The Costco Franchise, or, more precisely, Costco Wholesale, is an American corporation operating in retail stores.
It is, actually, one of the biggest retailers in the world, even though, more recently, they have also widened its offer online with Costco eCommerce.
In this article, we’ll explore the history and business model of the Costco Franchise, other than answering some Most Frequently Asked Questions.
About Costco Franchise
Costco Franchise is today one of the biggest retailers in the world. They were born in the USA, but today, they are active in fourteen countries.
In their stores, people can find all the products they need for the house and family. During the decades of its history, Costco became famous for its discounts.
In Costco stores, you can find bulk quantities of products sold at very discounted prices. These are, however, available only to club members who pay an annual membership fee.
The Costco franchise business model is the warehouse club: clients join, in a way, the Costco club by paying an annual fee.
In exchange, they are provided with anything they need, in a single place, at the most discounted prices.
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History Of The Brand
The first Costco warehouse was opened by Jim Sinegal and Jeffrey H. Brotman in Settle in 1983. In the same year, two more warehouses were opened, one in Portland and another in Spokane.
The success was so huge that in 1985, only two years after the opening of the first Costco warehouse, the company, Costco Wholesale Corporation, went public.
In 1987, the company moved its headquarters from Seattle – where the first warehouse had been opened to Kirkland.
The Merger With Price Club
In 1993, the Costco Franchise merged operations with Price Club. After that, the latter declined an offer a merge with Walmart.
Pipe Club and Costco had a similar size and business model; the company resulting from the merger took the name of PriceCostco. Now, members of the Price Club could also shop in Costco warehouses and vice versa.
Important Milestones
Over the years, Costco has opened many warehouses in the USA and also enlarged its operations internationally.
In 2014, they were the third-largest retailer in the US.
Other than opening new warehouses, Costco has also grown online. The first important milestone in this sector was in 2014 when they announced that they would open a Costco online store in China. (In 2019, they also opened the first Costco warehouse in Shangai)
Costco Franchise Today
Today the Costco warehouse is also open in New Zealand, Puerto Rico, Canada, Mexico, Japan, the UK, Korea, Taiwan, Australia, Spain, France, China, Iceland, and Sweden.
Costco Franchise Model
| Business Model | Warehouse club |
| Franchise | NO |
| Finance | 37.5 billion USD |
| Membership Fee | 120 USD (per year) |
| Number of outlets | 840 |
| Current Liquidity | 32.7B USD |
| Current Liabilities | 32.0B USD |
| Current Ratio | 1.02 USD |
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Training & Support From Costco Franchise
Costco offers training to its workers when they are first hired and when they are promoted to new roles.
But what about franchise training and support?
Although Costco is often defined as a franchise because we see many warehouses all around the world, it is not an actual franchise.
It means that you can’t open a Costco warehouse as a franchise store. All the warehouses you see in your town or all around the world are opened and managed directly by Costco.
If you want to invest in Costco, the only way is by buying stocks. However, Costco doesn’t offer any training or support about investments and stocks.
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Term & Renewal
Because it is not an actual franchise, you can’t have any contract with them.
You can have a membership with the Costco Warehouse Club, which renews once a year for $120.
Comparison Franchise: Costco VS Sam’s Club
| Company | Costco | Sam’s Club |
|---|---|---|
| Founded | 1983 | 1983 |
| Number of Outlets | 840 | 599 |
| Membership Fee | $120 per year | $50 per year or PLUS: $110/year |
| Franchise | NO | NO |
| Finance | 37.5 billion USD | 9.7 billion USD |
Costo Franchise: FAQ
Is Costco a Franchise?
As we’ve mentioned, Costco isn’t a franchise. The only one who can open a Costco retailer is the Costco Corporation itself.
What is Costco Known for?
Costco is known for having hundreds of warehouses open all around the world and for its incredible discounts.
How many Outlets of Costco are there currently?
Costco currently has 840 open warehouses spread over 14 countries.
Amit Gupta is the founder of DrFranchises – a digital marketing agency that helps brands rank better on Google Maps through local SEO strategies. Amit has over 11 years of experience in digital marketing, SEO, email marketing, and social media marketing. He’s also the owner of multiple franchises and has helped countless brands achieve success online. When he’s not working, Amit can be found playing with his dog.