Target is an American merchandise retailer that is built on sheer hard work and is not an overnight success.
The company has 1,954 stores in the U.S. and makes billions in revenue each year. As such, Interested entrepreneurs might be wondering if Target is a franchise and how they can invest and reap the fruits of this successful company.
Franchising is a great way for businesses to expand themselves globally; take the example of McDonald’s, Starbucks, 7-Eleven, etc.- some of the world’s largest franchise chains.
However, not all companies like to go down this route. So what is a franchise? How is a franchise different from a corporation? What about Target?
Find answers to all of your burning questions in this guide!
What is a Franchise?
Before finding out if Target is a franchise, let us first understand what franchise means.
Franchise means when a well-established company allows other individuals to run their business and buy and sell products using its brand name.
So when a business starts franchising, it gives legal permission to the individual to sell products under its brand image, and in exchange for using their brand name, the individual pays a monthly fee known as a royalty .
Why Companies Franchise?
Franchising is a great way for businesses to expand and grow their business with minimum time and effort as opposed to running each location themselves.
By franchising, the business can leave the recruitment part to third parties, which saves a lot of time.
A franchise term lasts for ten years on average, so there is minimum risk of closure involved for the time being.
Additionally, businesses get more time to focus on other aspects of business growth, such as marketing, customer relationships, etc., while the franchisees are expanding to various locations globally.
How is a Corporation Different From Franchise?
There is a massive difference between a corporation and a franchise, as the two have very different business models.
A corporation is a legal entity that is distinct and separate from its owners. It is a business model that is owned by shareholders, funded by investments, and run by a board of directors.
In simple words, in this business model, if the parent company opens any store anywhere, it will be owned and managed by the parent company itself.
On the contrary, in a franchise business model, the business is owned and run by the franchisee as per the terms of the franchisor.
Is Target a Franchise?
No, Target is not a franchise and is run by Target Corporation instead. And with more than 1,900+ stores across the U.S., Target is classified as a general merchandise retailer.
Additionally, Target was known as Dayton Company before changing its name to Dayton-Hudson and then Target Corporation in 2000.
Target Revenue & Profit
| Year | Revenue (in billions) | EBITDA (in billions) | Net Income (in billions) |
|---|---|---|---|
| 2023 | $109.12 | $6.548 | $2.78 |
| 2022 | $106.005 | $11.588 | $6.946 |
| 2021 | $93.561 | $9.024 | $4.368 |
Target’s revenue for the last two years, 2022 and 2023, amounted to $106.005 billion and $109.12 billion, respectively, reflecting a growth rate of 2.94%.
The net income, which represents the profit, for the same period, was $6.946 billion in 2022 and $2.78 billion in 2023, indicating a decline of 59.02% in net income.
Target Business Owner Salary
The average salary for a Target business owner in the United States is approximately $102,281 per year, which is 20% above the national average.
Why doesn’t Target franchise?
Since so many successful chains, including McDonald’s- whose 90% of outlets are franchises- rely so heavily on franchising, you might wonder why it doesn’t target franchises.
There are a couple of reasons why Target does not offer franchising.
Target does not franchise because the company makes enough capital from its existing business and does not need to franchise.
Additionally, there is only so much that a franchisor can control when it comes to consistency in experience and service quality.
Target is built on sheer hard work; it has a strong brand image and customer trust and probably does not want to risk its brand image at the hands of anyone but its own hired employees.
Not to mention the cost to build and maintain a Target store costs millions which is way more than investing in a McDonald’s or Subway franchise.
Since it is also not practically possible for a huge number of individuals to put in that kind of investment, it makes sense for Target not to franchise.
How Can You Get Involved in Target?
Individuals cannot invest in Target via franchise since the company is corporate-owned.
It is, however, listed on the S&P 500 Index. So if you are crazy about Target and want to invest in the company, then investing in the Target corporation is the next best option for you.
Fast Facts About Target
- 75% of the American population live within 10 miles of a Target store.
- Shipt and Roundel is also owned by Target Corporation.
- Target has stores in more than 50 states of the U.S. and the District of Columbia.
- Target’s tagline, “Expect More. Pay Less.” has been in use since 1994.
- Brian Cornell has been the CEO of Target since 2014.
- Target’s headquarter is located in Minneapolis, Minnesota.
- In 2022, Target made $109 billion in total revenue.
((https://corporate.target.com/about))
Wrap Up
Target reached where it is today owing to its impeccable products and service.
The company doesn’t want to compromise on its years of hard work put in to create such a brand image and customer loyalty.
So the answer to your question, “Is Target a franchise” is that it is not.
FAQs
How many employees does Target have?
Target is among the top ten retail chains in America and is a firm believer in hiring employees rather than franchising its business.
As such, the target has over 400,000 employees working for them.
What is the cost of Target franchise?
Target does not offer a franchise, but if it decides to do in the future, then we estimate that a Target franchise would cost no less than a few million, with a Target franchise fee lying in the range of estimated $50,000 – $75,000.
How much can a Target franchise owner make?
Since Target is not a franchise but a corporation, there is no information available about the same.
Does target take afterpay?
Yes, Target takes afterpay for purchases made both offline and on Target.com.
Amit Gupta is an experienced expert in digital marketing and co-founder of DrFranchises. With more than 11 years of knowledge in franchise digital marketing, SEO, email marketing, and social media marketing, Amit has helped many brands achieve incredible success online. As a passionate entrepreneur and owner of 7 franchises, he continues to study franchise models, looking at costs, revenue, and profitability to guide brands toward profitable growth. When he’s not working on digital marketing, Amit enjoys spending time playing with his beloved dog.