Mainstream Boutique Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$198,200 - $361,350
Franchise Fee
$18,000
Min Cash Required
$40,000
Total US Locations
72
Business Summary
Mainstream Boutique offers the retail sale of fashionable women's clothing, jewelry, giftware, and accessories. Franchisees operate a physical retail store, engage in direct sales to customers at various events or locations (referred to as "Shows"), and participate in an e-commerce platform.
Corporate History
Mainstream Boutique's business concept originated in February 1991 when Marie DeNicola began operating a retail clothing business as a sole proprietor. Mainstream Fashions, Inc. (MFI), the parent company, was incorporated in April 1993 and operated a Mainstream Boutique business until January 2015. Mainstream Fashions Franchising, Inc., the franchisor, was incorporated in October 1997 and began offering Mainstream Boutique franchises in February 1998.
Financial Overview
Investment Range
$198,200 - $361,350
Franchise Fee (Low)
$18,000
Franchise Fee (High)
$40,000
Minimum Cash Required
$40,000
Royalty %
7.5%
Marketing %
0.5%
Equipment Costs (Low)
$99,800
Equipment Costs (High)
$185,850
Working Capital
$55,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Mainstream Fashions Franchising, Inc. reported a net loss of $58,276 in 2023, which is a significant decrease from its net income of $333,239 in 2022. The company also experienced a negative cash flow from operating activities in 2023, using $389,924, compared to generating $148,791 in 2022. While Mainstream Boutique's current assets exceed its current liabilities, a substantial portion of its assets consists of receivables from related parties. Auditors did not express any substantial doubt about the company's ability to continue as a going concern, and management believes that ongoing legal actions will not materially affect the company's financial statements. A legal settlement of $150,000 is expected to be recovered in May 2024.
Financing Details
Mainstream Boutique does not offer any direct or indirect financing to its franchisees. It also does not guarantee any notes, leases, or other obligations for franchisees.
Performance Metrics
Total US Locations
72
Franchised Units
69
Corporate Units
3
Avg Square Footage
1,600
Franchising Since
1998
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
2
Litigation Summary
Mainstream Boutique has had two notable litigation matters. The first involved former franchisees, Bradley and Anitra Mitchell, Charlotte Paris, and All These Things, LLC, who filed a demand for arbitration against Mainstream Boutique and Corey DeNicola in November 2019, alleging breach of the Franchise Agreements and violations of the Minnesota Franchise Act. Mainstream Boutique counter-sued for operating competing businesses and trademark infringement. This matter was settled in November 2020, with the Mitchells agreeing to pay Mainstream Boutique a material amount, the cases being dismissed, and the parties signing a release of claims. Payments for this settlement were completed by December 2022. The second case, settled in March 2022 with a former franchisee, requires consecutive monthly payments to Mainstream Boutique through February 2026.
Bankruptcy History
Mainstream Boutique has no bankruptcy history to report.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their Mainstream Boutique franchise agreement, franchisees must provide written notice at least 180 days before the current term ends, ensure all material terms and conditions of their current agreement and operational standards have been met, and pay all outstanding monetary obligations to Mainstream Boutique. Franchisees also need to agree in writing to make necessary capital expenditures to modernize and upgrade their business to align with current brand image. A renewal fee of $5,000 is required, and franchisees must sign Mainstream Boutique's then-current standard Franchise Agreement, which may have different terms, conditions, and economic requirements than their original agreement. They are not required to pay a new Initial Fee.
Training & Support Program
Franchisor Assistance
Mainstream Boutique provides pre-opening assistance that includes a written schedule of required fixtures and equipment, samples or photographs of available inventory, an approved supplier list, the confidential operations Manual, and building design standards. They also offer general site selection and evaluation criteria. After opening, ongoing support includes periodic store visits with written reports, updates to the Manual, contact information for new approved vendors, and assistance in developing marketing programs (including web presence, advertising materials, and campaigns). Franchisees also receive assistance from a store operations team member. Post-opening training includes weekly calls with a Franchise Onboarding team member for the first six months, followed by at least monthly support calls with a Franchise Coach. Franchisees are also required to attend an annual convention.
Initial Training Hours
24
Training Location
Apple Valley, Minnesota or Minneapolis, Minnesota or a Minnesota location Mainstream Boutique designates
Ongoing Support
After opening their Mainstream Boutique business, franchisees receive ongoing support through periodic store visits and written reports. They also get updates and modifications to the operations Manual and information on new approved vendors. Mainstream Boutique develops marketing programs, establishes web presence, produces advertising and promotional materials, and offers assistance from a dedicated store operations team member. For the first six months, franchisees have weekly calls with a Franchise Onboarding team member to review inventory, sales, and marketing. Beyond six months, they receive at least monthly support from a Franchise Coach. Franchisees are also required to attend Mainstream Boutique's annual convention.
Franchise Requirements
Ideal Candidate Profile
Mainstream Boutique is looking for franchisees who are individuals, or if an entity, a principal owner holding at least 51% ownership, who are committed to full-time, direct supervision of the business. The individual responsible for day-to-day operations must assume responsibilities on a full-time basis and should not engage in any other business or activity that would significantly conflict with their obligations or time commitments to the Mainstream Boutique business. The designated individual must successfully complete Mainstream Boutique's initial training program and be an approved operating manager.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Retail
Owner Participation
Full-Time
Territory Type
Protected
Territory Size Requirements
Mainstream Boutique designates a geographic territory around the retail location with an approximate population of 100,000 people, not exceeding a 7-mile radius.
Staffing Notes
Mainstream Boutique locations require the franchisee, or a principal owner of the franchisee entity, to participate directly in the operation of the business. This individual must successfully complete Mainstream's initial training program before managing or operating the Mainstream Boutique business. The business must always be under the direct, full-time supervision of the franchisee, a principal owner, or an approved and trained manager. This individual cannot engage in other business activities that would conflict with their responsibilities. Franchisees are responsible for training all new employees or independent contractors. Mainstream provides initial training for the franchisee/owner, including a four-day program at its flagship store in Apple Valley, Minnesota, covering daily operations, inventory, merchandising, customer service, POS system, sales, marketing, and financial reporting. Subsequent training and support are provided with weekly calls from a Franchise Onboarding team member for the first six months, followed by monthly support from a Franchise Coach. Employees and independent contractors must sign confidentiality agreements, and managers and key employees may need to sign non-competition agreements, subject to state law. Mainstream also requires that all employees and independent contractors wear attire prescribed in the Manual.