Do you want to start a Zara business franchise and want to know the fees, agreement, details? If YES, here’s how much it cost to buy a Zara franchise for sale.
The clothing retail industry is growing at a very fast rate, especially in the United States, and it has proven to be an excellent business opportunity for entrepreneurs who are willing to start a clothing franchise business.
Why Buy a Zara Franchise?
Zara is one of the leading brands as far as retail clothing is concerned as its brand Inditex, now makes 840 million garments a year and has around 6,500 stores in 88 countries, though that number is always changing because Inditex has been known to open more than a store a day, or about 500 stores a year.
Right now there are around 4,400 stores in Europe and almost 2,000 in Spain alone. Right from inception till date, Zara has proven to be a very viable and profitable brand, and so if you are interested in owning a Zara franchise, here is all you need to know about the company and how its franchise works.
Buying a Zara Franchise for Sale and How Much It Cost
Zara is one of the largest international fashion companies that belong to Inditex, one of the world’s largest distribution groups.
One of their unique selling points is that they have their customers at the heart of their unique Business model; which means that their customers interests are taken into account during the design, production, distribution and sale of their products through their extensive retail network.
Zara offers men’s, women’s and kids’ clothing lines. They also have cosmetics and various beauty products, fashion accessories, bags and shoes on retail. The company prides itself in being in control of its business from the design aspect, manufacturing and distribution of the products right down to the supply chain.
Their men and women’s clothes are divided into Lower Garments, Upper Garments, Shoes, Cosmetics and Complements, as well as clothing for children known as Zara Kids. There are also Zara Home and Zara Home Kids stores that sell furniture and home textiles, which are also owned by Amancio Ortega and Inditex.
The current price range for their clothes varies depending on the garment, but simple t-shirts and tops can cost around $25 to $40 while jackets and dresses can be anywhere from $100 to $200.
Zara Franchise Information
In order for you to become a franchisee of Zara, there are certain things you should know first such as the cost of actually opening a Zara store. Since Zara is present all over the world, their franchise fee varies but the average amount is around $30,000.
Other notable fees a potential Zara franchisee should take note of include;
- Equipment, furniture and fixtures – $50,000
- Royalty fee – 5 to 10%
- Advertising fee – 3% of the total revenue
- Total initial investment – $80,000
Other franchise offerings and benefits include full access to corporate services such as human resources, training and logistics, all at no extra cost.
Since Zara is a clothing company, its competitors would typically be any major clothing company like American Apparel or Topshop. However the companies whom they compete with the most are Uniqlo, United Colors of Benetton, Mango, and H&M. But it should be remembered that Zara is a vertically integrated retailer, which makes the business more cost effective and efficient, and gives it an edge over its competition.
Length of Time for Zara Franchisees to Start Profiting
Depending on the location of the store, Zara franchises are famed to start profiting from the end of the first year of setting up shop. Since Zara stores are typically set up in highbrow locations, they can easily attract customers with the required purchasing capital, thus making it easier for the store to break even in record time.
Personal Traits Required from a Zara Franchisee
- Hardworking: anyone intending to join the franchise must be a hard worker. This fact is not negotiable for the company because it prides itself on providing excellent services at all times, and any franchisee that provides anything less risks tainting the image of the company, which would in turn affect other franchisees negatively.
- Be your own boss: an intending Zara franchisee must have a desire to work for him or herself. He must have the desire to run a business as well as the ability to take it to profitability.
- Good communication skills: an intending franchisee should be able to communicate efficiently with his or her customers.
- Be a team builder: the person must have the ability to work as a team, as well as be able to coordinate his or her workers.
A Brief Overview of Zara Franchise
- Founders – Amancio Ortega and Rosalía Mera
- Date of Incorporation – 1975
- Headquarters – Spain
Zara is a Spanish fast fashion (clothing and accessories) retailer that is based in Arteixo, Galicia (Spain). The company was founded in 1975 by Amancio Ortega and Rosalía Mera out of a small nondescript cloth making shop. It is the main brand of the Inditex group, the world’s largest apparel retailer. The fashion group Inditex also owns other brands like Massimo Dutti, Pull&Bear, Bershka, Stradivarius, Oysho, Zara Home, and Uterqüe.
Most of the products Zara sell are manufactured in nearby countries like Spain, Portugal, Turkey and Morocco, which is unlike their competitors who outsource all their production to Asia. Though Zara has exceptions as clothes with a longer shelf life, such as basic T-shirts, are outsourced to low-cost suppliers, mainly in Asia.
In 2015, Zara was ranked 30 on Interbrand’s list of best global brands, and by 2017, Zara was known to manage up to 20 clothing collections a year. Zara is currently valued at $11.3 billion and Amancio Ortega is one of the richest men in Europe and the wealthiest retailer in the world with a net worth of $69.8 billion, and he earns more than $400 million in dividends a year.