Kid to Kid

## Executive Summary

Kid to Kid is a well-established childrens resale franchise founded in 1992 in Utah, specializing in buying and selling gently used childrens clothing, toys, and baby gear. With 117 franchise locations and nearly 30 years of franchising experience, Kid to Kid offers a proven business model in the rapidly growing resale market. The franchise requires a total investment of $326,502-$587,302 with average gross sales of $867,805 and estimated earnings of $104,137-$130,171. The resale industry grew 11% in 2023 and is projected to reach $73 billion by 2028, positioning Kid to Kid in a favorable market segment combining value, sustainability, and recession-resistant consumer behavior.

## The Business

**Concept Overview:** Kid to Kid operates retail stores that buy and sell gently used childrens items including clothing, shoes, toys, books, baby gear, and sports equipment. Parents bring in items their children have outgrown and receive cash on the spot or store credit, which can be used to purchase other items at bargain prices. This circular economy model serves budget-conscious families while promoting sustainability.

**Founded:** 1992 by Shauna Sloan in Utah

**Began Franchising:** 1994

**Headquarters:** Salt Lake City, Utah

**Business Model:** Retail resale with dual revenue streams - purchasing used inventory at low cost and reselling at markup. The buy-sell-trade model creates a self-sustaining inventory pipeline while building customer loyalty through the trade-in process.

**Target Market:** Budget-conscious families with children, environmentally-conscious consumers, and bargain shoppers seeking quality childrens items at reduced prices.

**Competitive Differentiation:** Specialization in childrens items distinguishes Kid to Kid from general resale stores. The focused inventory allows for deeper expertise in pricing, quality assessment, and merchandising for the childrens market specifically.

## The Numbers

**Initial Investment:** $326,502 - $587,302 (midpoint: $456,902)

**Franchise Fee:** $25,000

**Royalty Fee:** 5% of gross sales

**Marketing Fee:** 0.5% of gross sales

**Liquid Capital Required:** $100,000

**Net Worth Required:** $200,000

**Average Gross Sales:** $867,805

**Estimated Owner Earnings:** $104,137 - $130,171

**Estimated Payback Period:** 4.4 - 6.4 years

**Profitability Timeline:** Stores typically become profitable within 12-18 months, though new franchisees should not expect material income during the first year.

**Financing:** SBA loans and third-party financing commonly used; many franchisees finance 80% or more of total project cost. Veteran discounts available.

## System Health

**Total Units:** 117 franchise locations

**Franchising Experience:** 30+ years (since 1994)

**Geographic Presence:** United States plus international locations in Portugal, Spain, and Canada

**Training Program:** 79 hours total - 28 hours classroom training, 51 hours on-the-job training. Includes online training modules, corporate office sessions, and immersive experience in top-performing stores.

**Franchisee Support:** - Industry-leading training and onboarding - Robust library of online training modules - In-depth corporate office sessions - Hands-on experience in top-performing stores - Collaborative franchisee community for peer support

**Franchisee Community:** Described as a vibrant and collaborative community offering additional layers of connection and support beyond corporate resources.

## Franchisee Experience

**Positive Indicators:** - Strong franchisee testimonials highlighting community impact and business satisfaction - Collaborative franchisee network enables knowledge sharing and best practices - Comprehensive training program with multiple learning modalities - Proven systems developed over 30+ years of franchising - Mission-driven business combining profitability with community service

**Franchisee Testimonials:** - "I fell in love with Kid to Kid. The ability to give back to the community, help save the environment, and help families save money is why Kid to Kid is such an attractive business to own." - "The systems are great, but what has really made this journey amazing is that we have been able to rely on other franchisees. If we just had our thrift shop without the context and ability to see everybody elses successes, we wouldnt be able to be where we are now."

**Areas of Consideration:** - Retail operations require significant time commitment, especially during initial ramp-up - Inventory management in resale requires developed skill in assessing item quality and pricing - Location selection and lease negotiation critical to success - Competition from online resale platforms (Poshmark, ThredUp, Facebook Marketplace)

## Risk Assessment

**Key Risks:**

1. **E-commerce Competition:** Online resale platforms have grown significantly and compete for both inventory supply (sellers) and buyers, potentially affecting store traffic.

2. **Inventory Quality Dependence:** Business success depends on consistent supply of quality used items from the local community; poor inventory can impact sales and margins.

3. **Retail Real Estate:** Store performance heavily influenced by location; lease costs and terms represent significant fixed obligations.

4. **Economic Sensitivity:** While resale often performs well in recessions (as consumers seek value), severe economic downturns could reduce discretionary spending on childrens items.

5. **Operational Intensity:** Retail resale requires hands-on inventory assessment, pricing decisions, and customer service that differs from traditional retail.

**Risk Mitigants:** - Growing consumer preference for sustainable shopping and resale - Recession-resistant value proposition appeals during economic uncertainty - 30+ year track record demonstrates business model durability - Specialized focus creates defensible niche versus general resale - Comprehensive training addresses operational learning curve - Strong franchisee community provides ongoing peer support

## Competitive Position

**Industry Context:** The clothing resale market grew 11% in 2023 (6x faster than broader retail clothing market) and is expected to reach $73 billion in the US by 2028. Consumer interest in sustainability and value shopping continues to drive growth in the resale segment.

**Key Competitors:** - Childrens Orchard (NTY Franchise Company - direct franchise competitor) - Once Upon A Child (Winmark Corporation) - Online platforms: ThredUp, Poshmark, Facebook Marketplace, OfferUp - Local consignment shops and thrift stores

**Competitive Advantages:** - Immediate payment model (cash on spot) differentiates from consignment - Specialized childrens focus versus general resale stores - 30+ year franchise track record and refined systems - Physical store experience enables item inspection before purchase - Community-based buying creates local inventory advantage

**Competitive Disadvantages:** - Higher investment than some retail franchise alternatives - Fixed retail location versus flexible online selling - Labor-intensive inventory assessment process - Geographic limitations compared to online platforms reach

## Validation Questions

Prospective franchisees should ask current owners:

1. How long did it take to reach profitability, and what was your first-year experience like? 2. What is your current gross margin on inventory, and how has it trended over time? 3. How do you source quality inventory, and what percentage of items brought in do you purchase? 4. How has online resale competition affected your business? 5. What is your average transaction size and customer visit frequency? 6. How effective is the corporate training in preparing you for daily operations? 7. What ongoing support do you receive from corporate and fellow franchisees? 8. What are your biggest operational challenges? 9. How do you manage seasonality in childrens products? 10. Would you invest in this franchise again, and what would you do differently?

## Data Gaps

The following information would strengthen this analysis but was not available in public sources:

- **Detailed Item 19 Data:** Complete financial performance breakdown including cost of goods sold, operating expenses, and actual owner compensation - **Franchisee Turnover:** Number of closures, transfers, and terminations over past 3-5 years - **Same-Store Sales Growth:** Year-over-year revenue trends for mature locations - **Inventory Metrics:** Average inventory turns, buy-to-sell ratios, and markdown rates - **Customer Metrics:** Average transaction value, visit frequency, and loyalty program performance - **Litigation History:** Specific details on any franchise-related litigation from FDD Item 3 - **Territory Availability:** Map of available versus sold territories - **E-commerce Strategy:** Companys approach to online sales and omnichannel integration

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*This report was compiled from publicly available sources including franchise disclosure documents, industry publications, and third-party franchise research platforms. Prospective franchisees should conduct independent due diligence, review the complete FDD, speak with current and former franchisees, and consult with qualified legal and financial advisors before making any investment decision.*