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- 2022 Franchise 500 Rank
#206 Ranked #403 last year
- Initial investment
$152K - $428K
- Units as of 2021
71 16.4% over 3 years
Here’s what you need to know if you’re interested in opening a Closets By Design franchise.
Founded in 1982, Closets By Design creates beautiful and functional closets, in-home offices, garage cabinets, and entertainment centers. As a franchisee, you'll be required to manufacture and produce all the products and handle the installation process.
Closets By Design works under the umbrella of Home Organizers and has been franchising since 1998. As a company, they've grown to over 50 franchises in the United States, as well as several in Canada.
Why You May Want to Start a Closets By Design Franchise
After years of operation, quality solutions have been Closets By Design's identity. This identity may favor the franchisee. Customers may know what to expect from owning Closets by Design products. In addition to this, the company's proprietary customer relationship management system may help in the enterprise's daily operations.
Closets By Design typically offers exclusive territories under a business and sales model that proves to work time and again. No other franchisee from this company is permitted to operate in a domain that has already been claimed, potentially giving you plenty of customers to serve. With the availability of an exclusive territory to run and manage, franchisees may only need a team of several employees to operate efficiently.
What Might Make a Closets By Design Franchise a Good Choice?
To be part of the Closets by Design franchise team, you should make sure you're financially ready for an initial investment made up of a franchise fee and other startup costs. In addition, you should prepare yourself for the existence of ongoing fees that will include advertising, royalty, and potential renewal fees. Franchisees will also need to meet the company's set net worth and liquid capital requirements.
Closets by Design may offer qualified franchisees in-house financing to cover accounts receivable costs, inventory costs, and payroll costs. They also have relationships with third-party financing sources that may provide funds to cover startup costs, franchise fee, and equipment costs.
How To Open a Closets By Design Franchise
Before making any financial commitment or signing an agreement, you must perform your due diligence and establish if this is the right opportunity for you. As part of your due diligence process, speak to existing franchisees so you can learn more about what it means to open a Closets By Design franchise. Additionally, research the brand and your local area to see if a Closets By Design franchise would do well in your community. While competition is healthy, too much of it may not allow for the most possible growth.
When deciding if opening a Closets By Design franchise is the right decision for you, franchisees may take part in initial training programs. Initial training programs educate franchisees on service delivery and production to meet the clients' standards and expectations. On-the-job training will last for an extensive period of time, as will classroom training.
Various ongoing support is available to help franchisees during daily franchise operations. Support includes weekly newsletters, meetings and conventions, lease negotiation, field operations, site selection, grand opening support, a toll-free line, online support, and a company intranet platform. Additional marketing support includes ad templates, regional advertising, co-op advertising, national media, SEO, website development, email marketing, and more.
About Closets By Design
- Franchising Since
- 1998 (24 years)
- # of employees at HQ
- Where seeking
This company is seeking new franchisees throughout the US.
This company is seeking new franchisees in the following international regions: Canada
- # of Units
- 71 (as of 2021)
Information for Franchisees
Here’s what you need to know if you’re interested in opening a Closets By Design franchise.
Financial Requirements & Ongoing Fees
Here’s what you can expect to spend to start the business and what ongoing fees the franchisor charges throughout the life of the business.
- Initial Franchise Fee
Definition: The initial fee paid to a franchisor to join their system
What you need to know: Found in Item 5 of the FDD, this may be a flat fee, or may vary based on territory size, experience, or other factors.The franchise fee is an up-front (one-time) cost that a new franchisee pays to the franchisor. This fee is usually due at the signing of the franchise agreement and covers the right to use the franchisor's trademarks, name, and related business systems.
- Initial Investment
- $152,000 - $428,000
Definition: The total amount necessary to begin operation of the franchise
What you need to know: The initial investment includes the franchise fee, along with other startup expenses such as real estate, equipment, supplies, business licenses, and working capital. This is outlined in a chart in Item 7 of the FDD, showing a range of possible costs from low to high.
- Net Worth Requirement
Definition: The minimum net worth you must have in order to qualify to become a franchisee of this company
What you need to know: Net worth is the value of a person's assets minus liabilities. Assets include cash, stocks, retirement accounts, and real estate. Liabilities include items like mortgages, car payments, and credit card debt.
- Cash Requirement
Definition: The minimum liquid capital you must have available in order to qualify to become a franchisee of this company.
- Veteran Incentives
- 10% off franchise fee
Definition: A discount or other incentive offered to military veterans who buy a franchise with this company.
- Royalty Fee
Definition: A ongoing fee paid to the franchisor on a regular basis.
What you need to know: Most franchisors require franchisees to pay an ongoing royalty fee, which is detailed in Item 6 of the FDD. This fee is typically a percentage of weekly or monthly gross sales, but may also be a flat weekly, monthly, or annual fee.
- Ad Royalty Fee
Definition: An going fee paid to the franchisor on a regular basis to support advertising or marketing efforts.
What you need to know: This may also be called advertising fee, marketing fee, brand fund fee, and more, but the basic purpose is the same-- to support promotion of the brand systemwide. As with the royalty fee, it is detailed in Item 6 of the FDD, and can be a percentage of weekly or monthly gross sales or a weekly, monthly, or annual fee.
- Term of Agreement
- 5 years
Definition: The length of time your franchise agreement will last.
What you need to know: Franchise terms are typically anywhere from 5 to 20 years in length, but are sometimes instead dependent on factors such as the term of your lease. Once your term is up, you may have the option to renew your agreement, typically for a smaller fee than the original franchise fee.
- Is franchise term renewable?
Some franchisors offer in-house financing, while others have relationships with third-party financing sources to which they refer qualified franchisees.
- In-House Financing
- Closets By Design offers in-house financing to cover the following: inventory, accounts receivable, payroll
- Third Party Financing
- Closets By Design has relationships with third-party sources which offer financing to cover the following: franchise fee, startup costs, equipment
Training & Support Offered
Franchisors offer initial training programs and a variety of ongoing support options to help franchisees run their businesses.
- On-The-Job Training
- 144 hours
- Classroom Training
- 80 hours
- Ongoing Support
NewsletterMeetings & ConventionsToll-Free LineGrand OpeningOnline SupportLease NegotiationField OperationsSite SelectionProprietary SoftwareFranchisee Intranet Platform
- Marketing Support
Co-op AdvertisingAd TemplatesNational MediaRegional AdvertisingMarketing Planning & SupportSocial MediaSEOWebsite DevelopmentEmail Marketing
Additional details about running this franchise.
- Is absentee ownership allowed?
Definition: Absentee ownership means that the franchisee does not actively work in the franchise business or manage day-to-day operations.
- Can this franchise be run from home/mobile unit?
Definition: The business can be run from your home and/or a vehicle, and it is not necessary to have a retail facility, office space, or warehouse.
- Can this franchise be run part time?
Definition: This business can be run by the owner on a part-time basis (less than 40 hours per week) and/or as a side business; it is not necessary for the business to be open/run full-time.
- # of employees required to run
- Are exclusive territories available?
Definition: An exclusive territory is a fixed area in which you are given the right to operate and in which no other units of the same franchise may be opened.
What you need to know: Territory size may be based on factors such as radius, population size, zip codes, and more. Details can be found in Item 12 of the FDD.
Franchise 500 Ranking History
Compare where Closets By Design landed on this year’s Franchise 500 Ranking versus previous years.
Curious to know where Closets By Design ranked on other franchise lists? Find out below.
Are you eager to see what else is out there? Browse more franchises that are similar to Closets By Design.
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