Entrepreneurs and store owners often want to know how to buy a Redbox franchise. The answer is: Redbox does not sell a Redbox franchise nor can anyone buy a Redbox kiosk.
It’s easy to understand why an entrepreneur or store owner would be interested in owning a Redbox franchise. But, it’s also easy to understand why Redbox has no interest in selling their kiosks or a Redbox franchise.
A Redbox franchise would be an attractive business opportunity to consider. Redbox kiosks are extremely profitable and managing a DVD kiosk business requires very little time. So, not only is there a great ROI, there’s also a very strong “ROT”, or “return on time”. A Redbox kiosk that’s been installed at least one year will generate over $60,000 / year. There are thousands of locations that generate well over $100,000 / year. To manage a Redbox kiosk or any DVD kiosk business requires as little as one hour per week. And, for an owner-operator entrepreneur or store owner, a movie kiosk that generates over $60,000 in revenue should earn over $50,000 / year in gross profit. The movie rental kiosk business can be very profitable and if a Redbox franchise existed with that type of profitability, it would be one of the most profitable franchise opportunities of all time.
It makes sense, then, why Redbox wouldn’t sell their kiosks. Why would Redbox, or more accurately, Outerwall, the parent company? The per location startup costs for a movie rental kiosk are low, the labor required to manage the business is extremely low, and the profits can be very high.
Movie Kiosks Drive Store Traffic
For a store owner, buying a Redbox franchise is a natural consideration because movie kiosks are proven traffic generators in two ways. A movie rental kiosk will cause existing customers to visit the store more frequently because they have to return rented movies. And, the one thing that is sure to attract new customers is a movie and game rental kiosk. It always does; it never fails.
Entrepreneur-Friendly Without Being a Redbox Franchise
Entrepreneurs are constantly looking for new business ideas and thinking about how to start a business. So, when an entrepreneur continually sees lines of people waiting to rent a move from a Redbox kiosk, a light bulb goes off. An entrepreneur only has to bump into a business opportunity so many times before s/he realizes, “Hey, this movie rental kiosk business looks like a money-maker”. The good news is that the DVD kiosk business requires a low capital investment, no special skills, and very little time to manage.
Because entrepreneurs are often looking for help developing a business plan and assistance with how to start a business, franchising can be appealing. The good news is that working with the right partner in the movie rental kiosk business, an entrepreneur or store owner can get all the support and training typically offered by a franchise. Outpost Retail Systems offers full training, support and a turnkey business setup. Its management helped launch the industry in 2003 and their experienced guidance is readily offered to entrepreneurs and business owners. Its world-class movie rental kiosk systems and software are unparalleled in the industry, evidenced by a 2 year warranty.
Below, hear how the kiosks performed in prolonged sub-zero temperatures:
In sum- You can’t buy a Redbox franchise. But, you can easily get into the profitable Redbox business by working with a reputable partner in the movie rental kiosk industry.
Planning to work from home to build a small business? Better do your homework!
Here’s a start at a work from home, small business readiness checklist for entrepreneurs:
1. How will you market your home based business offering(s)? Before people will buy what you’re selling, they need to be made aware of it, and be convinced of the reasons they should buy (features and benefits).
A small business that is a home based business won’t have a shingle outside to grab even a few curious passersby. Remember the marketing continuum: Awareness – Interest – Trial – Loyalty.
2. What will you sell? Home based businesses have the luxury of being a micro small business with low overheard, but with web sites and internet marketing, they don’t have to look like bedroom businesses. But, you still have to determine what will your small business sell. Options for any business, whether a home based business, a franchise or any small business will basically be:
• Stuff you make
• Stuff you buy to resell at a profit
• YOU- your services.
3. Is there demand for what your small business is selling? How can you tell? One good tool to use is Google’s keyword planning tool.
4. How many hours per week will be required to be successful? How do you know?
5. How much startup capital do you need to finance your home based business? Are small business loans available?
6. What are your ongoing operating business expenses? What are your variable costs? What are your fixed costs? What is your breakeven revenue number? Small businesses and entrepreneurs may be more sales and marketing oriented than focused on accounting. And, especially for a home based business where the owner wears all hats, paying attention to the numbers is critical.
7. Will your small business have any support? A home based business often depends on the owner wearing most hats. What are your weaknesses? Will there be support for those areas?
8. Are there any particular tax benefits you can take advantage of with your specific home based business? For example, franchise fees are not deductible like equipment purchases are. See Section 179 of the tax code.
9. Is the home based business scalable? Can you start small and grow? What are the determinants? Costs? Employees?
10. Are there success stories? Is anyone else doing this business? If you will pioneer a new business idea, have you assessed potential demand for your new business idea?
11. Does this small business require employees?
Outpost Retail Systems sells Movie & Game Rental Kiosks as full business systems. Owner-Operators can be retail store owners, entrepreneurs, existing small businesses and new home based business startups. There are no fees like franchise fees, no royalties, and the equipment purchases are tax deductible (talk with your accountant). Full training is provided. Owners may brand the kiosks any way they’d like and can succeed working as little as 1 hour per week. Worst case scenario- If a location the Owner-Operator selects doesn’t hit revenue goals, the kiosk is easily moved to a new location. We believe that we provide the safety people associate with franchising, just without the expense and risk.
Movie and Game Rental Kiosks measure up very favorably against this small business checklist.
Franchising costs and poor information can cause high failure rates.
According to a recent Wall Street Journal article, entrepreneurs investing in a franchise may not be making the safe investment they think they are making!
Franchise default rates run as high as over 41%!
Factors would-be franchisees should carefully investigate include:
1) Total costs, including upfront franchise fees and normal startup costs for that specific business (e.g., equipment, real estate, etc.). Ongoing franchise expenses need understood.
Franchise royalties are an expense. And, some franchises require that supplies are purchased from them, providing yet one more income stream to the franchisor.
2) The financial disclosures? Is there a publicly traded entity whose revenue and profit numbers can be used as benchmark metrics?
3) How are franchising expenses treated for tax purposes? Are franchise fees tax deductible?
4) Exit options if the entrepreneur needs to get out of the business.
5) Remedy options if the business is not meeting hopes and expectations. The business isn’t succeeding, now what?
Let’s just look at the expenses associated with buying a franchise.
People may consider buying a franchise because they think franchising offers the following:
• There’s a set business plan and template, so everything is already figured out.
• The business concept, offering and model are proven. Even though people want to be entrepreneurs, reducing risk is always a goal.
• Entrepreneurs want to benefit from a known brand.
• Entrepreneurs want a turnkey business, including training.
The problem is that the safety many people think franchising provides comes at a high cost. And, ironically, the high expense burden franchises impose may actually doom an entrepreneur’s chances of success. No matter what the business is, if costs are too high and cash flow is too squeezed, failure is certain.
While costs range into the millions, “the majority of franchises run from about $50,000 or $75,000 to about $200,000 to get started.” Read Franchising.com’s article on costs here. →
In addition to the startup costs any business would incur for its specific business, entrepreneurs must pay a franchise fee. Then operating expenses are increased by ongoing royalties paid to the franchisor. Operating expenses may also be inflexible and higher than market rate because franchisees often must purchase supplies from the franchisor.
None of this is intended to bash franchising, as many have realized true success as franchisees. However, the truth is that there can be a lot of hype in the selling of the dream of owning your own business. And, sometimes, all the franchisee has done is bought him or herself a job- with lots of hours, responsibilities and liabilities… and not that much pay.
Outpost Retail Systems sells Movie & Game Rental Kiosks as full business systems. There are no fees like franchise fees, no royalties, and the equipment purchases are tax deductible (talk with your accountant). Full training is provided. Owners may brand the kiosks any way they’d like and can succeed working as little as 1 hour per week. Worst case scenario- If a location the Owner-Operator selects doesn’t hit revenue goals, the kiosk is easily moved to a new location. We believe that we provide the safety people associate with franchising, just without the expense and risk.
The two fundamental ways to increase sales at grocery and C-stores are to increase existing customers’ store trip frequency and somehow pull in new, fresh customers.
Obvious, right? So, how to do it?
There are plenty of great ideas out there, but let’s look at a couple simple ones:
- Selling drugs- Hey, people are addicted to coffee. What better way to pull people in than to have a coffee kiosk in your store? Hopefully, they’ll make your store their daily fix.
- Hot foods- People are busy, on the go. Make their lunches and dinners for them.
But, these aren’t fool-proof because the cash-strapped and/or time-poor consumer can always save money and a trip by making her own coffee and dinner and packing a lunch. They have cheaper, and maybe easier, options.
One offering that is fool-proof is movie rental. And, a Movie Rental Kiosk is, without question, the easiest way to offer a movie rental service at a store. A closer look reveals:
- The consumer needs to return the movie after it’s been watched. Each rental trip generates another return trip. So, each movie rental may be responsible for two trips. But, even if the rental was coordinated with a store trip, it’s definitely generating one additional trip that otherwise would not be necessary.
This equates to store trip frequency increasing. It’s simple math, and store and consumer surveys have proven it.
- Every retailer has pretty much what every other retailer has. OK, try to differentiate here and there; try to focus on good customer service… That’s all well and good. But, how can a store really, truly, factually stand out?
Well, if Store A has a DVD Kiosk and Store B doesn’t have a Movie Rental Kiosk, that’s a glaring difference. All the consumers wanting America’s # 1 entertainment choice will make a trip to the store with the Movie Rental Kiosk.
And, they’ll make a second trip to return the movie. Now, that store has a great chance to win them as a loyal customer!
- Honestly think about it- How hard is it to pull a consumer away from their habitual travel patterns and stores they visit to try a new store that may not be convenient to their travel patterns? It’s extremely difficult to do. DVD Kiosks do it easily.
Outpost Retail Systems provides turnkey DVD Kiosk service packages to retailers who want Movie Rental Kiosks at their stores.
Store benefits include:
- Potentially dramatic increases in sales due to increased trip frequency and attracting new customers.
- In as quickly as a few months, a large percentage of an area’s population will become customer renters of the Movie Kiosks. We regularly see rates over 33%.
- Differentiate against competition and / or keep up with larger stores that have Redbox Kiosks.
- Fast ROI, payback. Not unusual to earn back total startup investment within one year.
- Annual profit per DVD Kiosk, based on industry average revenue per Redbox kiosk, would be in the $40,000 range.
- Easy, trouble-free operation.
- Along with food, the store will provide the # 1 entertainment staple: movies.
- Cross-marketing: “Buy a pizza and two-liter soda and get a free movie”. Earn shopping points good for free movies.
- Movie Kiosks also enable the retailer to capture customer emails. Typical opt-in rates for customers to provide their emails exceed 35%.
If fear is holding you back from starting a company, you’re not alone. (Check out the article below.)
But, when it comes to being scared away from starting your own business, keep in mind that getting ahead in life, being in control of your own destiny and schedule, and having the chance of accomplishing something out of the ordinary requires taking action. Everyone has ideas and dreams; unfortunately, ideas without action never accomplished anything.
A good technique for evaluating options and risk is to focus on worst case analysis. Too often, people get caught up in “best case dreaming”. It’s motivating to visualize possibilities, but if you objectively list the worst things that can happen if you actually start a company and you can live with that worst case scenario, well, you’ve just proved to yourself that the risk isn’t terminal. In the case of deciding whether to launch a business of your own, worst case analysis really boils down to the costs incurred if the business fails. And, there are two areas of cost: opportunity costs and hard costs. Some people might also worry about looking foolish because they tried something. But, if someone worries about that, they’re probably not cut out to be an entrepreneur anyway. Staying in a safe and limiting job and never trying to do more will certainly be more “normal”.
The opportunity costs associated with starting a business include: time, resources and money that could have been devoted to other things. Hard costs are simply the actual financial costs of launching a business.
If you invest one year of your life trying to build a business and it fails to hit your goals, you’ve invested 1-2% of your working life. That’s not a big risk. And, remember that although it didn’t work out, you would have undoubtedly learned some invaluable lessons you would not have otherwise experienced. With most startup businesses, you will know within a year if you’re onto something. With a Movie Kiosk business, you will know if your location is a winner within 2 – 4 months.
As for hard costs, if you start small, you limit any possible downside. And, if you have assets or a business that can be sold if you choose to exit the business, it’s not a total loss.
Check out the article below for another perspective on why people should seriously look at what to do to start a business of their own.
<a href=”http://www.linkedin.com/today/post/article/20130318143953-1714080-is-fear-stopping-you-from-starting-a-company” rel=”nofollow” target=”_blank” >Reference article on LinkedIn</a>
The American middle class is no longer the richest middle class in the world.
So say the authors of an April 22, 2014 NY Times article. Data can often be interpreted in several ways to reach a variety of conclusions. We won’t touch on the politics of the topic, but one thing struck us here at Outpost Retail Systems- Possibly the best way for people to increase their earnings, income potential and help themselves and their families is to start a business for themselves.
If someone feels stuck or limited, maybe the best way to get ahead is to take a step forward.
Ask yourself questions like: What’s the best business to start in my area? Should I buy a business or start a business? What skills or assets (Time is an asset.) do I have that I can use to help me be in business for myself?
If the job market isn’t or hasn’t provided the income you want, decide to start a business and work for yourself. This can be done as a side business, so you can continue to earn your regular paycheck, if you have one. Or, a person could dive in and start a business as a full time startup, assuming they have enough money saved to cover their home and business operating expenses until the new business can break even and earn enough profit to cover basic, necessary expenses. Maybe a spouse’s income could be the cash flow bridge needed until the new business startup is profitable.
One thing that stood out more than anything in the article was that the median per capita income was only $18,700 in the United States in 2010. Earning that much in a side business is very doable.
For those with very little startup capital, businesses to start with limited money include: landscaper, property manager, senior helper. Examples of businesses to start that require only small amounts of funding include micro-retail offerings like food carts and retail mall carts. A Movie & Game Rental Kiosk business can be started for under $23,000, and Owner-Operators are seeing that investment being earned back in the business’ first year of operation working only one hour per week. And, it’s not unheard of to generate over $40,000 / year in profit with one kiosk. All these businesses can be started small and grown.
The bottom line is that in life we have to play the hand we are dealt. Oftentimes, the best way to make a change for the better, is to make a change. Start a business- what’s the worst thing that could happen? We recently were sent a quote attributed to Shirley MacLaine: “Don’t be afraid to go out on a limb, it’s where all the fruit is.” Well said!
Recently, one of our DVD rental kiosk franchise owners in Cadillac, Michigan sent us a video showcasing one of his machine operating in sub-freezing temperature during Michigan’s cold winter months. Check out the video below showing our DVD kiosk braving some tough winter weather.
Our outdoor DVD movie kiosks can be configured meet the needs of any environment. Designed by veteran industry leaders, we can custom build any model in numerous configurations. For more information about product specifications, please contact us.