Closet Factory Franchise FDD, Costs & Fees (2024)

KEY FRANCHISE STATS

All you need to know about this franchise in a snapshot

Initial franchise fee
$58,500
Investment required
$345,000 - $612,000
Royalty fee
6.75%

Closet Factory: A Leader in Custom Home Organization Solutions

Founded in 1983 by John La Barbera in Los Angeles, Closet Factory has become a leading name in the custom closet and home organization sector. With its headquarters in Los Angeles, CA, the company began offering franchises in 1985 and has since grown its presence across the United States, granting franchisees exclusive territories in key metropolitan areas.

Closet Factory stands out with its business model that prioritizes innovation, elegance, and creative design. The company provides a wide array of customizable home organization solutions beyond closets, including offices, garages, and entertainment centers, creating numerous opportunities for repeat and referral business within each household.

The franchise system at Closet Factory is structured to be straightforward to implement and expand, with a focus on maximizing franchisee profitability. Franchisees receive comprehensive training and support, including a six-week program partially conducted in Los Angeles, covering essential areas such as sales, management, manufacturing, software, and 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 $58,500
Site Location $24,000 - $52,000
Property Improvements $10,000 - $40,000
Equipment, Fixtures and Furniture $160,000 - $275,000
Vehicles (Deposit on lease) $10,000 - $15,000
Signage and Uniforms $2,000 - $6,000
Product and Supply Inventories $10,000 - $20,000
Grand Opening Marketing Program $30,000 - $55,000
Additional Funds - 3 months $40,000 - $90,000
TOTAL $344,500 - $611,500

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Number of units

2024
Franchised units

69

74

78

Company-owned units

6

6

6

Total units

75

80

84

Franchise Disclosure Document

Training

Remedial Training The franchisor may provide remedial training or assistance to franchisees and their managerial staff if deemed necessary. This training is contingent upon the availability of the franchisor's personnel. Franchisees are responsible for covering any associated fees to offset the costs of this training, as well as all related expenses including transportation, lodging, meals, training materials, and wages.

Virtual Training, Assistance, and Inspections The franchisor may deliver parts of the initial training program, additional or refresher training, remedial training, pre and post-opening onsite assistance, post-opening consultations, and inspections remotely via a designated virtual communication platform.

Initial Training Program Franchisees and their initial supervisory or managerial staff must successfully complete the franchisor’s initial training program. The franchisor may charge fees for training additional or subsequent personnel. This training covers an overview of the franchisor’s standard management system, marketing, sales, and closet installations, typically lasting around 10 business days.

Regional Leadership Conferences Additional training is provided at Regional Leadership Conferences organized by the franchisor, held 1-4 times a year. Attendance is mandatory for the franchisee and one managerial employee per Closet Factory Outlet.

Additional and Refresher Training Programs Franchisees and their supervisory or managerial staff are required to participate in additional and refresher training programs, including national and regional conferences, conventions, and meetings as deemed necessary by the franchisor. This training aims to correct, improve, and enhance operations and the Closet Factory System. The franchisor may also mandate successful completion of specific training programs for managerial staff.

Territory Protection

Closet Factory provides territory protection to its franchisees. When awarded a franchise, it includes the operation of a single Traditional Closet Factory Outlet at a specified location within a designated Territory.

The Territory is defined by geographic boundaries based on demographic factors such as population density, geography, zoning, market conditions, and other relevant factors.

The franchise agreement guarantees that the franchisor will not enter into another Franchise Agreement for a Traditional Closet Factory Outlet or open a franchisor-owned Traditional Closet Factory Outlet within your defined Territory.

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