In this FDD Talk 2016 post, you’ll learn the following:
- Section I – Background information on the Plato’s Closet franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Plato’s Closet franchise, based on Item 7 of the company’s 2016 FDD
- Section III – Presentation and analysis of Plato’s Closet’s financial performance representations, based on Item 19 of the company’s 2016 FDD, including information on the:
- 2015 average, high, and low gross sales and average gross profit for franchised Plato’s Closet stores that opened in 2014, 2013, 2012, 2011, 2010, and 2009 and prior, respectively, and had been in operation for the 12-month period ended December 26, 2015
- 2015 average gross sales for the first, second, third, and fourth quartiles of the 410 franchised Plato’s Closet stores that had been in operation for the 12-month period ended December 26, 2015
Section I – Background Information
Plato’s Closet Drives Parent Company’s $1 Billion Milestone
Plato’s Closet, which surpassed 400 U.S. locations in 2015, was the largest force driving parent company Winmark Corporation to surpass $1 billion in systemwide franchised retail sales for the year.
Sales for the Minneapolis, Minnesota-based Plato’s Closet in 2015 averaged close to $1 million per location, while the top 25 percent of units reached average sales of nearly $1.5 million. That’s slightly greater than the average sales of Once Upon A Child, also franchised by Winmark, whose other brands include Style Encore, Play It Again Sports and Music Go Round.
"If I were considering buying a franchise today, checking territory availability would be one of my first steps. Yet most buyers leave it until last." — Ambrosio, Franchise Chatter
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When I owned a UPS Store, I learned firsthand how much your ZIP code shapes your outcome. I sold my store at a premium because my territory was in a high-value area. The best areas go first, and once they're gone, they're gone. Enter your ZIP code, and a territory specialist will walk you through the franchises still available near you, drawing on information that isn't publicly accessible — saving you months of wasted research.Top Retail Franchise on Franchise 500 List
In Entrepreneur’s 2016 Franchise 500 list, Plato’s Closet was ranked 105th and was ranked as the top retail franchise. The resale franchise posted 7.1 percent unit growth for one year with 31 units added, and had 14.4 percent three-year growth with 63 units added. The brand, ranked in the Top 500 for the past 11 years in a row, jumped from No. 153 to No. 102 in 2011 and has been fairly steady since, with a slight drop in 2014 to No. 115. Plato’s Closet was ranked 108th in 2015.
Plato’s Closet also was No. 4 in the $150K-$500K category on Forbes’ list of Best Franchises to Buy in June 2015.
The chain continues to enjoy steady growth with increased units each year. Plato’s Closet finished 2015 with 439 units: 427 U.S. locations and 12 Canadian stores, up from 399 and nine respectively in 2014. A decade ago, the brand had 171 locations, all in the U.S. The first Canadian location debuted in 2007 as Plato’s Closet surpassed 200 locations.
Brand’s Name Sparked By Greek Philosopher’s Ideas
Plato’s Closet was founded in Columbus, Ohio, in 1998 by Lynn and Dennis Blum. Their teenage son, who had researched Plato, the Greek philosopher, for a school project, came up with the store’s name due to the respect he had for Plato, whose theories for reusing and preservation were in line with his parents’ creative recycling habits. The business prospered and began franchising the following year.
Stores Buy and Sell Name-Brand Clothing, Accessories, More
Plato’s Closet buys and sells quality, name-brand teen and young adult clothing items that are fashionable and in good condition. The stores also buy and sell used fashion accessories, CDs, books, games and other items enjoyed by teenagers.
"I've seen too many serious franchise buyers fall in love with a brand only to discover their territory is gone by the time they contact the franchisor. This tool was built to prevent exactly that." — Ambrosio, Franchise Chatter
⏳Find Out Which Franchises Are Still Available in Your Area Before It's Too Late
Most franchise buyers spend months researching brands and building excitement — unaware that their preferred territory could be snapped up at any moment. By the time they contact the franchisor, their preferred territory may already be taken. Enter your ZIP code to see which franchises are still available near you — before someone else claims that territory.Merchandise is priced at up to 70 percent less than new retail. Because the prices are low for these name-brand items, young shoppers can score a larger back-to-school wardrobe than they would at the full retail prices.
"Multi-unit ownership is where the real wealth in franchising is built. It starts with one key decision: choosing a brand with enough territory runway to grow into." — Ambrosio, Franchise Chatter
📈Dreaming of Multi‑Unit Success? Lock In Prime Territories Before They're Gone.
Colin started as a team member at 21 and now owns 6 locations in Tampa Bay. Lisa came from marketing and built 21 in San Diego. The most successful multi-unit owners move early and secure markets with room to grow. Use our free tool to search multiple ZIP codes and find franchises where you can still stack locations — before someone else does. A franchise specialist will be in touch to present what's available.Used items accepted by the stores are paid for on the spot. Sellers may accept payment for their items, or they may choose to put the money toward purchases. Buyers who purchase clothing and other merchandise may end up being sellers as they bring their items back after a period of time, provided the items are still in style.
Section II – Estimated Costs
- Please click here for detailed estimates of Plato’s Closet franchise costs, based on Item 7 of the company’s 2016 FDD.
Section III – Financial Performance Representations (Item 19, 2016 FDD) and Analysis
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