Closets By Design Franchise FDD, Costs & Fees (2024)

KEY FRANCHISE STATS

All you need to know about this franchise in a snapshot

Initial franchise fee
$20,000
Investment required
$154,000 - $511,000
Royalty fee
7.25%

Closets By Design: A Leader in Custom Home Organization Solutions

Closets By Design, founded in 1982 and franchising since 1998, has earned a distinguished reputation in the custom closet and home organization solutions sector. They specialize in a wide array of offerings tailored to meet the unique needs of each client, enhancing their living spaces with a customer-first approach. The franchise is committed to providing personalized design consultations that align with the client’s budget and organizational requirements.

Their products, crafted in local, state-of-the-art facilities, boast high-quality craftsmanship and come with a lifetime warranty, reflecting their confidence in the durability and quality of their workmanship.

Closets By Design franchises are notable for their excellent cash flow, high gross margins, and minimal inventory needs. They are backed by a robust corporate team that offers extensive initial training and continuous support to facilitate business growth. The brand benefits from effective national advertising and marketing programs that generate leads and enhance customer awareness, supported by a proprietary customer relationship management system to streamline daily operations.

Initial investment

Here's what you would need to invest if you were to start this franchise. These costs are provided by the franchisor in the Franchise Disclosure Document.

Type of Expenditure Amount
Initial Franchise Fee $20,000
Territory Fee Greater of (i) $18,000 or (ii) $1,000 for each increment or portion of 10,000 households in the Territory
Market Development Fee Varies
Travel/Living Expenses for Initial Training $2,500 to $3,500
Furniture, Fixtures and Equipment (including computer) $37,000 to $254,000
Grand Opening Advertising – 1st 3 months $30,000 to $45,000
Inventory and Supplies $10,000 to $25,000
Deposits for Vehicles $1,000 to $4,000
Interior/Exterior Signs $500 to $1,000
Licenses and Permits $500 to $1,500
Rent (excluding Security Deposits) $2,000 to $12,000
Retail Shop Build-Outs and Improvements $5,000 to $30,000
Business Insurance $1,500 to $2,000
Legal/Accounting $1,000 to $3,000
Additional Funds – 1st 3 months $25,000 to $75,000
TOTALS $154,000 to $511,000

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Number of units

2024
Franchised units

65

66

76

Company-owned units

7

6

6

Total units

72

72

82

Franchise Disclosure Document

Training 

The franchisor offers a detailed training program for franchisees and their staff, comprising the following elements:

Initial Training for General Managers General Managers are required to participate in and successfully complete the franchisor's initial training program. The franchisor will set the start date, location, and duration of this training. Franchisees are responsible for all costs associated with the training, including transportation, meals, lodging, and other living expenses for their trainees. If the General Manager or any participant does not successfully complete the initial training, they may enroll in a subsequent training session, which might incur additional fees.

On-Site Training and Support Beyond the initial training, the franchisor provides one to two weeks of on-site training at the franchise location around the time the business begins operations. The franchisor solely determines the timing of this support. Franchisees can request extra on-site training or assistance if needed, which may involve additional costs.

Staff Training Programs The franchisor may periodically offer optional training courses, seminars, conferences, or other programs for staff. While there may not be fees for these programs currently, the franchisor reserves the right to charge fees in the future. Franchisees must cover all related expenses for their attendees, including transportation, meals, lodging, and living expenses.

Territory Protection

The franchisor assigns each franchisee a specific protected territory ("Territory") where they must exclusively operate as a Closets By Design franchisee. Franchisees are prohibited from engaging in any other business activities outside their Territory without obtaining written consent from the franchisor. Similarly, they cannot conduct any Closets By Design business beyond their designated Territory without the franchisor's approval.

As long as the Franchise Agreement remains valid, the franchisor will not establish another Closets By Design franchise within the franchisee's Territory, provided the franchisee adheres to the material terms of the Franchise Agreement.

Franchisees do not receive exclusive territorial rights and may encounter competition from other franchisees, company-owned outlets, or other distribution channels and competitive brands under the franchisor's control.

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