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The Power Of The Dollar

Turning discount into profit
September 1, 2000
URL: http://www.entrepreneur.com/article/31608

You've probably experienced the thrill of shopping at dollar stores, but did you know you could own one? Dollar stores are more than just bargain shoppers utopias; they're also entrepreneurial opportunities, thanks to franchises like Dollar Discount Stores of America Inc., the fastest-growing franchised chain of dollar stores in the nation, with sales of $2.4 million, via 122 locations in 28 states.

Dollar Discount Stores of America was founded in 1982 and began franchising in 1987. Most stores are located in high-traffic strip malls, small plazas and other locations near high-volume stores. With middle-class America as its target market, chair and CEO Paul Cohen says that they're the equivalent of the five-and-dimes of years past. Typically, stores do best in areas where the old-fashioned quest for a good bargain is still strong. "Our biggest success has been in rural America," Cohen points out.

Dollar Discount Stores sell everything from household items, snack foods, and toys, to seasonal decorations and greeting cards. If selling these kinds of goods at discount prices sounds appealing to you, start-up costs for new franchisees usually run between $99,000 to $160,000, with most stores averaging anywhere from 2,500 to 3,500 square feet.

According to Cohen, Dollar Discount Stores aren't all about low prices, but about selection as well. "We don't want our stores to be known as 'junk stores,' because we're not," he says. "We pride ourselves on our merchandise."

As far as Dollar Discount's goal of opening 40 to 50 more stores this year, Cohen says, "We're right on target."