Trick or Treat, let's explore seasonal halloween franchise Opportunities
We all see halloween decor and costume stores pop up around the same time each year. Does this fun holiday present an opportunity for entrepreneurs to capitalize on the season’s spooky spirit?
Whether you’re interested in running a haunted house, managing a costume store, or offering themed experiences, Halloween franchises provide a ready-made business model with a built-in customer base.
In this post, we will explore three Halloween businesses, 2 of which are seasonal, that seek to offer a fun and profitable way to tap into the excitement and demand that Halloween brings.
THE US HALLOWEEN MARKET
The Halloween market in the US is one of the biggest and fastest-growing seasonal markets, with 2024 annual spending reported by the National Retail Federation to be at approximately 11.6 billion dollars. Yes, you read that right – billions. Of this amount, the NRF reports:
Halloween Costumes
$3.8 billion
Halloween Decorations
$3.8 billion
Halloween Candy
$3.5 billion
Halloween Greeting Cards
$0.5 billion
Halloween has expanded far beyond a holiday for children’s trick-or-treating. It is now a season that has captured the enthusiasm of all ages, sparking a wide variety of purchases. Each year, people spend billions on costumes, decorations, candy, pet costumes, and haunted experiences, creating enormous business opportunities across many industries
Several key trends fuel Halloween’s growing popularity. Very clearly, adults are now a big part of the Halloween market, celebrating with themed parties, events, and outings. Social media amplifies the Halloween season, encouraging people to share their costumes, decorations, and celebrations, which in turn drives interest and spending.
Pop culture also has an influence over people’s costumes each year as the people tend to choose to dress up as popular movie or TV characters. For businesses, especially franchises, during the Halloween season, they respond with themed products and experiences.
The Halloween market does not show signs of slowing down any time soon, but as a matter of fact, it is projected to keep growing, with spending expected to increase as Halloween continues to gain popularity. As more consumers look for unique experiences, franchises that offer themed events, creative products, and social-media-friendly decorations are well-positioned to capture a share of the market.
For franchisors, Halloween is a significant opportunity to boost sales, strengthen customer connections, and add seasonal excitement to their brand—ensuring they remain memorable long after October 31.
Seasonal Halloween Markets
The seasonal Halloween markets refer to the temporary retail pop-up stores that operate primarily during the period leading up to, during and shortly after the Halloween season. These stores capitalize on the surge in demand for costumes, decorations, props, and party supplies.
Unlike traditional year-round retail locations, these stores leverage a temporary presence, often in vacant retail spaces, to cater specifically to Halloween shoppers.
For franchise brands, seasonal stores, like some Halloween businesses, represent an opportunity to generate significant sales in a short period, attract foot traffic, and meet the demands of a concentrated and high-interest market.
Two popular examples of seasonal Halloween stores are Spirit Halloween and Halloween Express which are both discussed further in this blog.
One Benefit of a Seasonal Halloween Business
One of the known benefits of a seasonal Halloween business is that by establishing a short-term presence, business owners can avoid the overhead of maintaining a year-round store while still capitalizing on the intense demand.
Additionally, because these seasonal Halloween businesses only operate for a limited period, this creates a sense of urgency among customers, encouraging them to make immediate purchases.
For franchise businesses, this seasonal model can minimize risk and optimize return on investment, making it a powerful approach to high-demand holiday sales.
OFF-SEASON FOR SEASONAL HALLOWEEN BUSINESSES
As mentioned, seasonal halloween businesses only operate for a limited period of time. While they may not be visible to customers year-round, these businesses use their off-season to plan and prepare for the next halloween.
Business activities during this ‘downtime’ include securing temporary business leases, optimizing inventory, and analyzing market trends to inform product selection for the next halloween season.
Securing Temporary Business Leases
Finding and securing high-traffic business locations is a critical task for seasonal Halloween businesses. The process of securing these temporary leases begins months in advance and involves a thorough analysis of available commercial spaces that can accommodate a store’s expected market.
More often than not, seasonal Halloween stores lease vacant spaces in malls, former retail stores, and high-visibility areas that can attract maximum foot traffic for a few months each year.
By negotiating lease terms well in advance, Halloween franchises ensure they have access to the best possible locations without having to pay for year-round occupancy
Optimizing Inventory
Inventory management is another major focus during the off-season. Seasonal Halloween businesses rely on precise inventory planning to avoid excess stocks while ensuring there is enough supply of popular products to meet customer demands.
The off-season is the ideal time for seasonal Halloween businesses to establish supplier contracts, often securing bulk orders of high-demand items early to get the best prices and prioritize production.
Because of the seasonal nature of their business, these stores are able to effectively manage their stocks to reduce surplus and ensure there is ample supply of products ready to launch when the Halloween season kicks in.
Analyzing Market Trends to Inform product Selection for the Next Halloween Season
Keeping up with market trends is a key to the success of Halloween businesses. The off-season can be used by the business to conduct thorough market research and analyze data to carefully anticipate the products and/or services that will be most in demand for the next Halloween season.
A prime example of this is the release of a new blockbuster movie featuring a popular character, which often leads customers to seek out costumes of that character as Halloween approaches.
By staying aware and keeping track of what captures its target markets attention, seasonal Halloween businesses can tailor and adjust their offerings to appeal to their wide customer base.
HALLOWEEN BRANDS
Let’s get to know some of the most well-known Halloween brands that have become darlings of the spooky season. Two are franchisors, and one offers goods on a consignment model.
HALLOWEEN EXPRESS
A well-established seasonal retailer specializing in Halloween costumes and other related Halloween merchandise, Halloween Express offers a franchise opportunity for an interested franchisee to operate their own temporary seasonal Halloween Express store.
Initial Start Up Costs
According to its most recent Franchise Disclosure Document (FDD) available in the NASAA EFD site, the initial investment needed to open a Halloween Express Store ranges around $170,000 to $267,000.
This price range incudes the $10,000 initial franchise fee which first time franchisees will pay to HEX NEWCO, LLC upon the signing of a Franchise Agreement.
Apart from the initial franchise fee, the bulk of the estimated investment, around $120,000 to $180,000 thereof, goes toward purchasing the initial inventory for a franchisee’s Halloween Express store.
Franchise Locations
As of December 31, 2021, Halloween Express reported 49 franchised outlets. While this marks a decrease of 9 units from its 58 franchises at the close of 2020, such fluctuation is common as businesses may be refining their growth strategies and shifting their focus on optimizing the performance of their existing locations.
Halloween Express franchised outlets are found in the following states: Alabama, Arkansas, California, Florida, Georgia, Indiana, Iowa, Kansas, Kentucky, Louisiana, Minnesota, North Carolina, North Dakota, South Carolina, South Dakota, Tennessee, Texas, Washington and Wisconsin.
Royalty Fees
Franchisors typically collect royalty fees from franchisees to support ongoing brand development, marketing, and operational support.
In the case of Halloween Express, Item 6 of its 2022 FDD reveals that it collects 5% of total gross sales as monthly royalty fee.
ESCAPE HUNT
Having gained recognition for its themed rooms, Escape Hunt provides adventure centers that offer live escape game experiences perfect for Halloween where customers can test their wits and bravery through thrilling, themed challenges that bring out the spirit of the season.
Please note that while the Halloween-themed rooms at Escape Hunt may be seasonal, Escape Hunt franchises themselves operate year-round.
Initial Start Up Costs
According to its most recent FDD available in the NASAA EFD site, the initial investment needed to open aHalloween Express Store ranges around $356,000 to $663,000.
This price range already incudes the $40,000 initial franchise fee which first time franchisees will pay to ESCAPE HUNT USA FRANCHISES LTD. upon the signing of a Franchise Agreement.
Apart from the initial franchise fee, the bulk of the estimated investment, around $150,000 to $300,000 thereof, goes toward game room fit-outs which include game “theming”e elements for three to six game rooms such as room flooring, wallpaper installation, props, technology and other elements related to the game-play and production.
Franchise Locations
As of December 31, 2021, Escape Hunt reported 2 franchised outlets which is a steady figure from its 2 franchise outlets at the end of 2020.
Escape Hunt’s franchised outlets are found in Florida and Texas.
Royalty Fees
As mentioned, franchisors typically collect royalty fees from franchisees to support ongoing brand development, marketing, and operational support.
In the case of Escape Hunt, Item 6 of its 2022 FDD reveals that it collects the greater of 8% of Gross sales and $2,000 as monthly royalty fee.
SPIRIT HALLOWEEN
Known to be the largest Halloween retailer in the US, Spirit Halloween has more than 1,500 seasonal locations in strip centers and malls across North America. Since 1983, Spirit Halloween has established itself as a destination to customers for all things Halloween.
Spirit Halloween operates primarily on a consignment basis rather than offer a traditional franchise opportunity,
Franchise Opportunity vs. Consignment Opportunity
Known to be the largest Halloween retailer in the US, Spirit Halloween has more than 1,500 seasonal locations in strip centers and malls across North America.
Since 1983, Spirit Halloween has established itself as a destination to customers for all things Halloween.
On Ownership & Investment
- FRANCHISE: The franchisee (buyer of franchise business) buys into the brand of a franchisee (seller of franchise business), pays an upfront fee, and handles inventory.
- CONSIGNMENT: The consignee (buyer of supplier’s products) agrees to sell the products of the consignor (supplier of products) but does not own the inventory and only pays for products that are sold.
On Control
- FRANCHISE: The franchisee follows the franchisor’s guidelines but have control over day-to-day operations.
- CONSIGNMENT: The consignee has limited control over product selection as it is the consignor who provides the inventory.
On Support from Franchisor/Consignor
- FRANCHISE: The franchisor provides the franchisee training, marketing, and ongoing business support
- CONSIGNMENT: Beyond the supply of inventory, the consignor has limited support to the consignee.
States Where Spirit Halloween Offers Consignment Opportunities
According to Spirit Halloween’s official website, it offers consignment opportunity only in the states of Montana and South Dakota. For other states, it is likely that they are already committed to with Spirit Halloween corporate store locations or there are existing Spirit Halloween consignment operators aligned with specific cities in such state.
Initial Start Up Costs
In Spirit Halloween’s Consignment Program Form posted on its website, it asks if an interested consignor has $125,000 in liquid assets (cash, home equity, line of credit) to cover initial start-up costs.
Meet the Author:
Christine Bontuyan is a lawyer in the Philippines and she is based in Cebu City. She earned her Juris Doctor degree in 2020. Apart from handling civil and criminal cases in the Philippines, Christine serves as a paralegal for reputable US law firms. She previously served as an elected public official in the Philippines, as the Sangguniang Kabataan Chairperson of Barangay Talamban, Cebu City from 2018 to 2023.
