Is Dollar General a Franchise? The Complete Guide for 2024

With over 18,000 stores in 46 states, Dollar General is the largest discount retailer in the United States. It‘s rapid growth and continued expansion makes Dollar General a compelling franchise opportunity on the surface. But does Dollar General actually offer franchises to entrepreneurs, or does the company own and operate all of its stores centrally?

A Majority Company-Owned Approach

Unlike many retailers of its size, Dollar General does not offer any traditional franchising opportunities to prospective business owners. The vast majority of Dollar General stores are owned and operated by the corporate parent company rather than independent franchisees.

In its most recent (Q3 2022) earnings release, Dollar General reported 18,114 stores across the U.S., all of which are company-owned. Franchised locations make up a very small fraction of stores, if any.

Rare Exceptions for Existing Store Managers

While traditional franchising is off the table, Dollar General may selectively allow current district or store managers to purchase franchise rights to an existing store they oversee.

However, this is uncommon and typically only offered to long-tenured employees. Dollar General has not publicly shared how many of its thousands of stores are run as franchises by store managers. The number is likely immaterial.

To be considered, store managers generally must have at least 6-10 years of experience with Dollar General and a proven track record of success. They also likely need to have accumulated sufficient personal capital to purchase franchise rights. Reportedly, around 50-100 Dollar General stores are run as franchises under approved managers.

Why So Few Franchises? Benefits of Tight Control

Franchising is not a core part of Dollar General’s business strategy. The company prefers to maintain full control over its stores rather than bringing in outside franchisees. Some key benefits of this approach:

• Consistency – Dollar General can fully control brand standards, merchandising, promotions, pricing, etc. across all stores. This strengthens brand identity.

• Efficiency – Purchasing, distribution, inventory management are centralized for greater economies of scale.

• Growth – Company-owned stores allow Dollar General to pursue aggressive nationwide expansion plans. In 2022 they plan to open 1,110 new stores plus relocate or remodel 1,750 more.

• Profitability – Dollar General retains all store-level profits rather than sharing with franchisees. Their operating margin in 2021 was 9.5%.

While the lack of franchising has fueled fast growth for corporate, it limits options for aspiring entrepreneurs interested in dollar store ownership.

An Affiliate Program Instead of Franchising

Rather than sell franchises, Dollar General offers an affiliate program where website owners can earn referral commissions for driving sales. Approved affiliate partners receive a commission of up to 5% of sales when they refer customers to DollarGeneral.com to purchase merchandise online.

The affiliate program provides online marketing opportunities with the Dollar General brand, but no ownership stake in brick-and-mortar stores.

Contrast With Other Dollar Chains

Unlike Dollar General, some competing dollar store chains do offer franchising and welcome entrepreneurial ownership of new locations:

• Dollar Tree – Over 7,000 franchised locations alongside company-owned stores. Initial investment around $227k – $387k.
• Dollarama – 100% franchised stores in Canada. Franchise fee of C$60k-C$85k plus inventory costs.
• 99 Cents Only – Franchise fees around $30k. Over 320 franchised stores alongside corporate ones.

So entrepreneurs have proven dollar store franchise opportunities with Dollar Tree, Dollarama, 99 Cents Only and others. Just not currently with rapidly-growing Dollar General.

The Bottom Line

In summary, Dollar General does not offer traditional franchises except in very limited cases for existing store managers. The company owns, operates and tightly controls its 18,000+ discount retail stores coast to coast.

While this corporate-owned approach supports breakneck growth plans, it means no franchising pathways for aspiring business owners. For those keen on a dollar store franchise, brands like Dollar Tree or Dollarama likely offer better prospects.