PLAY N TRADE Franchise Warning

September 4, 2009 Franchise Publicity

Play N Trade video game franchise continues to draw fire on the Unhappy Franchisee website, with the number of contentious comments on one lively blog post (PLAY N TRADE: CA Suspends PnT Franchise Registration) approaching 500.

One commenter claims that there are an enormous number of what’s called SNO (Sold, not Open) Play N Trade franchises due to the sale of multi-unit packages. However, the commenter contends these stores may never open due franchisees being disillusioned with their initial store and declining to open the additional stores they purchased the rights to develop.

On September 4th, 2009, Insider Knowledge wrote:

Here is why there are many purchased, yet unopened Play N Trade franchises. First off, as a former PNT Store Owner, a lot of people bought the hype and purchased a 3 or 5 pack of stores. Many opened 1 or 2 stores and found it was not profitible. I know of one franchisee in CA who bought around 7 stores and then decided he did not want to go further and opened none of them due to buyer’s remorse.

I purchased 1 store to see if it was worth it and quickly found out it was not. After more than two years of them telling PNT Corporate telling me I was not doing this or that, I found it was a losing battle and PNT Corporate was not equipped to be competative against the big guys. Games were consisitantly on site after the release date, we did not have access to bonus exclusives like GS or Best.

We were also told it would take only 100K to start the business and now its up over a 250K within 1 year. That was setting up franchisees to fail. Then PNT Corporate turned their back and blamed those who did not have enough capital to run their stores and told them to sell or they were failures. People were given false expectations based on a faulty projections “approved” by Play N Trade Corparate, or should I say, T-Street, or CAAZ Management, San Clamente Captital or whoever was holding our Franchise fees.
Buyer Beware!

How believable are the claims made by anonymous posters? After all, they could just be competitors or disgruntled ex-employees, right?

In my opinion, you should consider the anonymous comments the same as you do positive franchise sales hype: as a starting point for your own research and investigation. In this case, the commenter makes several claims: that the “franchise store numbers” are inflated by counting stores that will never open, that multi-unit franchisees are not opening stores beyond their first, that PnT is not able to compete on new releases with Gamestop, etc. and that Play N Trade has a history of underestimating start-up costs.

No matter who the anonymous commenter is or what his/her motives might be, he’s provided a list of very important issues to investigate during the due diligence process.

And few can argue with the parting advice. In selecting a franchise opportunity, the buyer should always beware.