If you are looking for an investment that will offer you great returns, then you should opt for something that sells goods people need for daily living. On that note, you can try franchising a “variety store”, like Dollar General. This is one of the biggest variety store chains in the US, so you know that there is a great demand for it.
But the real challenge is choosing the right Dollar General for sale. Franchising is a big decision, so finding the perfect property that meets all of your needs is important.
Whether you have experience in real estate or just starting out, this article will provide you with all the information you need to know about buying a Dollar General store. So, read on and let us help make your search easier!
About Dollar General
Dollar General is a variety store chain that sells everyday items, like groceries, health and beauty products, toys, office supplies, apparel, and more at low prices. With over 18,000 stores in the US alone and thousands more franchised locations worldwide, the company has become one of the most recognized retail brands.
When you franchise Dollar store outlets, you generally have two options: franchisees can either operate a Dollar General store exclusively or choose to purchase an existing Dollar General store.
As a franchisor, Dollar General provides support in all areas of the business, from marketing and advertising to training and operational assistance.
Dollar Store Franchise Requirements
Like other franchised businesses, there are also certain requirements that you need to meet in order to purchase a Dollar store franchise for sale. Here are some facts and figures that you should know.
New franchisees are required to pay a one-time franchise fee of $20,000. This covers the cost of setting up the Dollar General store, as well as any form of support from the franchisor.
However, this can vary depending on the products that you want to sell in your store. For example, it can go up to $35,000 if you plan to have a Dollar General liquor store as part of your franchise.
You will need a liquid capital of $75,000 in order to acquire a Dollar store franchise. But again, this may also vary depending on the size and nature of your business. Some new franchisees even had their initial investment doubled or tripled.
Like most other franchise businesses, you would also be required to submit a minimum net worth to become a Dollar General store owner. According to The Business Guru, the average net worth required to qualify for a franchise is $5 million. This gives the franchisor some assurance that you have the capacity to manage and sustain the business.
Ongoing Royalty Fees
When you are already running the store and making sales, it is important to remember that there is a royalty fee of 3% of your net sales. This fee is used by Dollar General for advertising and marketing efforts, as well as on-site assistance initiatives that they undertake with their franchisees.
Apart from the requirements discussed above, Dollar General also requires that you must be at least 21 years old to invest in the business. This also applies to any other franchisees or investors involved in the Dollar store business.
You might also need to undergo some training and attend company meetings once in a while. A franchise agreement, which will be provided by Dollar General, must also be signed prior to the commencement of your business. It is important that you understand all the terms and conditions before signing it. If there are any clauses that you do not agree with, make sure to discuss them so they can be changed or removed from the agreement.
Buying Dollar General Properties for Sale: 7 Important Factors to Consider
With Dollar General properties for sale popping up all over the country, it can be tempting to simply pick one at random or go with whatever looks most appealing. However, this is not the best way to do it. Here are seven important factors that you should consider when making such a big decision.
A Dollar General for sale that is in a good strategic location will be more profitable and successful than one that is tucked away in a remote corner of town.
Ideally, it should be situated in an area that has high foot traffic and is easily accessible. It should also be close to other anchor stores, so you can benefit from their existing customer base.
Do not just decide without checking the property in person. Visit the place and see for yourself if it is worth investing in or not.
2. Store Condition
No smart investor would purchase a property that is in bad condition. So, check the store carefully for any signs of damage or neglect. Make sure all the equipment, systems, and fixtures are up to date and in good working order.
Are the floors, shelves, and other parts of the store in good condition? If not, then you might end up spending more than what you had budgeted for.
If you think that some repairs or renovations might be needed, you should factor that into the cost of buying the store.
When doing your market research for the Dollar General store for sale you are interested in, you should look around and see how much competition it has in the area. If there are a lot of similar stores nearby, it could be hard for you to build a loyal customer base and make your store profitable.
While the store you buy should be close to other anchor establishments, make sure that there is not much competition in its immediate vicinity.
4. Area Demographics
The typical customers of Dollar General are from the lower to the middle class. Families with low to moderate income levels are more likely to shop at their stores.
So, find out if the area has a population that fits these profiles. If it does, then you can be confident about your store’s success in this location.
You can find out this information from census data or local government reports, which are reliable resources to help you understand and target your potential customers better.
5. Sales Performance
If possible, you can ask about the store’s sales performance in the past few months. This will give you an idea of how successful the store has been and if it is worth investing in.
You can speak to someone from Dollar General’s corporate office to gather this kind of information. Sure enough, they will be more than willing to help you out.
6. Possibility for Future Developments
There is always the possibility that, eventually, you want to make some changes or modifications to your store.
For example, you might like to update some structural features or expand the building itself. A drive-thru, perhaps? Or, how about another floor? You must check with the franchisor if it is possible to do those.
You should also find out about the zoning laws and restrictions in the area. Non-compliance would not only result in hefty fines but can also lead to legal problems that can hinder your operations. So, do your due diligence.
Of course, you should start with properties that are within your budget. Dollar General franchises are generally quite affordable. There might be some upfront costs that you need to factor in, but they should not be too high.
With these factors in mind, you can now start your search for potential Dollar General stores that could be a great investment for you.
How to Search for a Dollar General Store for Sale Today
The quickest way to look for available Dollar General properties is through an online search. You can Google “Dollar store for sale near me”, and you will surely find Dollar General for sale in your location that meets your investment criteria.
You can also visit the company’s website itself and look for listings there. There are third-party websites as well that feature available stores for sale, both locally and nationally.
If you have the time, then you can check out your local classifieds too. Dollar General properties are likely to be featured there also.
Tips on Becoming a Successful Real Estate Investor
If you still do not have experience in real estate, then you should get yourself up to speed. Here are some tips to help you begin your journey to becoming a successful Dollar General investor.
1. Start small.
A lot of successful real estate investors today started small and then expanded their portfolios as they gained more experience. Do not go all-in right away and purchase a store that is too expensive or requires a lot of work to get up and running.
Instead, be patient and take your time. Make sure you are really familiar with the Dollar General franchise model, its operations, and its policies before you commit to anything big.
2. Set short-term and long-term goals.
It is important to have both short-term and long-term goals when it comes to real estate investing. Set achievable milestones that you can easily track and measure your success.
For example, if you are starting with a Dollar General franchise, you should set goals, such as increasing store sales by 10% in three months and growing your customer base by 25% within the next two years.
Doing this will help you stay focused on reaching your end goal of becoming a successful investor.
3. Stay organized.
Organization is key for any kind of business, and the same goes for Dollar General franchising. As you search for and acquire a store, make sure all the documents are in order and every detail is accounted for so that you do not miss anything important.
4. Get a mentor.
Mentors are an invaluable source of wisdom and advice, and they can give you expert tips how to become a real estate investor and make smart choices along the way.
It would be great if you can find someone who has experience in buying businesses and properties of the same nature as Dollar General, as they can properly guide you as you start your journey.
Finding the right Dollar General for sale for you is a process that requires careful consideration and research. You should take the time to understand all of its aspects before making an investment decision.
With the pieces of information in this article, we hope that you can now confidently find the right property that fits your investment needs and goals.
For more useful tips on real estate investing, feel free to check out our other post!