Risk Score
Pending analysis
Investment Range
$28,675 - $45,900
Franchise Fee
$19,000
Total US Locations
114
Business Summary
Rhea Lana's offers franchises for the establishment and operation of periodic, non-continuous consignment sales events focused on children's clothing and related items. Operating under the trade name "Rhea Lana's," franchisees recruit consignors to provide gently used children's and maternity items for sale. These events are typically held twice a year, once in the Fall and once in the Spring, in temporary rented commercial spaces such as vacant retail stores or convention centers. Franchisees are required to personally conduct, attend, and supervise these consignment sales events.
Corporate History
Rhea Lana's Franchise Systems, Inc. was incorporated in Arkansas on December 2, 2011. Its origins trace back to October 1997 when Rhea Lana Riner, the current president, began operating as a sole proprietor under the name "The Children's Clothing Exchange." In October 2004, Rhea Lana, Inc., the parent company, was formed. Rhea Lana, Inc. started offering franchises for sale in 2008, with Rhea Lana's Franchise Systems, Inc. becoming the 100% owned franchising arm of the parent company, exclusively focusing on operating and franchising children's consignment sales.
Financial Overview
Investment Range
$28,675 - $45,900
Franchise Fee (Low)
$19,000
Franchise Fee (High)
$19,500
Royalty %
3%
Equipment Costs (Low)
$2,500
Equipment Costs (High)
$6,300
Working Capital
$500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
The FDD highlights a special risk regarding Rhea Lana's financial condition, stating that the franchisor's financial condition, as reflected in its financial statements, calls into question its financial ability to provide services and support to franchisees. However, the auditor's report itself provides an unqualified opinion.
Financing Details
Rhea Lana's does not offer any direct or indirect financing to its franchisees. They also do not guarantee any franchisee's notes, leases, or other obligations.
Performance Metrics
Total US Locations
114
Franchised Units
112
Corporate Units
2
Avg Square Footage
5,000
Franchising Since
2008
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
Rhea Lana's has no litigation history to report as no litigation is required to be disclosed in Item 3 of its Franchise Disclosure Document.
Bankruptcy History
Rhea Lana's has no bankruptcy history to report as no bankruptcy information is required to be disclosed in Item 4 of its Franchise Disclosure Document.
Agreement Terms
Initial Term
5 years
Renewal Term
5 years
Renewal Conditions
Rhea Lana's franchisees can renew their agreement for successive five-year terms. To do so, they must provide timely written notice at least 90 days before the current term expires, be in good standing (meaning they have not been in default more than twice in the preceding 12 months), and have fulfilled all monetary obligations to Rhea Lana's. Franchisees must also renovate or upgrade their physical premises as required by the franchisor, possess the right to occupy their business location, sign the then-current franchise agreement (which may have substantially different terms), execute a general release of claims against Rhea Lana's, and comply with all required training. If minimum sales requirements were not met, an additional $500 fee will be due at renewal.
Training & Support Program
Franchisor Assistance
Rhea Lana's provides pre-opening assistance, including initial training for up to two owners, a Consignment Sale Event Kit, and access to a customizable website and Brand Guide. Franchisees can operate events from any location within their territory without franchisor approval, but are solely responsible for finding and leasing their event sites. For ongoing support, Rhea Lana's personnel are available for consultation throughout the franchise term at no additional charge, except for requested on-site consultations which incur a fee. They also provide upgrades and updates to the Manual and software, and periodic email newsletters to franchisees. Additionally, an optional annual franchise conference is available for additional training, though franchisees cover associated costs and expenses.
Initial Training Hours
40
Training Location
A Rhea Lana's Consignment Sale location approved by Rhea Lana's Franchise Systems, Inc., which could be a corporate event in Conway, AR, or an existing franchise event in a convenient location.
Ongoing Support
Rhea Lana's provides ongoing support through consultation with its personnel throughout the franchise term, at no additional charge unless an on-site consultation is requested by the franchisee. The franchisor endeavors to respond to any operating problems encountered by franchisees via telephone or email in a timely manner. An optional annual franchise conference is also available for additional training, though franchisees incur the costs of attending.
Franchise Requirements
Ideal Candidate Profile
Rhea Lana's seeks franchise owners who are required to personally conduct, attend, and supervise the management of their franchise, as absentee ownership is not permitted. Ideal candidates must be willing to devote their personal best efforts to maximizing sales and profits while maintaining the brand's operating standards and image. They undergo an application process that includes an interview and verification of funds to determine their qualification. The franchise application also assesses their business experience, motivations, family support, and skills in areas like motivation, administration, rapport-building, computers, creativity, financial management, sales, marketing, operations, organization, and time management.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Hybrid
Owner Participation
full-time
Territory Type
exclusive
Territory Size Requirements
Rhea Lana's territories typically consist of an area covered by 4 to 8 zip codes, but the size can vary significantly depending on market conditions and population density. For instance, a sparsely populated territory might include one or more counties, while a densely populated territory could contain only four metro zip codes. The specific boundaries are defined by a map attached to the Franchise Agreement, which takes precedence over the zip code description.
Staffing Notes
Rhea Lana's franchisees are responsible for hiring and managing all employees for their Consignment Sale Business. The business must always be under the direct, on-premises supervision of an individual who has successfully completed the Initial Training Program. This on-premises supervisor does not need to hold an equity interest in the franchise. All general managers and employees who will access confidential information must sign a nondisclosure, noncompetition, and non-solicitation agreement. Franchisees are also responsible for their employees' supervision, termination, employment terms, compensation, and proper training.