If you’ve ever been low on cash, chances are that you’ve been to a Dollar General Store. According to a study, about 75% of Americans live within a 5-minute distance from a Dollar General Store. But, do you want to own a Dollar General Store? Is Dollar General a franchise? Unfortunately, Dollar General doesn’t offer a franchising opportunity as of 2022. They only allow select people(those who are already managing or running one of their stores) to open a franchised store. But, you can still lease a Dollar store, provided you can afford to invest at least $150,000. Keep on reading to learn more about the Dollar General Franchise.
How Much Does The Dollar General Franchise Cost
Dollar General is not a franchise and they have made no public statement about how much it would cost to start a franchise with them. Generally, it costs somewhere between $10,000 and $150,000 to open a franchise. An investment of $75,000 to $ 150,000 is necessary to run a dollar store. This doesn’t include the liquid capital amount ( $ 200,000 at the very least).
Where Would All That Money Go
To open a Dollar Store, you will need to pay for:
- Franchise Fee
- Lease for the store
- Permits
- Taxes
- Cost of labor
- Store equipment and inventory
- Store operations and employees
- Stock to be sold
The cost of your store will also depend on its area in square feet. To open a Liberty Dollar store of about 1,000 square feet, you will need to invest at least $67,900.
How Much Money Does A Dollar General Store Owner Make
The owner of a Dollar General Store makes $139,514 annually (including base salary and bonuses).
How Can You Open A Dollar Store
There are three types of Dollar Stores that you should consider investing in:
- Just-a-Buck
This is a relatively expensive option if you’re just starting. You will need an upfront investment of $150,000 to $300,000.
You will also need to pay the franchise fee of about $50,000.
As a part of the franchise’s terms and conditions, you will need to offer a commitment of at least 10 years to the company whether you’re making profits or not.
- Liberty Dollar Store
This is one of the cheapest options available to start a dollar store. You will need to invest at least $25,000. $200,000 is the maximum amount you will need.In exchange for their franchise, you must pay royalties to them. You will benefit from the company’s advertisements. You and your employees will also receive support and training from the company.
How To Finance Your Dollar Store
If you can’t finance a dollar store, your first choice should be your friends and family. If borrowing some money from then is not an option for you, consider
- Banks (These have low-interest rates. Prepare a good business plan beforehand to get approval for a business loan).
- Lenders (These have high-interest rates but it is easier to get loans from them).
Conclusion
Dollar General is a privately-owned company and IS NOT A FRANCHISE.
While you can’t have Dollar General Franchise, there are other options in the market for you to open a Dollar Store. The general concept of a dollar store is to sell convenience items at closeout rates so low-income families can avail basic necessities. Millennials who like to stop and shop can also be your target audience.
A general premise of a Dollar Store is once people start shopping for quality items at cheap prices, it’s impossible to resist the temptation of buying more and more items. You can’t just stick to what you need. This is why selling branded items at cheap prices turn out to be a profitable business. You will need a minimum investment of $150,000 to run a Dollar Store smoothly.
FAQs
1 . Who is the target audience of Dollar General?
A . Dollar General has its stores in areas known as “food deserts”. Families with income less than or about $40,000 is their target audience. They open convenience stores in low-income demographics to offer branded and non-branded products at a heavily discounted price (called closeout).
2 . How much profit does Dollar General make?
A . Being one of the Fortune 500 Companies, Dollar General has quite a profitable business. In addition, it is counted as an essential service. Running a Dollar General has turned out to be recession-proof work. The company’s gross profit in 2021 was $10.719 billion. Despite the pandemic, their profits increased by 26.27% from 2020.
3 . Who owns Dollar General?
A . Dollar General was founded by JL. Turner and Cal Turner in 1939 in Scottsville, Kentucky. Kohlberg Kravis Roberts, GS Capital Partners, and Citigroup acquired it in 2007. Public investors can also purchase stocks from NYSEI.
