The Vitamin Shoppe is pumping up its store expansion through aggressive franchising.
The Secaucus, New Jersey-based retailer of vitamins, supplements and sports nutrition products disclosed Monday that it has signed 58 franchise territories to 15 franchise partners, and that at least 12 franchised stores are expected to open this year, in addition to the two already opened. The company first announced a U.S. franchise strategy in May 2021.
The program is significant considering many retailers through the pandemic and tough macro economic conditions have closed stores or reluctant to add stores, while developers and landlords are looking sign new tenants. The Vitamin Shoppe already has a big retail footprint, operating more than 700 stores in the U.S. under The Vitamin Shoppe and Super Supplements banners, as well as an e-commerce website. The Vitamin Shoppe has said it sees a growing demand for health and wellness products.
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According to the company, franchisees are required to have a $750,000 minimum net worth and $200,000 in minimum liquidity to start. The cost to open a store varies depending on local real estate costs. The top 25 percent Vitamin Shoppe stores generate an average close to $2 million in annual revenue.
The first Vitamin Shoppe franchise opened in Greensboro, North Carolina, in January 2022. It’s an existing store purchased by a franchisee from The Vitamin Shoppe.
The second franchised unit opened in Valparaiso, Indiana, on Feb. 2. It’s a new location for the brand, owned by by Rochelle and Rick Cantrell. “The Vitamin Shoppe will be our first business venture together as a couple,” Rochelle said.
“They are longtime customers of The Vitamin Shoppe who have taken their personal passion for wellness and applied it to building a dynamic, local business that will support the health and well-being of their own community,” Laura Coffey, the company’s chief financial officer, said in a statement. “This store is the first of many to open in the coming months and years, as franchising becomes a significant retail growth engine for The Vitamin Shoppe.”
The next new franchise store, scheduled to open this spring, is located in the Tempe Marketplace shopping center in Tempe, Arizona. Among other franchised openings, another unit will open in New Braunfels, Texas, later this year.
While franchising can be an efficient way to grow the footprint of a retailer, there are challenges. Companies must provide proper support, training and guidance to the franchisees so company standards and brand image are maintained.
Overseas, The Vitamin Shoppe, which is a subsidiary of The Franchise Group, has a handful of country license agreements including in Vietnam, Paraguay, Panama and Guatemala. Licensees each have exclusive rights to own and operate stores and distribute products from The Vitamin Shoppe in their respective countries. The licensee runs all aspects of the business for the entire country.
U.S. franchise partners have more of a one-stop, turnkey model, where they own and operate the real estate and store, but The Vitamin Shoppe helps provide the products, supply chain, marketing, legal, operations, support, etc. The franchise model provides commission to those franchisees that with their stores and service to customers drive sales to the vitaminshoppe.com website and the VShoppe app.