In this exclusive Franchise Chatter FDD Talk post, you’ll learn the following:
Section I – Estimated initial investment (franchise costs) for a Closets by Design franchise, based on Item 7 of the company’s 2023 FDD
Section II – Initial franchise fee, royalty fee, and marketing fee for a Closets by Design franchise, based on Items 5 and 6 of the company’s 2023 FDD
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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.Section III – Number of franchised and company-owned Closets by Design outlets at the start of the year and the end of the year for 2020, 2021, and 2022, based on Item 20 of the company’s 2023 FDD
Section IV – News updates on the Closets by Design franchise opportunity
Section V – Presentation and analysis of Closets by Design’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2023 FDD, including information on the:
- 2022 average and median annual sales, closing ratio, and average and median sale for the 55 franchised Closets by Design businesses that were open for 12 months or longer as of December 31, 2022
- 2022 average and median annual sales, closing ratio, and average and median sale for the 55 franchised Closets by Design businesses that were open for 12 months or longer as of December 31, 2022, broken down by quartile
- 2022 average and median annual sales, closing ratio, and average and median sale for the 69 franchised Closets by Design territories that were open for 12 months or longer as of December 31, 2022
- 2022 average and median annual sales, closing ratio, and average and median sale for the 69 franchised Closets by Design territories that were open for 12 months or longer as of December 31, 2022, broken down by quartile
Section VI – Key ratios, comparables, computations, and analyses for the Closets by Design franchise opportunity (exclusive content for Platinum subscribers)
Section I – Closets by Design Franchise Costs
- Closets by Design franchise costs, based on Item 7 of the company’s 2023 FDD:
- 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): $35,000 to $250,000
- Grand Opening Advertising: $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/Rental 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 for First 3 Months: $25,000 to $75,000
- Total Estimated Closets by Design Franchise Costs: $152,000 to $507,000
Section II – Closets by Design’s Initial Franchise Fee, Royalty Fee, and Marketing Fee
- Closets by Design’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2023 FDD:
- Initial Franchise Fee: $20,000
- Continuing Royalty: the greater of (i) 6.75% of your previous month’s Gross Revenues, or (ii) the “Minimum Royalty” of $3,000 per month
- National Promotion and Protection Fund Contribution: 2.25% of monthly Gross Revenues
Section III – Number of Franchised and Company-Owned Closets by Design Outlets
Franchised
2020
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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.🔴Free Webinar: 6 Under-the-Radar Franchise Concepts That Serious Buyers Should Know
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- Outlets at the End of the Year: 60
- Net Change: +3
2021
- Outlets at the Start of the Year: 60
- Outlets at the End of the Year: 65
- Net Change: +5
2022
- Outlets at the Start of the Year: 65
- Outlets at the End of the Year: 66
- Net Change: +1
Company-Owned
2020
- Outlets at the Start of the Year: 6
- Outlets at the End of the Year: 6
- Net Change: 0
2021
- Outlets at the Start of the Year: 6
- Outlets at the End of the Year: 7
- Net Change: +1
2022
🎯Find Best-Fit Franchises Still Available in Your Target Area (Free Tool)
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.📈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.- Outlets at the Start of the Year: 7
- Outlets at the End of the Year: 6
- Net Change: -1
Section IV – News Updates on the Closets by Design Franchise
Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Closets by Design Franchise (Item 19, 2023 FDD)
Part 1 – 2022 Fiscal Year End Financial Information for All Mature Franchised Businesses
- In Parts 1 and 2 below, Closets by Design sets forth the historic performance information based on the 2022 fiscal year for the 55 franchised Closets by Design Businesses that were open for 12 months or longer as of December 31, 2022 (“Mature Franchised Businesses”).
- For the purposes of this Item 19, a Franchised Business refers to the umbrella business formed and operated by each Closets by Design franchisee. In many cases, a single Franchised Business will comprise of multiple territories individually purchased by a franchisee and governed by their own respective franchise agreement.
- Financial performance information regarding the 7 non-franchised Closets by Design Businesses owned and operated by the franchisor’s affiliate CBDI is not included in this Item 19 disclosure.
- Part 1 below sets forth certain financial information based upon all Mature Franchised Businesses as of the 2022 fiscal year. Part 2 below breaks the information set forth in Part 1 into four quartiles of performance (i.e., the highest 25% of all Mature Franchised Businesses to the lowest 25% of all Mature Franchised Businesses).
- Average Annual Sales: $9,030,016
- Median Annual Sales: $6,175,089
- Closing Ratio %: 50.57%
- Average Sale: $5,647
- Median Sale: $5,578
- As of December 31, 2022, there were 55 Mature Franchised Businesses. Of these 55 Mature Franchised Businesses, 19 (or 34.5%) met or exceeded the Average Annual Sales, with the highest Annual Sales earned being $31,920,814 and the lowest Annual Sales earned being $1,431,006.
- As of December 31, 2022, there were 55 Mature Franchised Businesses. Of these 55 Mature Franchised Businesses, 25 (or 45.5%) met or exceeded the Average Sale, with the highest Average Sale being $7,606 and the lowest Average Sale being $3,673.
Part 2 – 2022 Fiscal Year End Financial Information for Mature Franchised Businesses, Broken Down by Quartile
Highest 25% (13 Mature Franchised Businesses)
- Average Annual Sales: $19,233,408
- Median Annual Sales: $15,932,452
- Closing Ratio %: 55.5%
- Average Sale: $5,966
- Median Sale: $5,900
Second 25% (14 Mature Franchised Businesses)
- Average Annual Sales: $8,920,870
- Median Annual Sales: $8,399,294
- Closing Ratio %: 51.7%
- Average Sale: $5,752
- Median Sale: $5,794
Third 25% (14 Mature Franchised Businesses)
- Average Annual Sales: $5,550,766
- Median Annual Sales: $5,744,287
- Closing Ratio %: 51.4%
- Average Sale: $5,528
- Median Sale: $5,362
Lowest 25% (14 Mature Franchised Businesses)
- Average Annual Sales: $3,143,833
- Median Annual Sales: $3,479,924
- Closing Ratio %: 44.0%
- Average Sale: $5,365
- Median Sale: $5,206
- As of December 31, 2022, there were 55 Mature Franchised Businesses, of which 13 performed in the highest 25% of all Mature Franchised Businesses (“First Quartile Businesses”). Of these 13 First Quartile Businesses, 13 (or 100%) met or exceeded the Average Annual Sales, with the highest Annual Sales earned being $31,920,814 and the lowest Annual Sales earned being $14,000,903; and 10 (or 77%) met or exceeded the Average Sale, with the highest Sale being $7,222 and the lowest Sale being $4,634.
- As of December 31, 2022, there were 55 Mature Franchised Businesses, of which 14 performed in the second highest 25% of all Mature Franchised Businesses (“Second Quartile Businesses”). Of these 14 Second Quartile Businesses, 6 (or 43%) met or exceeded the Average Annual Sales, with the highest Annual Sales earned being $12,466,212 and the lowest Annual Sales earned being $6,552,524; and 8 (or 57%) met or exceeded the Average Sale, with the highest Sale being $6,853 and the lowest Sale being $4,774.
- As of December 31, 2022, there were 55 Mature Franchised Businesses, of which 14 performed in the third highest 25% of all Mature Franchised Businesses (“Third Quartile Businesses”). Of these 14 Third Quartile Businesses, 0 (or 0%) met or exceeded the Average Annual Sales, with the highest Annual Sales earned being $6,175,089 and the lowest Annual Sales earned being $4,672,359; and 4 (or 29%) met or exceeded the Average Sale, with the highest Sale being $6,667 and the lowest Sale being $4,806.
- As of December 31, 2022, there were 55 Mature Franchised Businesses, of which 14 performed in the fourth highest 25% of all Mature Franchised Businesses (“Fourth Quartile Businesses”). Of these 14 Fourth Quartile Businesses, 0 (or 0%) met or exceeded the Average Annual Sales, with the highest Annual Sales earned being $4,517,469 and the lowest Annual Sales earned being $1,431,006; and 4 (or 29%) met or exceeded the Average Sale, with the highest Sale being $7,606 and the lowest Sale being $3,673.
Part 3 – 2022 Fiscal Year End Financial Information for All Mature Franchised Territories
- In Parts 3 and 4 below, Closets by Design sets forth the historic performance information based on the 2022 fiscal year for the 69 franchised Closets By Design territories that were open for 12 months or longer as of December 31, 2022 (“Mature Franchised Territories”).
- For the purposes of this Item 19, a Franchised Territory refers to the single territory individually purchased by a franchisee and governed by its own franchise agreement. Some franchisees operate a Franchised Business comprised of multiple Franchised Territories.
- Part 3 below sets forth certain financial information based upon all Mature Franchised Territories as of the 2022 fiscal year. Part 4 below breaks the information set forth in Part 3 into four quartiles of performance (i.e., the highest 25% of all Mature Franchised Territories to the lowest 25% of all Mature Franchised Territories).
- Average Annual Sales: $7,197,839
- Median Annual Sales: $5,040,730
- Closing Ratio %: 51.2%
- Average Sale: $5,673
- Median Sale: $5,581
- As of December 31, 2022, there were 69 Mature Franchised Territories. Of these 69 Mature Franchised Territories, 20 (or 29%) met or exceeded the Average Annual Sales, with the highest Annual Sales earned being $31,920,814 and the lowest Annual Sales earned being $643,466.
- As of December 31, 2022, there were 69 Mature Franchised Territories. Of these 69 Mature Franchised Territories, 32 (or 46%) met or exceeded the Average Sale, with the highest Sale being $7,606 and the lowest Sale being $3,673.
Part 4 – 2022 Fiscal Year End Financial Information for Mature Franchised Territories, Broken Down by Quartile
Highest 25% (17 Mature Franchised Territories)
- Average Annual Sales: $16,220,991
- Median Annual Sales: $14,156,081
- Closing Ratio %: 55.4%
- Average Sale: $5,990
- Median Sale: $5,937
Second 25% (17 Mature Franchised Territories)
- Average Annual Sales: $6,378,019
- Median Annual Sales: $6,410,022
- Closing Ratio %: 51.3%
- Average Sale: $5,651
- Median Sale: $5,581
Third 25% (17 Mature Franchised Territories)
- Average Annual Sales: $4,152,112
- Median Annual Sales: $3,978,258
- Closing Ratio %: 48.1%
- Average Sale: $5,423
- Median Sale: $5,260
Lowest 25% (18 Mature Franchised Territories)
- Average Annual Sales: $2,326,766
- Median Annual Sales: $2,480,431
- Closing Ratio %: 50.0%
- Average Sale: $5,630
- Median Sale: $5,267
- As of December 31, 2022, there were 69 Mature Franchisees, of which 17 performed in the highest 25% of all Mature Franchisees (“First Quartile Businesses”). Of these 17 First Quartile Businesses, 17 (or 100%) met or exceeded the Average Annual Sales, with the highest Annual Sales earned being $31,920,814 and the lowest Annual Sales earned being $7,909,129; and 13 (or 76%) met or exceeded the Average Sale, with the highest Sale being $7,222 and the lowest Sale being $4,634.
- As of December 31, 2022, there were 69 Mature Franchisees, of which 17 performed in the second highest 25% of all Mature Franchisees (“Second Quartile Businesses”). Of these 17 Second Quartile Businesses, 3 (or 18%) met or exceeded the Average Annual Sales, with the highest Annual Sales earned being $7,809,717 and the lowest Annual Sales earned being $5,106,656; and 7 (or 41%) met or exceeded the Average Sale, with the highest Sale being $6,667 and the lowest Sale being $4,774.
- As of December 31, 2022, there were 69 Mature Franchisees, of which 17 performed in the third highest 25% of all Mature Franchisees (“Third Quartile Businesses”). Of these 17 Third Quartile Businesses, 0 (or 0%) met or exceeded the Average Annual Sales, with the highest Annual Sales earned being $5,040,730 and the lowest Annual Sales earned being $3,298,652; and 6 (or 35%) met or exceeded the Average Sale, with the highest Sale being $7,222 and the lowest Sale being $3,673.
- As of December 31, 2022, there were 69 Mature Franchisees, of which 18 performed in the fourth highest 25% of all Mature Franchisees (“Fourth Quartile Businesses”). Of these 18 Fourth Quartile Businesses, 0 (or 0%) met or exceeded the Average Annual Sales, with the highest Annual Sales earned being $3,217,131 and the lowest Annual Sales earned being $643,466; and 7 (or 39%) met or exceeded the Average Sale, with the highest Sale being $7,606 and the lowest Sale being $4,843.
- “Annual Sales” means the grand total of all contracts sold for the reported fiscal year, exclusive of any documented refunds, chargebacks, credits, and allowances that are given in good faith to customers; and all sales, use, or similar taxes that are legally charged to customers (if such taxes were added, the taxes charged to the customers).
- The closing ratio percentage is the ratio of (x) the number of sales to different customers to (y) the number of different potential customers seen (with any potential customer seen more than once being counted as only one potential customer), expressed as a percentage.
- “Sale” refers to the total contract price exclusive of documented refunds, chargebacks, credits, and allowances that are given in good faith to customers; and all sales, use, or similar taxes that are legally charged to customers (if such taxes were added, the taxes charged to the customers).
- Some outlets have earned this amount. Your individual results may differ. There is no assurance you will earn as much.
Section VI – Closets by Design Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️
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