n-trade-video-game-franchise-played-out/He said he was the 2007 Franchisee of the Year but had to close after almost two years of operation. [...]