Hardware Store Franchises – True Value and Ace Hardware

Almost every household in the country will visit a hardware store at least one a year. This potential for business is one of the reasons that a hardware store has always been one of the more popular businesses that an owner can start or buy.

The generic hardware store exists in the mind’s eye as a retail store that a person can go to and buy just the right nut and bolt or the odd sized screw. This mythical store is run by knowledgeable people who can answer almost anything that has to do with home repair. This is what the public has come to expect when visiting a hardware store. Some chain store outlets have gotten away from the help side of hardware stores and just sale products off the shelf. Getting answers to questions in these stores is not what the hardware store visit is about. The great help of the old type hardware store is missing. Except in those stores that are run the old fashion way and continue to prosper as their customers are repeat customers and would not think about going somewhere else to shop. Two franchises that carry on this tradition are True Value and Ace Hardware associated stores.

True Value stores

True Value is the third largest co-op in the hardware business. True Value is a cooperative that allows the store owner who is a member to buy merchandise at reduced prices since this group can make large wholesale purchases. The store owners can also enjoy the advantage of group advertising buys. Being able to buy at the large volume prices makes the advantage a significant profit maker. Group advertising can also reduce the cost of getting customers into the store.

The average True Value store investment

The average investment in a True Value store works out to about $35 a square foot for inventory. The fixtures or equipment will come in at about $8 a square foot. The start up cost can vary by area of the country, but the average is about $4 a square foot. The additional cost to become a True Value store can be found by contacting True Value corporate.

Ace Hardware stores

Ace Hardware is the largest hardware co-op Like True Value it offers members the capability to buy merchandise through the co-op at reduced prices and thereby make more profit from sales. They also offer the advantage of group advertising which reduces the cost of getting customers through the doors.

Group buying of the co-op saves all of the member’s money as the co-op gets better pricing due to large volume buying. This savings is then passed on to the members and allows them to make more money.

Ace Hardware Investment Structure

The Ace membership application is about $5000 Initial stock ownership is another $5000. Liquid capital needed to start a store is $250,000 with a loan from Ace of an additional amount of $390,000 to $740,000, which depends on the store size. The total investment is between $650,000 and one million dollars.Land and building cost are not included in this pricing.

The Ace investment numbers are based on a 12,000 square foot store. Dollar amounts are for fixtures, inventory, office equipment, computer system and operating costs.

Other factors that will help the owner

Both of these hardware operations offer the owner training and seminars, which are designed to help the store grow. Suggestions for operating the store more efficiently can be taken in and used to good effect. Special purchases that include a targeted advertising campaign will attract customers into the store. The staff’s helpful attitude will impress the customers and insure they will come again.

Buying a local hardware store

Local stores that are affiliated or not do come to market every now and then for purchase. The owner may be willing to deal very favorably in order to make the sale. Contact a business broker or look up businesses that are for sale listed on the Internet. A good business broker may be wise to contact, as these pros are very good sources of current information. If an existing business is for sale, the price may be excellent due to the store being established. A store with cash flow is always a business to be considered. Customer habits are in the favor of the new owner as long as the service stays the same or gets better. If you are going to make some significant changes, make sure they are well thought out before putting them into practice. If there is a strong benefit to the customers, they will probably be met with enthusiasm.

An old owner may be willing to help with the financing of the business. In most cases the price of the business will increase some and will have to be negotiated as part of the sales contract. The other way to get the needed money is to see if a business lender would be willing to give you the needed loan. Many of these money lenders are easily found on the Internet.


The hardware business is one business that has a variety to customers that need what the store is offering. Every person of age is a possible customer. This large potential customer base is what will make a new hardware store quickly grow and in the right location become profitable. . As with all retail stores location is important. Name recognition is also very helpful which is why the two co-ops have so many members. Customers will come to a store with a familiar name.

Friendly, helpful and knowledgeable staff is critical if you want to stand out from the box stores. Their pricing will be competitive to yours, so you have to beat them by having better help. If you try to compete on price alone, you will be fighting a losing battle. Store hours are also important in this business. Early openings are almost a necessity of the business. People like to get up and get started on projects.