With a Resale Franchise, Average Net Profit is Merely Part of the Picture

When people consider going out on their own to start a business, they often focus on what the return on investment or net income potential of the enterprise can be. This is particularly true for upscale resale franchising and is one of the first topics people search when researching this career move.

When you are researching remember it is not only about the net profit or net income it is also about assessing the many financial and non-financial benefits of making a career move to running your own business.


When you own your own business — such as an upscale resale franchise like Clothes Mentor — you can write off a significant amount of expenses which will reduce your income subject to taxes and your overall tax burden. But it will also reduce your reported net profit or net income — making the business seem much less profitable on paper than it actually is.

Some obvious beneficial expense write-offs include leadership’s salary, the salary of any other direct family member working at the store, vehicle and related transportation expenses, various forms of communication services and even airfare, lodging and food expenses for travel connected with industry conferences or meetings.

In addition, the cost of investments in electronics hardware that you use to help stay in touch with or run the business (computers, laptops, camera equipment, cell phones, etc.) are depreciated rapidly – lowering your near-term taxable income and paper profit levels.

“You can’t simply look at a franchise net profit or net income to judge the true earnings or cash flow generation capabilities of the business,” says James Wollman, Vice President of Franchising at NTY Franchise Company. “You need to peel back the onion and see all of the various factors influencing the bottom line. You need to calculate Sellers Discretionary Earnings (SDE) to see what the business is truly generating inside,” he says. “Once you do this, it is usually a much more attractive picture.”


It’s no secret that today’s corporate culture is suffocating with burdensome procedures and policies often negatively affecting productivity. The often necessary yet extreme environment adds challenges in the corporate world.

When you own your own business, you can escape the unattractive, overly-competitive, cutthroat corporate environment. “You can foster a healthy and productive environment but set the pace and intensity of the cultural atmosphere you want to create and sustain,” says Jim from NTY. You prevent the enterprise (and you!) from being bogged down with too much non-revenue generating “stuff,” allowing employees to keep their eye on the customer and revenue-generating ball.


Owning your own business creates a tremendous amount of pride. The same holds true with owning your own upscale resale franchise. Especially when utilizing proven business models that NTY deploys to compress the learning curve and accelerate the timeline to financial independence.

Beyond financial independence, the reward of being able to set your own schedule is highly valued. “Freedom and autonomy are the greatest benefits we hear from successful franchises,” says Jim. “The value in the ability to do what you want — when you want, including the pursuit of other life interests — can’t be underestimated.”


When someone decides to open their own upscale resale business it is often in deep consultation or concert with a spouse, significant other, or close friend/relative. What typically happens is one of these people maintains their existing career but assists the other who leads the franchise — a sort of informal, joint, complementing arrangement. So, if one person, for example, is really great at numbers; but another is great at marketing, they tend to gravitate to and help out in those areas. It is an informal arrangement without guidelines or rules; but before long. relationships and skills are levered, and the outcome can be powerful.

“We have seen countless instances where among couples, friends, or relatives – individuals’ step in and wind up taking the lead in areas that they are strong; contributing to the growth and success of the franchise,” explains Jim. “While clearly not a requirement for success, it surely helps and quickly becomes a dynamic that strengthens the understanding and appreciation of each other; the overall relationship; and — most importantly — the business!”


Owning your own business can create a positive bond and influence on your family. Exposing them to responsibilities and the many hats one has in running a business.  Forming a strong family culture, built on a solid work ethic and teamwork toward a common goal.

“Most successful small-business owners come from families of small businesses,” says Jim. “Beyond fostering a strong family culture and values, it is a great way for children to get direct, hands-on experience at what it means to run a business. These are lessons they will not learn in school, often priceless, and stay with them for a lifetime.”


It’s clear that net profit or net income is merely part of the picture when assessing the many financial and non-financial benefits of making a career move to running your own business- particularly an upscale resale franchise.

If you have any questions on this or want to learn more about the many opportunities in this rapidly growing sector of retailing, reach out to the NTY team via the contact information below:


Founded in 2006 and Located in Minnetonka, Minnesota — NTY Franchise Company is a pioneering and highly-experienced force in the rapidly growing category of upscale resale. It is the umbrella organization for three proven national resale clothing franchise brands: Clothes Mentor (women’s designer clothing franchise); Children’s Orchard (kids clothing franchise); and NTY Clothing Exchange (teens and young adults clothing franchise).

NTY also has two other successful national franchise concepts: Device Pitstop (electronics repair and resale franchise).

With senior leadership has more than 100 years of collective experience in the business, NTY specializes in working with franchisees at every stage of establishing one of its brands including:  Research & Discovery; Business Planning & Budgeting; Store Location & Leasing; Financing; Design & Build-out; Point of Service Software & Systems; and Coaching, Managing & Marketing.

To learn more about NTY Franchise Company’s franchise opportunity visit our website or give us a call (952) 923-1223