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10 Best Pawn Shop Franchises [Cost, Fees]

Do you want to start a pawn shop franchise but lack ideas? If YES, here are 10 best profitable pawn shop franchise opportunities for sale and their cost. A pawn shop is a business that offers secured loans to individuals from all walks of life, and the loans are given after collecting personal properties as collateral. Pawn brokers make money on the interest charged on the loans secured against pledges or pawns.

The word pawn was derived from the Latin word Pignus meaning pledge, and the items to be pawned to the brokers are called pledges or pawns, or simply collateral. Yes, many items are accepted as pawns, but pawnshops typically accept jewelry, musical instruments, home audio equipment, computers, video game systems, televisions, cameras, power tools and other relatively valuable items as collateral.

In the event of a loan default, the pawnbroker takes possession of the item and can recoup the loan value through outright sale of the item. A pawnbroker can also sell items that have been sold to them by customers.

In some states in the United States, pawnshops with firearms license are allowed to sell pistols and rifles to customers who meet state and federal acquisition criteria. Other popular items that can be pawned include gold, silver and platinum, even broken jewelry of little value.

Because of their versatility, a lot of people depend on independent pawnbrokers to help them meet their daily financial needs. Pawnbrokers keep the electricity on, keep the landlord away, fuel cars and pay for other utilities by providing a safety net to over 30 million Americans.

If you want to be part of this lucrative industry through owning a franchise, here are 10 best pawnshop franchises to acquire in the United States.

10 Best Pawn Shop Business Franchise Opportunities for Sale and their Cost

1. Cash America

Cash America is a local store that provides a convenient way for people to exchange their items for cash. Here, customers can sell thousands of different categories of products and items. Cash America brought tremendous changes into the pawn industry with its modern buildings and business practices.

Cash America has more than 500 locations throughout the nation, and the company is still growing and expanding. Cash America is an established and recognized franchise in the pawn shop industry. The cost of acquiring the franchise varies depending on the size and location of the store.

  • Start up cost – $200,000 to $300,000

2. Money Mizer

Money Mizer, founded in 1980, is an attractive, spacious, orderly store that sells both new and used products. They have a section dedicated to new and pre-owned jewelry, sporting goods, computers, cameras, antiques and a wide variety of goods.

Because of its size, organization and standardized CAD design prototype which assures visual consistency and grand recognition synonymous with high end rental stores, Money Mizer attracts customers who do not typically frequent more traditional pawn shops.

To own a Money Mizer franchise, you would require;

  • Liquid capital – $150,000
  • Net worth – $300,000 to $500,000
  • Total investment – $260,000 – $950,000

3. Port City Trade Pawn Shop

When you buy this franchise, you would get a 150 page plus pawn shop manual, 2 weeks hands on training in a real pawn shop in order to acquire experience in buying and selling gold and other things of value. The investment required to open a Port City Trade franchise is between $100,000 and $380,000.

  • Initial fee – $30,000
  • Royalty fee – annual licensing renewal fee – $2,500
  • Terms of agreement – 10 years

4. God’s Silver Money

This company is one of the largest modern coin dealers in the United States, with headquarters in Indianapolis, Indiana. God’s Silver money collects and sells gold and silver, currency, precious metals, old coins etc. The company is known for exceptional talent and world class service, extremely competitive pricing and it’s ability to provide its clients with a wide range of numismatic choices, while offering only the best certifications with the best numismatic collectibles.

Total investment – $125 and above

5. Gold and Silver Refinery

Gold and Silver refinery started operation over 30 years ago, and they accept gold and silver items from the public and sell same.

  • Initial investment – $25,000
  • Initial fee – $15,000
  • Royalty fee – $10,000
  • Advertising – 20 percent of royalty fee
  • Terms of agreement – 10 years

6. Pawn Castle

Pawn Castle is a pawn shop that sells and buys valuables and pays with cash. They can buy gold, jewelry, laptops, precious stones, old cash etc from people, and pay cash for them. In their franchise agreement, the franchisee owns 80 percent of the company and gives Pawn Castle 20 percent stock fund ownership to be invested back into the business.

  • Up front fee: $10,000
  • Monthly fee: 5 percent of gross

7. Castle Gold

This is also a company that buys and sells gold. Their core business includes buying gold, diamond, rental mart and pawning. They pay cash for scrap gold, silver and platinum. They operate three types of business models and all three have different startup costs.

  • Street retail business (walk-in) – $50,000 initial capital
  • Shopping center business (walk-in) – $100,000 initial capital
  • Free standing business (drive thru) – $300,000 initial capital

8. 1st United Pawn and Loan

This company pawns jewelry for cash, and equally provides loan to the public. They accept a variety of items as collateral. 1st United Pawn and Loan has been one of the most reliable financial institutions in greater Philadelphia since 1976. The company has been chosen by law firms and financial companies for numerous independent appraisals. 1st United deals in money, collectibles, precious gems, metal antiques, coins and more.

9. Countrywide Gold Buyers

This company was founded in 2006 and it started franchising in 2012. Countrywide gold buyers is mostly concerned with purchasing and recycling precious metals and diamonds.

  • Initial investment – $42,500 to $72,000
  • Net worth requirement – $80,000
  • Initial franchise fee – $29,900
  • Royalty fee – 6 percent
  • Veteran incentives – 15 percent off franchise fee
  • Units in operation – 16

10. Valley Goldmine

Valley Goldmine is another company that turns gold to cash. They buy gold, silver, platinum, jewelry, coins, bullion, dental gold, scrap gold, sterling silverware and lots more. They also offer high quality private consultations for customers who request it and their business standards are impeccable.

  • Liquid capital required – $20,000
  • Total investment – $19,565 – $47,105

Interesting Statistics About the Pawn Brokerage Industry

Statistics have it that one in 4 US households are under-banked or unbanked, and approximately 40 percent of these unbanked and under-banked households have used pawn stores. Annual revenue in the pawn industry has been pegged at $6 billion.

The pawn industry has enjoyed a period of conservative growth according to a survey carried out in 2015 by the National Pawnbrokers Association. The growth was associated to consumers releasing disposable gold during the peak gold price periods.

This survey result shows that there is a 3-5% increase in the overall business of pawn brokering, with pawn loans being the core of their businesses. Over 80% of pawnbrokers also corroborated the fact that pawn loans were the most common transactions that they carried out in their shops.

The reason for the growth can be associated to the fact that the pawn shops are consumer friendly and there has also been increased public awareness and a positive image of the business being portrayed to the general public. This way, they have been able to attract more customers hence the growth in the industry.

As at 2011, the pawn shops constituted a $14.5 billion market share and revenue have been forecast to grow at 6.3% to $19.88 billion in 2016. The national average pawn loan was $80 in 2008 and increased to $100 by 2009. In 2015, the national average pawn loan remains at $150 according to the report of the survey carried out by the National Pawnbrokers Association.

The industry employs about 28, 946 people with about 11,000 pawn shops in the United States. Jewelry sales have been accounted for as the most significant share of pawnbroker’s total receipts while the remaining sales are got from musical instruments, consumer electronics tools and sporting goods. 50% of revenue is derived from merchandise sales and 50% from pawn loans given out to their customers.