- 2023 Franchise 500 Rank
#383 Ranked #342 last year
- Initial investment
$274K - $466K
- Units as of 2022
75 2.7% over 3 years
In 1983, Closet Factory opened its doors to the world, giving customers the first truly custom closets. The company, which is based in Los Angeles, California, decided that it was time to make providing custom closet and storage systems to customers a priority.
By presenting customers with a wide variety of options and the freedom to design and own their closets, Closet Factory built a reputation of craftsmanship and innovation in the multi-billion dollar storage industry. Since franchising in 1985, Closet Factory has expanded its reach, opening nearly 70 units across the U.S.
As Closet Factory looks for qualified franchisees to join its growing franchise family, it seeks creative individuals with a passion for organizing spaces.
Why You May Want to Start a Closet Factory Franchise
Closet Factory is regarded as one of the market leaders in the closet industry. To customers, the Closet Factory's appeal is its ability to find the best solutions for closet needs, paying attention to the smallest details with each assignment.
A factor that Closet Factory believes separates it from its competition is its unique value proposition, which personalizes storage solutions to match each customer's tastes and preferences. Closet Factory provides smart one-on-one solutions to each customer's style, adds value, and organizes their home spaces, garage cabinets, and wall units.
Operating a Closet Factory franchise can empower franchisees with the ability to transform their lives while impacting customers each day. The convenience and flexibility offered by Closet Factory's built-in storage systems can save time and costs for customers and franchisees.
What Might Make a Closet Factory Franchise a Good Choice?
Closet Factory is considered to be a top option in the home improvement industry. Entrepreneur has ranked it in its Franchise 500 multiple times in recent years. This ranking is based on an evaluation of more than 150 data points in the areas of costs and fees, size and growth, franchisee support, brand strength, and financial strength and stability.
As you explore the franchise opportunity with Closet Factory, make sure to research the local market and customer needs. Ample market research may help during site selection.
Be prepared to invest financially with a Closet Factory franchise. Costs will include a franchise fee, net worth requirement, and cash requirement. A royalty fee will also be necessary to become a franchisee with Closet Factory. The franchise term for Closet Factory franchisees is five years, and if the franchise is successful, you may be allowed to renew the agreement.
How Do You Open a Closet Factory Franchise?
As you progress with Closet Factory, you may learn about the company and its targeted research. You may also receive a Franchise Disclosure Document to sign as part of the exploration process.
If chosen to proceed as a franchisee, you may need to complete training in Los Angeles, California. Closet Factory expects franchisees to attend around 50 hours of classroom training and 40 hours of on-the-job training. To efficiently run a franchise, you'll need six employees, which makes the preparation important.
Closet Factory believes in preparing franchisees each step of the way, and this assistance extends to operational and marketing support once a location is opened. As a Closet Factory franchisee, you can benefit from the brand's extensive experience in innovation and possibly be part of the closet success story.
About Closet Factory
|Related Categories||Organization/Storage Systems, Miscellaneous Home-Improvement Businesses|
|Parent Company||Closet Factory Franchise Corp.|
|Leadership||Dan Grandon, President|
12800 S. Broadway
Los Angeles, CA 90061
|Social||Facebook, Twitter, LinkedIn, Instagram, YouTube, Pinterest|
|Franchising Since||1985 (2023-1985 years)|
|# of employees at HQ||110|
This company is offering new franchisees throughout the US.
This company is offering new franchisees worldwide.
|# of Units||75 (as of 2022)|
Information for Franchisees
Here's what you need to know if you're interested in opening a Closet Factory 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.
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.
|$273,500 - $466,000|
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.
Definition: The minimum liquid capital you must have available in order to qualify to become a franchisee of this company.
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.
Term of Agreement
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?||Yes|
Some franchisors offer in-house financing, while others have relationships with third-party financing sources to which they refer qualified franchisees.
|Third Party Financing||Closet Factory has relationships with third-party sources which offer financing to cover the following: franchise fee, startup costs, equipment, inventory, accounts receivable, payroll|
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||39-44 hours|
|Classroom Training||47-51 hours|
Meetings & Conventions
Security & Safety Procedures
Franchisee Intranet Platform
Additional details about running this franchise.
|Is absentee ownership allowed?||No|
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||8-10|
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.
Interested in ownership opportunities like Closet Factory? Request a free consultation with a Franchise Advisor now.
Franchise 500 Ranking History
Compare where Closet Factory landed on this year's Franchise 500 Ranking versus previous years.
Curious to know where Closet Factory ranked on other franchise lists? Find out below.
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