In this FDD Talk 2017 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 2017 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Plato’s Closet franchise, based on Items 5 and 6 of the company’s 2017 FDD
- Section IV – Presentation and analysis of Plato’s Closet’s financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
- 2016 average, high, and low gross sales and average gross profit of the 434 franchised Plato’s Closet stores in the United States and Canada that had been in operation by the same franchisee or owners for the 12-month period ended December 31, 2016, grouped by year opened (2015, 2014, 2013, 2012, 2011, and 2010 and prior)
- 2016 average gross sales for the first, second, third, and fourth quartiles of the 434 franchised Plato’s Closet stores that had been in operation for the 12-month period ended December 31, 2016 and submitted complete information to the franchisor
Section I – Background Information
12 Things You Need to Know About the Plato’s Closet Franchise
New Locations Opened in the U.S. and Canada
1. Plato’s Closet opened several new locations in 2016 throughout the United States and Canada. Some of the new locations were opened in Ontario, New Hampshire, Mississippi, and Massachusetts. The company hopes to continue expansion across the U.S. and Canada in 2017.
Using flok Messaging App to Connect with Loyal Customers
2. Sometime last year, Plato’s Closet began using a third-party messaging application called flok to connect with loyal customers. With flok, each Plato’s Closet location can message customers when they are in stores or send messages out to customers using flok nearby.
3. According to Steve Munzer, a franchisee with several Plato’s Closet locations in Florida, using flok makes it easy to create lasting relationships with customers and drive loyalty. Some of the ways franchisees use flok are to send out birthday messages, weekly specials and offers, and reminders to come back and visit Plato’s Closet.
4. Customers can use flok to send a direct message to Plato’s Closet, make in-app purchases, and earn rewards using a digitized version of a loyalty punch card.
Offering Name Brands at Discounted Price
5. Like all the other resale franchises owned by the Winmark Corporation, Plato’s Closet promotes frugality and reuse. Each Plato’s Closet location buys and sells gently used, current teen and young adult clothing.
6. After buying items from customers, Plato’s Closet resells the clothing at a discounted price, which is typically 70 percent less than retail.
7. Each store usually buys clothing and accessories for both young men and women, shoes, handbags, jewelry, and athletic gear. Some of the brands that Plato’s Closet likes to buy include: Forever 21, Free People, H&M, Victoria Secret, Lululemon, Hollister, and Top Shop.
8. In addition to being a great place to save money while shopping, selling items to Plato’s Closet is a way for teens to earn money for the clothes they no longer want. Plato’s Closet makes selling items easy as no appointments are necessary, and if items meet the location’s standards/needs, the seller will receive money on the spot.
9. The first Plato’s Closet location was opened in 1998 and franchising began a year later. Today, the company is owned by the Winmark Corporation, which owns four other resale franchises.
10. As of 2017, Plato’s Closet has over 440 locations in the United States and Canada.
Entrepreneur’s Franchise 500
11. Plato’s Closet has ranked on Entrepreneur’s annual Franchise 500 list every year in the past decade. The company’s highest rank was No. 97 in 2012 while its lowest rank was No. 153 in 2010.
12. The company also ranked as Entrepreneur magazine’s No. 1 Retail Franchise for the third consecutive year in 2017.
Section II – Estimated Costs
- Please click here for detailed estimates of Plato’s Closet franchise costs, based on Item 7 of the company’s 2017 FDD (updated).
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Plato’s Closet’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2017 FDD.