REDBOX Franchise Startup Cost, Revenue and Profit Margin

Redbox is a DVD rental company based in the United States is America. If you are interested in the rental business, you should pay attention and indeed consider a Redbox opportunity. The rental business remains a lucrative business that should not be ignored.

In this article, we shall be doing a critical examination of the Redbox franchise opportunity.

We are going to start this critical examination by first looking at the history of the company. We are also going to look at the start-up cost for a Redbox franchise. We will also be looking into the franchise fee which the company charges its franchisees.

In this article also, we will examine the training and support which the company provides to its franchisees. We will also discuss the franchise terms of the agreement at the company and the terms of franchise agreement renewal which the company provides for its franchisees.

Finally, in this article, we will tell you how you can open a Redbox franchise.

Is Redbox a Franchise?

Redbox is a franchise. Redbox is a top and respected rental brand in the United States. The company’s business is the rental of DVDs, Blu-ray, and video games.

Redbox was founded 16 years ago in the year 2002. The company’s core area of operation is the United States of America. The company’s headquarters is located in Oakbrook Terrace, Illinois, in the United States.

The company was founded by Gregg Kaplan. During the early stage of the company, Redbox was funded by McDonald’s Corporation.

Redbox is a private company. As a private company, Redbox is registered as Redbox Automated Retail LLC.
The company is owned by Apollo Global Management, LLC a private equity firm based in the United States of America. Apollo Management is a public company quoted on the New York Stock Exchange (NYSE) with the Ticker Symbol APO.

The company’s rental business is done through retail kiosks. The company’s retail kiosks are automated.

Redbox retail kiosks are located at such locations as fast-food restaurants, convenience stores, pharmacies, grocery stores, malls, and other mass retailers.

The company’s core service involves renting. The company has been largely successful in its years in operation. Redbox controls a large share of the physical rental market in the United States of America (more than 50%).

Redbox operates more than 34,000 franchise locations in the United States and more than 42,000 kiosks.

Redbox offers a membership streaming service to its teeming customers called Redbox Instant. The service was launched publicly on March 14, 2012.

The company also offers a none membership streaming service called Redbox On Demand. The company was also the first U.S rental company that started a return anywhere policy, which allowed customers to return rented DVDs and video games at any Redbox kiosk.

Redbox began its Blu-ray rental in July 2010 at 13,000 Redbox kiosks across the United States.

How Much Does Redbox Franchise Cost?

To operate a Redbox franchise, the intending franchisee should contact the company directly on its website at www.redbox.com for information on the cost of the company’s franchise.

Redbox Franchise Fee

Intending franchisees who desire to open a Redbox franchise should contact the company directly on its website at www.redbox.com to obtain information on the companies franchise fee for franchisees.

Redbox Franchise Start-up Cost

The startup cost for a Redbox franchise is $25,000. Intending franchisees should contact the company directly on its website at www.redbox.com for more information.

Redbox Franchise Training and Supports

Redbox provides training and support for its franchisees.
The support which the company provides for its franchisees include;

  • Redbox provides support for a grand opening of their franchise locations.
  • The company provides a toll-free support line for its franchisees.
  • There is also newsletter support for all franchisees of the company.
  • All franchisees receive design and construction support from the company.
  • Franchisees receive local marketing support from the company.
  • There is online support for all franchisees.
  • Franchisees receive support for ongoing training from the company.
  • Redbox provides equipment support for its franchisees.

Redbox Franchise Terms of Agreement/Renewal

To get the information on the terms of the initial franchise agreement for a Redbox franchise the intending franchisee should contact the company directly on its website at www.redbox.com.

How Much Does a Redbox Franchise Make?

It can’t be stated how much a Redbox franchise makes. The success and how much a Redbox franchise can make will depend on the location of the franchise.

The size of the franchise is also an important factor in determining how much a Redbox franchise can make.
However, riding on the back of the customer loyalty which the company enjoys from its customers and the company’s large physical rental market share, the franchise can make a considerably large profit.

How to Open a Redbox Franchise

Entrepreneurs who are interested in operating a Redbox franchise should contact the company directly on its website at www.redbox.com for all franchise inquiries.

Note, however, that to get approved as a Redbox franchise the intending franchisee’s business should be located in a place where there are more than 15,000 potential customers.

Owning a Redbox – Requirements, Startup Cost, and Application

How much does a Redbox kiosk cost? What is the average Redbox revenue per kiosk? This article will dwell on the procedures involved in buying a Redbox franchise. I’ll be covering the most important things to consider when buying into this franchise opportunity.

Looking for a good franchise opportunity can be a daunting task for entrepreneurs/investors interested in buying into existing franchises.

The Cost Implications of Buying a Redbox Franchise

As with any other franchise opportunity, there is always a price attached to such a franchise. For the Redbox franchise, the startup cost implications are not available at the moment but compared to other companies offering similar services to the Redbox franchise, the startup cost/cost of purchasing a DVDNow franchise, for instance, hovers around the $25,000 mark.

The popularity of the Redbox Business Model

With this franchise already having an advantage over other companies offering similar services, it has a wide user base. Almost everyone has used a Redbox rental machine, and these machines are quite easy to use. This franchisor targets locations with high traffic to place their DVD rental machines. The landowners of these locations are paid rentals for the use of such locations.

The DVDNow franchise, however, is not as large as the Redbox franchise which has over 50,000 red kiosks spread across 50,000 locations. One unique feature of this franchise opportunity is that it requires low overhead costs, and less work as most of the work involved is automated.

Benefitting From the Redbox Business Opportunity

There are opportunities for profits that Redbox presents. At the moment, an average Redbox machine would rake in a gross profit of $13,500, meaning that the amount realized on average per kiosk will be within the region of $3,452. The dwindling revenues realized from the Redbox DVD rental machines point to the change in technology.

Before now, this was the main technology, but with the coming of broadband services and online movie rental technology, this option has witnessed a considerable decline in popularity. Although there are still opportunities for making profits, it is believed that the popularity of this option will continually face a gradual decline.

The Challenges of Ownership of Redbox Franchise

Owning the Redbox franchise DVD rental machines does not automatically mean you would be making tons of profits. First, these machines have to be always loaded with movies. However, the movies loaded into the machine consume space and have a limited number of movies that can be loaded into the machine.

This can create a dilemma for the owner, as the choice of movies to be loaded is solely made by the owner, and due to the nature of the business, those renting these movies are never available to be questionable due to the automated nature operations.

This leads to a lot of guesswork on the preference of movies to be bought and loaded. There is also a risk that DVDs loaded into the rental machine might not be rented out, thus bringing about a loss in revenues as a result of low rental.

Buying a Redbox Machine

With the potentials presented by the Redbox franchise, there has been growing interest and question among many on how to buy the Redbox DVD rental machine.

This, however, this not possible, as you can only contact Redbox and provide details of your location. In most cases, business locations like convenience stores, pharmacy’s among other business outlets with high traffic are the most acceptable to the franchisor.

If your location falls under any of these business outlets with busy traffic, Redbox will examine such a location and if it meets their criteria, the business location or property owner will benefit from revenue through the renting of such space.

Channels of Establishing Contact

There are channels through which contact can be established with Redbox, the website option or through the phone lines. You can either establish contact by dropping a message to the franchisor. Also, questions can be sent to the email address; questions@redbox.com Redbox sends an application letter for you to fill out.

This application would require personal details such as your name, email address, zip code, an average daily traffic description, and also the description of your business location. The information supplied is to be included in the application form and submitted.

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The response from this franchisor is not instant, as it can take several weeks due to the high volume of applications recorded daily. So patients should be exercised by the applicant.

Vital information such as the volume of sales and the traffic numbers should be kept handy as they would be required during the application procedure for the Redbox franchise.