Selling things for under $5 to teenagers may not appear to be a prescription for explosive growth, but Five Below has made it a very lucrative approach.
Five Below is a fast-growing discount shop specializing in trend-forward, high-quality items that appeal to tweens, teens, and adults alike.
Keep reading to know more about if Five Below is a franchise, and if yes, how much does it cost to open one, and what are the other requirements to get hands with this business?
About The Five Below
Five Below Inc. is an American specialty discount retail business that offers items for as little as $5 and a small selection of items from $6 to $25.
It is one of the most well-known retail chains in the United States, offering a wide range of products and being a discount store with hundreds of items at far lower costs than its rivals.
This is why the Five Below shops are always busy. Five Below is one of the dollar stores performing well recently.
Comparable sales at Five Below climbed by 2.7 percent in the second quarter of 2018.
History Of Five Below
On October 4, 2002, David Schlessinger, the inventor of Encore Books and Zany Brainy, and Tom Vellios, the former CEO of Zany Brainy, established Five Below.
Due to the COVID-19 outbreak, Five Below declared the temporary closure of all stores on March 18, 2020.
Nevertheless, as of May 29, 2020, 75% of Five Below locations in the United States were restored, with intends to launch more sites.
Five Below Franchise Model
|Does it Franchise||NO|
|Area Requirement||8,000 square feet|
Why Do The Five Below Succeed?
Profitable Store Expansion
Operating lucrative stores is essential to an excellent retail enterprise at its basic level.
Five Below quickly increases, leading to problems for shops that expand too quickly.
Over the previous six years, however, Five Below has tripled its store count while increasing its net income by 650 percent.
With a forward cost ratio of 45 times, management aims to open up 2,500 stores, making investors excited about the stock.
The corporation removes all costs from the supply chain to deliver as close to the source price as feasible.
They even deflate basketballs to ship them with less weight and packing.
This enables Five Below to sell an excellent item at a low price and extend its product ranges over time.
Five Below couldn’t offer the Bluetooth speaker for less than $5 five years ago, but it now generates over $1.5 billion in sales thanks to its increased size, which allows it to bargain better with vendors and procure goods in bulk, lowering the cost per item.
A Powerful Combo Of Cheap And Fun
Five Below is renowned for being a pleasant place to shop for various reasons.
The stores are simple to traverse, with spotlights and storage that allows shoppers to see the entire store. Shopping in a store also has a treasure-hunt feel to it.
Management keeps a close eye on what youngsters are interested in and keeps inventory up to date based on current trends.
Teenagers return to Five Below because the retailer encourages them to do so. Five Below is a toy store for children too old to go to one.
Cheap things facilitate impulse purchases, and the store nearly invites customers in by convincing them to ask themselves What else can I purchase for $5?
Five Below Comparison
|Initial Investment||$300,000||$50,000 to $1,000,000|
|Estimated Annual Revenue||$2.91 Billion||$78.748 Billion|
Frequently Asked Question
Is it possible to return to item five below?
Your Five Below purchase* can be returned to any store location, whether it was made in person or online.
Is there anything over five below at Five Below?
Everything at Five Below costs $5 or less, making it a popular store.
Who is the CEO of Five Below?
Anderson, Joel D.
Does Five Below offer a Franchise opportunity?
No, Five Below doesn’t offer franchises of their stores and is corporate-owned.
How much does a Five Below Franchise Cost?
As mentioned above, Five Below does not offer franchises. Therefore, no information is available related to the cost of the Five Below franchise.
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.