Start a contender esports franchise by following these 9 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your contender esports franchise. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a contender esports franchise?
Owners need to have liquid assets of at least $50,000 and a net worth of $300,000 to become an owner. Estimated costs to open a franchise are between $150,700 and $237,080. Major costs include the initial franchise fee ($39,000) as well as the costs of furniture, gaming stations, PCs, and gaming consoles.
Total costs can vary depending on local real estate prices and the cost of required permits.
What are the ongoing expenses for a contender esports franchise?
Franchise owners need to account for the cost of employee salaries, business insurance, permit fees, and commercial insurance. They may need to upgrade or replace machines. Owners are also required to pay a 5% royalty fee for all weekly sales, and 2% of all weekly sales to an advertising fund. You'll also need to set aside 2% of gross weekly sales for your own personal advertising efforts.
Who is the target market?
Contender eSports has found that the target demographic are men between the ages of 16 and 35. Because guests will need to have some degree of disposable income, Contender eSports aims for locations where the average income is high enough to meet their fee structures.
How does a contender esports franchise make money?
Owners charge customers a fee to watch games and use the special gaming stations. The idea is to get enough 'regulars' into your store so your revenue stays consistent from month to month.
How much can you charge customers?
Charges may vary based on location and initial investment costs.
How much profit can a contender esports franchise make?
Profits depend on location, marketing, and general management. While Contender eSports Gaming Center does not release individual profit estimates, they do allow owners to consult with a development manager and existing franchise members about their numbers. This can help you estimate your own profits before opening the store.
How can you make your business more profitable?
Franchise owners can sell Contender brand merchandise, such as shirts or related gear. They may also consider holding special events to draw casual video game players into the store and potentially gain more regular customers.
What will you name your business?
Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your contender esports franchise is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
Form Your LLC
Read our Guide to Form Your Own LLC
Check out the Top Business Formation Services from our friends at StartupSavant.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
Federal Business Licensing Requirements
Certain state permits and licenses may be needed to operate a Game Center. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
State & Local Business Licensing Requirements
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
Trademark & Copyright Protection
If you are developing a unique product, concept, brand, or design, it is prudent to protect your rights by registering for the appropriate trademarks and copyrights.
The nature of legal requirements in distance education is ever changing, especially in regards to copyright laws. Here is a frequently updated resource, which can help keep you aware of the legal requirements.
Certificate of Occupancy
A Game Center business is generally run out of a storefront or standalone building. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a Game Center store business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your Game Center business will be in compliance and able to obtain a CO.
STEP 7: Get Business Insurance
Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a contender esports franchise
Contender will do some of the legwork when it comes to advertising your services, but owners will still need to devise local campaigns to find people in their area. The biggest pay-off for eSports has been through Youtube marketing. Creating branded videos about the most popular video games and working with YouTube to find your audience can be a very effective strategy. See if you can get an influencer to speak on your behalf so that your audience can learn more from someone they trust. Look for ways to add value before asking customers to visit your website or physical location.
How to keep customers coming back
First and foremost, customers are looking for consistency and reliability in the technology. Owners need to ensure all machines are maintained so there are no breakdowns during the best parts of the game. Make sure the staff is friendly and accommodating to all guests. You can’t guarantee a perfect experience, but the more effort you put into the center, the more likely it is people will want to come back.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Contender Esports Franchise In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
This business is great for those who understand and appreciate video games. From watching to playing, the industry continues to grow for anyone with the vision to recognize a true opportunity. People who have studied the patterns of gaming will understand how to design their business to attract the right clientele.
What happens during a typical day at a contender esports franchise?
Owners will oversee the general events of their business. From employee management to scheduling games, owners may be asked to pitch in whenever and wherever their assistance is needed. You’ll likely spend a portion of the day strategizing and marketing your business so you can grow your clientele.
What are some skills and experiences that will help you build a successful contender esports franchise?
Franchise owners don’t need any formal education to get started, but Contender recommends having some experience in marketing and branding. The right person will be a spirited entrepreneur who’s willing to do whatever it takes to build their customer base.
What is the growth potential for a contender esports franchise?
A recent eSports match drew 57 million people, which is three times more than the 2018 NBA finals. The market for eSports is exploding, whether the general public understands it or not. Even if you think you live in an area where video games are not revered, you may be surprised at how many customers (and potential customers) there are who want to take their hobby from their home to the streets. Based on current projections and past revenue, the eSports market is expected to top $900 million this year.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a contender esports franchise?
Contender eSports Gaming Center franchisers will be given the training and materials they need to market and succeed in their business. They can use the trusted Contender name as a springboard to begin attracting customers. This brand name is well known for providing customers with the games they want and the technology to see them in living color. However, owners will still need to exercise some degree of creativity if they want to help their business stand apart. Owners who immerse themselves in the world of eSports will start to see certain patterns emerge that they can use to capture their public's interest.
Because eSports is still relatively new, some entrepreneurs may struggle with the best way to get the word out about their business. Part of your job will be experimenting with the people in your area to see what they respond to. For example, are guests primarily coming for a sense of community, or a chance to learn more about how to play their favorite games? Maybe they want to celebrate the best players in the industry, or perhaps they’re just looking for better technology than they have at home. From there, owners can design marketing campaigns that speak directly to their base.
How and when to build a team
You’ll want to have a team ready from the moment you open. Look for people who are up-to-date on video games so they can provide suggestions and feedback about how to grow your business. You may need to hire a designated manager to keep up with daily operations while you concentrate more on taking the business to the next level.