If you were on the internet for the last couple of years, you probably heard the frenzy about GameStop. Even before the frenzy, the company was big and was operating with over 4,000 stores. Due to the brand’s recognition, strong financial numbers, and popularity, you might have thought of owning a GameStop franchise.
Unfortunately, owning a GameStop franchise is not possible because the company doesn’t offer franchising. However, you can still opt for alternatives if you really want to be in the industry.
In this article, we will do a deep dive into GameStop, why they don’t offer franchising, whether they will offer it in the future, and show you some alternatives.
About GameStop And GameStop History
GameStop Corp, also known as GameStop, is the world’s largest video game retailer. They focus on consumer electronics and gaming merchandise in their stores and products.
GameStop was speculated to go out of business, but the company had 4,413 stores worldwide as of January 2023, and 2,949 of them were in the United States. GameStop was founded in 1984, initially with the name Babbage’s, and changed to its current name in 1999.
The company has never offered franchising in its history, and it currently also doesn’t offer franchising.
Similar brands like GameStop also mostly don’t offer franchising, mainly due to the nature of the business, but even though it’s limited, there are still some companies in the industry that offer it.
Franchise Model Table
| Cost Or Fees | Amount |
|---|---|
| Franchise | NO |
| Franchise-Fee | NO |
| Estimated Outlets | 4,413+ |
How Much Does It Cost To Open A GameStop Franchise?
GameStop is not a franchise business. All of their stores are company-owned, and they open their stores with their own funding. That’s why there is no cost associated with opening a GameStop franchise.
If the company decides to franchise in the future, it will share an expected investment number, but so far, there is no official information on this.
Why Doesn’t GameStop Offer Franchising?
The company didn’t make an official announcement about their decision not to franchise. Because of this, we don’t know the exact reason. Right now, all of their stores are company-owned and operated by the corporation.
Generally, companies don’t franchise to keep all the stores and revenues to themselves and easily manage the quality everywhere.
Entrepreneurs can still own a piece of GameStop by buying their shares on the stock market that they operate in. That is currently the only way for entrepreneurs to own a piece of GameStop.
Profit & Revenue
GameStop had a total gross annual revenue of $5.81 billion in 2023, according to the latest available report. This is a decrease from the previous year in 2022, when the gross annual revenue was $5.95 billion.
In the same year, the company didn’t make any net profit. They had a net loss of $130 million. This is still a somewhat better number compared to the previous year’s $520 million loss.
What Are Some Alternatives To GameStop?
GameStop might not be franchising, but there are many companies out there that offer similar services to GameStop. Due to the nature of the business, its competitors like Best Buy, Valve, or other brands also don’t offer franchising.
However, there are some companies franchising that work in the industry selling similar products. Here are some of them.
1. RadioShack
RadioShack is an American electronics store offering all kinds of electronic devices in their physical and online stores. They were founded in 1921 and started franchising in 1968.
The company went through a lot of changes over the years and finally declared Chapter 11 bankruptcy in 2015. They still operate but on a much smaller scale, and they were bought by Unicomer Group, which still owns it.
If you want to open a RadioShack franchise, you need to pay $39,900 in franchise fees. The total expected cost, including the franchise fee, is between $144,875 and $643,851. The royalty fee is 5%
2. Game X Change
Game X Change is one of the biggest American video game franchise companies in the United States. They were founded in 1992 and have been franchising actively since 1994.
Their specialization lies in selling new and secondhand video games, console movies, portable gaming devices, and accessories.
You need to make a total investment of between $150,000 and $200,000 to open one Game X Change franchise store. There are no franchise or royalty fees for this franchise.
3. Contender eSports
Contender eSports is essentially a gaming center focused on eSports, offering not only computers but also food, gear, and other similar gaming-related things.
The company was founded on the merit of franchising from the beginning to offer top-line equipment in each store and grow exponentially.
They also created a very detailed franchise model to attract entrepreneurs and make sure that they succeed.
If you want to become a Contender eSports franchisee, you need to be ready to invest between $195,980 and $406,030 in total. This includes the $39,000 franchise fee. In addition to that, there is also a 6% royalty fee to pay monthly from gross sales to the franchisor.
If opening a video game franchise appeals to you, consider Pacific Rim franchise as a viable option.
Comparison
| Name | Franchise Fee | Royalty Fee | Initial Investment |
|---|---|---|---|
| Disc Replay | $19,500 | 3% | $248,000-$638,000 |
| Play N Trade | $30,000 | 5% | $216,600-$329,000 |
| GameStop | NO | NO | NO |
Conclusion
Unfortunately, GameStop doesn’t offer franchising, and they never did. The reason why the company isn’t offering franchising is not clear, as they never made an announcement about it. However, there are many other companies in the market in similar industries that franchises.
If you are interested in the industry and still want to own a franchise even though you can’t own a GameStop, you can consider these alternatives. With these alternatives, you can still be in the industry and potentially make good money.
FAQs
Who owns GameStop?
GameStop is a public company, so the shares of the company are very scattered, and there are a lot of majority and minority owners. Over 27% of GameStop is owned by institutional investors. The current CEO owns 12%, and individual investors take up another 12% of the company’s ownership.
Is GameStop a public or a private company?
GameStop is a public company. You can buy their stock on the New York Stock Exchange (NYSE) under the ticker GME.
Can you franchise with GameStop?
No, you currently can’t franchise with GameStop because they don’t offer franchising.
Sources
https://en.wikipedia.org/wiki/GameStop