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- 2022 Franchise 500 Rank
#354 Ranked #335 last year
- Initial investment
$256K - $395K
- Units as of 2021
486 1.5% over 3 years
Here’s what you need to know if you’re interested in opening a Plato's Closet franchise.
The perfect candidate for a Plato's Closet franchise has a love of fashion, style, and community to go along with with a passion for sustainability.
Plato's Closet, which was founded in 1998, is one of the leading second-hand brand-name clothes and accessories stores in North America. They buy and sell gently used brand-name clothing and accessories that specifically appeal to youth. With over 475 locations, their brand is all about affordable fashion, inclusivity, and enhancing style.
You typically do not need expertise in fashion, but instead a willingness to provide quality style options to the community. Plato's Closet may give you the training you need to run your business.
Why You May Want to Start a Plato's Closet Franchise
Running a Plato's Closet franchise means you can buy gently used clothes from people and sell them to others. You also get to own one of the leading stores directed at teenagers, providing a client base that is unique and typically ready to buy. They resell brand names like Uggs, Adidas, Aéropostale, and more at a fraction of the price. They are firm in their beliefs that fashion should come with community and sustainability.
A Plato's Closet franchise might be an excellent opportunity to become part of the fashion industry. Being a Winmark brand, they have established themselves as a retail franchise leader in the resale space with affordable prices and great finds.
What Might Make a Plato's Closet Franchise a Good Choice?
Many times since its founding, Plato's Closet has been ranked in Entrepreneur’s Franchise 500. 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.
To be part of Plato's Closet team, you should make sure you’re financially ready for an initial investment consisting of a franchise fee and other startup costs. You’ll want to make sure you have enough capital available to cover ongoing fees, as well. These ongoing fees will include royalty, advertising, and potential renewal fees.
How Do You Open a Plato's Closet Franchise?
To start a Plato's Closet franchise, you can fill out a franchise inquiry form. A Plato's Closet franchise representative may reach out to you to begin the franchise process by first checking your financial qualifications. You might then have meetings with other franchisees to hear about their experience as Plato’s Closet franchisees.
You usually have to visit Plato's Closet corporate headquarters in Minneapolis, Minnesota for discovery day to get more information from the franchise team. They will also use this opportunity to learn more about you and your potential fit with the franchise. Once you have signed on board, you generally attend their intensive training program that will help equip you to run the business. Plato's Closet is ready to support your franchise every step of the way. Soon you may be opening your door to excited customers ready to buy name-brand items.
About Plato's Closet
- Franchising Since
- 1999 (23 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
- 486 (as of 2021)
Information for Franchisees
Here’s what you need to know if you’re interested in opening a Plato's Closet 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
- $255,700 - $394,600
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
- $90,000 - $105,000
Definition: The minimum liquid capital you must have available in order to qualify to become a franchisee of 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
- 10 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.
- Third Party Financing
- Plato's Closet has relationships with third-party sources which offer financing to cover the following: franchise fee, startup costs, equipment, inventory
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
- 16 hours
- Classroom Training
- 50 hours
- Ongoing Support
Purchasing Co-opsNewsletterMeetings & ConventionsToll-Free LineGrand OpeningOnline SupportSecurity & Safety ProceduresLease NegotiationField OperationsSite SelectionProprietary SoftwareFranchisee Intranet Platform
- Marketing Support
Co-op AdvertisingAd TemplatesNational MediaRegional AdvertisingSocial MediaSEOWebsite DevelopmentEmail MarketingLoyalty Program/App
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 Plato's Closet landed on this year’s Franchise 500 Ranking versus previous years.
Curious to know where Plato's Closet 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 Plato's Closet.
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