Redbox Franchise Cost, Profit & Failure Rate 2024

Redbox is a popular DVD rental kiosk franchise that has become an increasingly popular option for those looking to break into franchising. It offers customers the convenience of renting a movie with just one swipe, and it’s also relatively inexpensive to invest in compared to other franchises.

This article will discuss everything you need to know about Redbox franchising, including Franchise Fees, Profit Margins, Total Investment, Training Requirements, Restrictions & Regulations, Renewal Options, and Return on Investment. Knowing this information can help you decide if investing in a Redbox Franchise is right for you.

So read on to learn more!

Redbox Franchise

About Redbox

Redbox is a top movie and video game rental service provider in the United States. Gregg Kaplan founded it in 2002 while working at McDonald’s Corporation as vice president of strategy and business development.

In 2004, Redbox launched its first kiosks at select McDonald’s locations in Denver, Colorado. The concept quickly gained traction as customers embraced the convenience of renting movies on the go without waiting for delivery or driving to a store.

Since then, Redbox has grown exponentially, expanding its offerings to include more than 35,000 DVD titles and 8,500Blu-ray Discsacross 40,000 locations nationwide, including grocery stores, drugstores, convenience stores, and other retail outlets.

Redbox also offers streaming services through its website and mobile app, allowing customers to rent or purchase digital content such as movies, TV shows, and video games without ever leaving their homes.

In 2010, Coinstar Inc., the parent company of Redbox, acquired Blockbuster Express from NCR Corporation for $100 million. This acquisition allowed Redbox to increase its presence in over 8,000 locations across the country and expand its offerings by adding additional movie titles and video game consoles.

In 2012, Outerwall Inc., which owns both Redbox and Coinstar machines, acquired Verizon’s DVD rental business for an undisclosed amount. Since then, Redbox has been able to provide more than 700 different Blu-ray titles and more than 700 different video game titles and has released over 100,000 movies and video games since its inception.

Today, Redbox is one of the most recognizable names in the home entertainment industry. Its kiosks are easy to find and provide customers with an unparalleled selection of movies and video games.


Redbox Franchise Model

Cost Or FeesAmount
Investment$380,000 – $453,000
Franchise-Fee$49,500
IndustryFood
Area Requirement600 – 800 Sq.ft
Total Outlets26

Redbox Franchise Requirements

Redbox Franchise Requirements

It is private information. The Corporation has not made it public, you’ll only find out when you’ve applied for the franchise.

All requirements will be explained once the basic conditions have been met. Before investing, make sure that you are familiar with the current state of the company, as the rumor says that Redbox is going out of business.


Redbox Franchise Revenue & Profit

As per our research, Redbox generates $45,000 average revenue per kiosk, and with a profit margin of 30%, the take-home amount comes down to $3,452.

However, you must note that these are average numbers, and the revenue and profit of Redbox franchise owners could vary depending on their location and other factors.


Payback period Of Redbox

With an investment of $453,000 and an estimated 30% profit on the average net revenue, the yearly profit would be $13,500.

So, to find out how long it will take to earn back the initial investment:

Payback Period = Investment / Yearly Profit = $453,000/ $13,500= 33.55 years

Based on these figures, it will take approximately 34 years to pay back the initial investment for Redbox. This time period could be longer or shorter depending on your sales, revenue, and profit figures.


Failure Rate Of Redbox

Franchised Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
20195107+102
2020107163+56
2021163247+83

For the Franchised outlets:

  • In 2019, the growth rate was (102)/5×100≈2040%
  • In 2020, the growth rate was (56)/107×100≈52.33%
  • In 2021, the growth rate was (83)/163×100≈50.92%

According to the above-mentioned data, there is no failure rate for franchised outlets as the outlets at the end of the year increased during the span of 3 years.

We can see that the franchised outlets for Redbox grew from 2019 to 2021, showing a growth rate between 2040% and 50.92%.


Redbox Franchise Training Support

Redbox Franchise Training Support
  • The organization provides design and construction assistance to all franchisees.
  • Franchisees have access to a toll-free helpline provided by the firm.
  • For all of the company’s franchisees, there is also newsletter support.
  • Redbox supports the opening ceremony of a Redbox franchise location.
  • The company assists franchisees with local marketing.
  • All franchisees have access to online help.
  • Redbox gives material help to its franchisees.
  • The company provides ongoing training support to franchisees.

Popularity Of the Redbox Business Model

This franchise has a large user base because it already has the edge over competitors that provide similar services.

Most have used a Redbox rental machine, which is relatively simple to operate.

This franchisee places their DVD rental devices in high-traffic locations. The proprietors of these areas compensate for their services.


Challenges Of Ownership Of Redbox Franchise

Acquiring a Redbox franchise DVD rental machine does not guarantee you will make much money.

In the beginning, computers must be updated with movies. However, the movies stored in the machine take up space, and there is a limit on how many movies may be loaded.

It makes for much guessing regarding the movies that should be purchased and loaded.

There’s also the possibility that DVDs inserted into the rental machine won’t be rented out, resulting in a revenue loss due to low rental rates.

It can be a problem for the owner because it chooses which movies to load.

Due to the nature of the business, the ability to pay rent for these movies is never present to be questioned due to the computerized nature of the operations.

Entrepreneurs considering a venture into the retail franchise sector might explore options such as Foot Locker, Uptown Cheapskate, Five Below Franchise, Adam & Eve Franchise, and Bath & Bodyworks franchise.


Redbox Comparison

CompanyRedboxMac Tools
Founded In20031961
Initial Investment$380,000 – $453,000$109,000-$250,000
Franchise-Fee$49,500$8000
Estimated Outlet261,234
Annual Revenue$546 Million$220.0 Million

Frequently Asked Questions

Is the Redbox franchise profitable?

Yes, the franchise is profitable. 

Does Redbox offer franchises?

Redbox doesn’t offer Franchises, but they offer leases.

How much does a Redbox franchise cost?

Opening a Redbox franchise requires an investment of $380,000 – $453,000 and $49,500 as an initial franchise fee.

Who is the Owner of Redbox?

Redbox is owned by Apollo Global Management, an American private equity firm. The company was acquired in 2009 as part of a joint venture between Coinstar and Outerwall Inc., with the two companies owning 50% each. In 2013, Apollo Global Management purchased Coinstar’s portion of Redbox for an estimated $177 million. Since then, Apollo has been the sole owner of Redbox.

How many locations does Redbox has?

Currently, Redbox is operating 34,0000 kiosks nationwide. It is planning to increase the number of kiosks by 1,000.

Where is Redbox headquartered?

The headquarters of Redbox is located in Oakbrook Terrace, Illinois, United States.

Who founded Redbox?

Redbox was founded by Gregg Kaplan. He was the former CEO of the company.

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