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How Much Does It Cost to Open Forever21 Franchise?

Do you want to start a Forever21 franchise and want to know the fees, agreement, details? If YES, here’s how much it cost to buy a Forever21 franchise for sale. The apparel industry consists of companies that design and sell clothing, footwear and accessories. Their product categories include everything from the basics, such as underwear, to luxury items, for example, cashmere sweaters and alligator-skin handbags.

Apparel companies are known to be differentiated into two, the wholesalers and retailers. The wholesalers sell large quantities of goods to retailers, which then mark up the items and sell them to consumers at a profit. But in today’s apparel market, it has become more difficult to draw a line between wholesalers and retailers as most apparel companies now have both types of operations, including Forever 21.

The apparel industry is a very lucrative industry because everybody has a need for clothing. Clothing in this sense is not just the basic necessities needed to stay warm, but to appear fashionable and chic.

Despite the current global economic downturn, the global apparel industry has continued to grow at a healthy rate, and the industry is of great importance to the economy in terms of trade, employment, investment and revenue generation.

Revenue in the Fashion segment came to $521.5m US Dollars in 2018, and this same revenue is expected to show an annual growth rate (CAGR 2018-2022) of 11.0%, resulting in a market volume of $790.5m US Dollars by 2022. Forever 21 is one of the well-known garment companies that are making waves in the world today. Read on to know more about the industry.

Buying a Forever21 Franchise and How Much It Cost

Industry overview

  • Business established – 1984
  • Headquarters – Los Angeles, California, U.S

Forever 21 is an American retail chain that got numbered as 122 in one of Forbes list of biggest private companies in the USA. With headquarters in Los Angeles, California, the company has more than 480 branches all over the world and its sales were pegged at $3.7 billion in 2013.

The Forever 21 story can be said to have started in 1981, when Jin Sook and his bride, Do Won “Don” Chang emigrated from South Korea to Los Angeles in search of the most famed American Dream. For three years, he worked as a janitor, pumped gas, and served coffee to make ends meet. Then one day, after having observed a lot of people in the course of his duty, he came to an exciting conclusion.

“I noticed the people who drove the nicest cars were all in the garment business,” Don told the LA Times in a 2010 interview.

In its first year of operation, their sales totaled $700,000, and as of February 2014, Forever 21 generated a revenue of $3.8 billion. Originally, Forever 21 only sold clothes for women, but later expanded to sell menswear. Most Forever 21 stores now sell clothes for men and women, including plus size clothing for women.

The Forever 21 brand has battled several controversies in the past. In September 2001, the Asian Pacific American Legal Center and the Garment Worker Center, and workers’ advocacy groups, filed a lawsuit against Forever 21, charging them of violating labor practice laws.

They claimed that their contracted workers received less than the minimum wage, that the hours on time cards were reduced, and that workers who complained to the state were fired. They also asserted that the employees endured working conditions that were more like working in a sweatshop.

Forever 21 denied the accusations, saying that it was committed to fair labor practices and that “none of the workers named in the suit were directly employed by the company.” Nevertheless, a three-year boycott of Forever 21 was held throughout the United States by the garment workers and this movement was captured in the Emmy Award-winning documentary, Made in L.A.

The charge against the company was dismissed by U.S. District Court Judge Manuel Real, but Forever 21 went ahead and responded with a defamation suit in 2002 in order to get back its dignity. In January 2012, another case cropped up when Five Forever 21 employees filed a class action lawsuit declaring they were not compensated for the time they worked during their lunch breaks and the time spent on bag checks.

In August 2012, Forever 21 got a subpoena order when the Labor Department found that some of Forever 21’s suppliers had violated various federal laws on wages and record keeping.

Again, according to Forbes, 50 copyright violation lawsuits have been placed against Forever 21. Diane von Fürstenberg sued the retailer insisting it copied four of her dresses. Gwen Stefani, Anna Sui, and Trovata are among the designers who have also taken action against the retailer.

On January 8, 2015, Canadian media reported about a local, family-owned business in Richmond, British Columbia, called Granted Clothing. It said that their sweater designs had been stolen and mass-produced for sale on Forever 21’s website. In April 2015, both parties resolved the matter on “amicable terms”, by settling out of court.

On January 28, 2015, software developers Adobe, Autodesk, and Corel filed a joint lawsuit against Forever 21 for allegedly using unlicensed copies of Photoshop, AutoCAD, and PaintShop Pro, respectively.

In April 2010, Rachel Kane, a writer and a Forever 21 customer created a blog with the domain name Kane posted pictures of some Forever 21 items and voiced her opinions about the clothings. The blog’s popularity rose after being featured on the Jezebel blog and in June 2011, the retailer asked the blogger to take the site down or she may face a lawsuit.

Forever 21 has remained a family business since its inception, with Don serving as CEO and Jin Sook as chief merchandising officer. Their two daughters also play an integral role in the company. The elder, Linda, manages marketing, while Esther oversees the brand’s visual elements.

Today, the fast-fashion retailer brings in roughly $4.4 billion in sales from over 600 stores, and the Changs have an estimated net worth of $6.1 billion, according to Forbes.

  • Forever 21 Franchise Information

Till this present date, Forever 21 prides itself as a family owned company and it runs its business as such by keeping everything in the family. For this reason, the company is among the few that does not offer franchise. The company prefers to stick to its way of growing independently by launching stores on its own. The chain went ahead to state in its official website that it won’t franchise its business in the future as well.

The conclusion therefore is that Forever 21 leaves no chance for aspirants scattered throughout the world to become its franchisees. However, the company can offer to sell the rights of a particular country or region to someone for business expansion. This is because the company’s strategy of expansion is through corporate stores only.