According to Adam & Eve operations manager Marcus Goswick, franchisees have come from a wide range of backgrounds, from those with years of adult business experience to bona fide newcomers.
“We don’t have a typical franchisee,” Goswick told XBIZ. “We’ve had people who have no experience at all in adult retail and we’ve had people who are looking to convert their existing stores into our brand. In this case, Mike Konja [the Dearborn franchisee] owns four stores in the state but he’s looking to compete in a different demographic group.”
Unlike typical adult video stores, which target a predominantly male clientele, Goswick estimates that 60 to 70 percent of customers at Adam & Eve stores are female. For Konja, Goswick explained, an Adam & Eve store represents a way to break into a market his four stores can’t access.
While the Dearborn store is still in the planning stages — Goswick said that Adam & Eve will begin helping Konja scout for locations — the company plans an aggressive growth pattern for its franchise operations with 20 franchises nationwide by year’s end and an additional 10-15 franchises signed up next year.
According to Goswick, the real constraint on Adam & Eve in terms of growing its franchise operations is seeking regulatory approval. While the company successfully filed its Uniform Franchise Offering Circular with the Federal Trade Commission, several states must approve the document before Adam & Eve can begin selling franchises in those jurisdictions.
The company recently received approval to begin operations in New York and California, according to Goswick, but is still waiting to hear from regulators in Maryland, Virginia and Illinois.
While the company could have opted to bypass the franchise model in favor of licensing its name, Goswick said that the brand would be best served if Adam & Eve could retain utmost quality control.
“Franchising gives us the ability to insure that our brand is never in jeopardy,” Goswick said.
The initial fee for a 10-year Adam & Eve franchise is $30,000. According to Goswick, average startup costs for a 2,500-square-foot location are approximately $125,000.
