Play N Trade Franchising Inc., a Newport Beach-based franchiser of video game stores, recently opened five in Utah with seven planned for Orange County.
“We have one in Guam, believe it or not,” said Ron Simpson, founder of Play N Trade.
Game storeowner turned franchisor Simpson said he’s sold the rights to 101 stores.
The stores sell new and used video games for consoles, such as Sony Corp.’s latest PlayStation 3 and Nintendo Co.’s new Wii (pronounced we).
Game stores are likely to get a sales boost from the two consoles.
Games go for about $60. Used ones are about $20.
Rockstar Games Inc.’s “Bully,” where players conquer bullies on the schoolyard, is one of the most popular, Simpson said.
The average gamer is more than 30 years old, he said.
“People think it’s just kids,” Simpson said.
Play N Trade stores host tournaments so gamers can play against each other.
Gamers like to brag about how well they’re doing, he said.
“It’s not meant to be a moneymaker,” he said. “It’s a market grab.”
Play N Trade is set to compete with GameStop Corp., which has more than 4,000 stores.
There’s plenty of other competition, including from independent stores, online games and Wal-Mart Stores Inc.
Play N Trade employs 14 people. Yakety Yak Holdings Inc., a wireless phone store franchisor, is Play N Trade’s sister company, Simpson said. The companies share expenses and operations.
Simpson said he finds prospective owners through “discovery days.” He takes about 15 to 20 people out on a Newport Harbor cruise and makes his pitch. He’ll tell them that two years ago he was bankrupt.
“Now I’m a millionaire,” he said.
Bankrupt?
“I failed miserably and went bankrupt,” Simpson said.
He started another franchise in Sacramento called Milestonz. Similar to 99 cent stores, he sold all jewelry in the store for $99.
“It was a good concept but in franchising you can’t have salesmanship as a big piece,” he said.
Expensive leases and low sales didn’t help either, he said.
“I had to profit $30,000 a month to break even,” Simpson said.
Play N Trade stores are set up to make money on relatively low sales, he said. Opening a store only costs about $100,000, according to Simpson.
He said he doesn’t look for MBAs “and all that baloney.”
Simpson, a game fan himself, said he wants the average person to be able to open a store.
Owners really have to like games, he said. Simpson also stresses what he calls “old school” customer service,knowing names and being friendly.
Simpson has big ambitions: He’s hoping to have 1,000 stores by the end of 2008 and 3,000 at the end of 2010.
Affordable Lexus
You may have seen the commercial.
The one where Lexus of Mission Viejo bills itself as the “affordable Lexus dealer.”
That’s affordable compared to others in the area, such as posh Newport Lexus in Newport Beach (though the ad doesn’t mention names).
The Mission Viejo dealership is looking for people “not to play golf but to buy a car,” said Chuck Chadwick, one of the dealership’s partners and chief financial officer.
The Lexus dealership is by no means a slacker.
“It’s a beautiful store,” he said.
The dealership is No. 10 on the Business Journal’s auto dealers list, the second largest Lexus dealer,in a tie with Lexus of Westminster,with estimated yearly sales of about $140 million.
Tustin Lexus, owned by David Wilson’s Automotive Group of Orange, is the largest dealer with $182 million in sales. Newport Lexus, also owned by Wilson, is likely to weigh in as the largest Lexus dealer on next year’s list.
But since Lexus of Mission Viejo isn’t dealing in golf or Tommy Bahama clothes,some of the offerings at Newport Lexus,it can sell cars at better prices, Chadwick said.
“We have more room to work with,” he said.
Old management is gone and the owners have taken back control of the dealership, Chadwick said.
“We want to do a better job taking care of our customers,” Chadwick said.
In the past couple of years, the dealership hasn’t been as focused on customer service as it should be, he said.
“The biggest thing is how we treat our guests,” he said. “I hate to be over simplistic but it really is as simple as that.”
