About Closet Factory Franchise
Closet Factory is a custom storage solutions franchise specializing in the design, manufacturing, and installation of custom closets and organizational systems.
The business serves consumers, home builders, and commercial clients with tailored storage products.
The franchise fee is $58,500, and the brand has been franchising since 1985.
Closet Factory Franchise Cost & Fees
Minimum Investment
$274K
Average Investment
$370K
Maximum Investment
$466K
| Fee Type | Amount | Notes |
|---|---|---|
| Initial Franchise Fee | $58,500 | One-time payment upon signing |
| Royalty Fee | 6.75% of Gross Receipts or $975 per week of gross sales | Ongoing; paid monthly |
| Marketing/Ad Fund | Minimum of 15% of Gross Receipts | National brand fund |
| Total Investment Range | $273,500 – $466,000 | Includes build-out, inventory, working capital |
The investment range of $274K–$466K reflects variability in build-out costs, store size, lease terms, and market. The combined royalty (6.75% of Gross Receipts or $975 per week) and marketing fee (Minimum of 15% of Gross Receipts) are ongoing costs paid as a percentage of gross sales.
Investment Breakdown (Item 7)
| Item | Low | High |
|---|---|---|
| Initial Franchise Fee | $58,500 | $58,500 |
| Site Location(1) | $16,000 | $36,000 |
| Property Improvements(2) | $5,500 | $25,000 |
| Equipment, Fixtures and Furniture(3) | $125,000 | $195,000 |
| Vehicles(4) (Deposit on lease) | $2,500 | $7,500 |
| Signage and Uniforms | $1,000 | $4,000 |
| Product and Supply Inventories | $10,000 | $20,000 |
| Grand Opening Marketing Program | $20,000 | $45,000 |
| Additional Funds - 3 months(5) (6) | $35,000 | $75,000 |
Additional Fees (Item 6)
| Fee Type | Amount |
|---|---|
| Transfer Fee | $18,500 |
| Renewal Fee | $7,000 |
| Technology Fee | $94.68 per month |
| Audit Fee | Cost of audit and understatement plus interest. |
| Promotional Campaigns | To be determined |
| Grand Opening Marketing Program | Minimum of $20,000 |
| Interest and Late Fees on Late Payments or Reports | $75 per payment/Report. Interest on delinquent payments bear interest at the highest applicable legal rate for open account business credit, but not to exceed 1.5% per month. |
| Tuition Fee - Optional Training Programs | Current fee for optional training programs. |
| Regional Leadership Conference / Possible Convention Support Fee | $750.00, per Franchisee, for each Regional Leadership Conference or other meeting designated by us as mandatory. |
| Remedial Training | To be determined |
| Management Fee | $500 per day |
| Potential Customer Lead Referral Fee | A reasonable fee determined in our Business Judgment |
Training Program (Item 11)
| Detail | Information |
|---|---|
| Total Duration | approximately 10 business days |
| Classroom Training | 47 – 51 hours |
| On-the-Job Training | 39 – 44 hours |
| Training Location | Los Angeles, CA or Virtual Communication Platform |
| Additional Training | You and your manager or other supervisorial or managerial personnel must attend additional or refresher training programs, including national and regional conferences, conventions and meetings, as we may reasonably require to correct, improve or enhance your operations, the Closet Factory System and its members. |
Territory Rights (Item 12)
| Detail | Information |
|---|---|
| Territory Type | Non-exclusive |
| Exclusive Territory | No |
| Territory Size | There is no standard minimum area. |
| Description | We award you a franchise to operate a single Traditional Closet Factory Outlet at a single location in a Territory. You are granted a Territory defined by geographic boundaries. The dimensions of your Territory are based upon demographic factors, including, population density and size, geography, zoning, market conditions and other factors we believe relevant. |
Renewal, Termination & Transfer (Item 17)
| Detail | Information |
|---|---|
| Initial Term | 5 years |
| Renewal Term | successive terms of 5 years each |
| Renewal Fee | $7,000 |
| Renewal Conditions | Compliance with the Franchise and all other agreements; compliance with current operational, qualification and training requirements; notice of election to renew; satisfaction of monetary obligations; sign new agreement and General Release; and payment of $7,000 renewal fee. |
| Transfer Fee | $18,500 |
| Transfer Conditions | You must comply with all agreements with us and Franchisor’s affiliates, all leases and sublease with any party, and the Operations Manual and all reporting and payment obligations; Transferee qualifies and assumes your obligations; Closet Factory Outlet must meet specifications and standards and all promissory notes must be paid in full; Transferee completes training program; Transferee must meet our citizenship, literacy and communication requirements; execution of Franchise Agreement and ancillary documents by transferee, including a guarantee executed by transferee’s owners and spouses or domestic partners; payment of $18,500 transfer fee; execution of release; amount financed subordinate to obligations of transferee to us; execution of non-competition agreement; transfer in compliance with applicable leases, laws and regulations; and transfer conditional on continuing indemnification and other surviving obligations. Additional requirements for transfer to a controlled corporation. |
| Termination for Cause | We can terminate you if you commit any one of several listed violations: failure to meet site selection, opening and other requirements; abandon or fail to operate your Closet Factory Outlet for more than 5 consecutive days; surrender or transfer control of business; make any misrepresentations or omissions by you; file for bankruptcy; are convicted of felony; engage in misconduct which unfavorably affects the reputation of the business; make an unauthorized transfer of business; make an unauthorized use of Trademarks or disclose confidential information or violate restrictions on ownership or operation of a Similar Business; misrepresent the Gross Receipts or other amounts due; commit any act or omission of fraud or misrepresentation related to us or any affiliate and/or the Marketing Fund and/or any FMG; receive 5 or more material customer complaints in any 12 month period, whether or not resolved; fail to cooperate with audit or retain records; violate any law applicable to the operating of the franchise; or commit repeated defaults. |
| Non-Compete Period | 2 years |
| Non-Compete Details | Subject to state law, no competing business for 2 years anywhere; no solicitation, diversion or acceptance of Closet Factory customers or potential customers for 2 years. If you violate the post-term covenant not to compete, you must pay us, throughout the 2 year period following the termination, transfer, or expiration of your Franchise Agreement, 5% of all revenue derived from the operation of the Similar Business, including the sale of all products and services and all other income of the business that offers goods or services at or from the Similar Business, which are the same as or similar to the Closet Factory Outlets. |
Operations & Supply (Items 8 & 15)
| Detail | Information |
|---|---|
| Owner-Operator Required | Yes |
| Participation Details | Your Closet Factory Outlet must be personally managed on a full-time basis by a supervisorial or managerial employee who has successfully completed mandatory training and met our then-current standards. We strongly recommend full term on-site management by you, since absentee management involves a greater risk of failure. If you are an entity, all present and future owners of the equity or your voting rights, including spouses and domestic partners, must execute a written Guarantee. |
| Required Suppliers | You must purchase, use and offer such Designated Equipment, Products and Services, as are specified by us. We can designate single or multiple suppliers for any given item or service and may concentrate purchases with one or more suppliers. These suppliers may include, and may be limited to, us or companies affiliated with us. We are an Authorized Supplier for specific jigs and manufacturing pieces. We may supply other items (for which we are not the only Authorized Supplier) to you at your request and will charge you a 15% handling charge on those items you request. We reserve the right to require you to purchase advertising and support services and products from our affiliate, Sierra Support Service, in the future. Currently, the company is an Authorized Supplier. |
| Supply Restrictions | You must not offer or deal with any products or services not approved by us. If we disapprove a particular item, you will not use it. We can approve, revoke or deny approval, of particular items or suppliers. |
| Franchisor Revenue from Suppliers | In the fiscal year ending December 31, 2021, our total revenues were $14,230,103 and our revenue derived from franchisees’ purchases from us and other Authorized Suppliers was $288,121 or 2.02% of our total revenues. Our affiliate, Sierra Support Service’s revenues were $2,285,463 and its revenue derived from franchisees’ purchases was $2,130,140 or 93.20% of its total revenue. |
Closet Factory Franchise Earnings — Item 19
Average Revenue
$5.7M
Median Revenue
$4.3M
Revenue Range
$295K – $35.3M
Sample Size
40 units
Past financial performance does not guarantee future results. Individual results will vary.
Closet Factory Litigation & Risk Flags
Clean Litigation RecordCloset Factory has no pending litigation actions listed in their FDD. There is also no bankruptcy history disclosed.
Litigation and bankruptcy data is sourced from Items 3 and 4 of the FDD. Always verify current status directly from the most recent FDD.
Closet Factory System Growth
Total Units
75
Franchised
69
Company-Owned
6
Closet Factory currently operates 69 franchised locations and 6 company-owned units. Unit count data is sourced from Item 20 of the FDD.
Unit History (Item 20)
| Year | Opened | Closed | Total |
|---|---|---|---|
| 2019 | 3 | 1 | 66 |
| 2020 | 0 | 1 | 65 |
| 2021 | 5 | 2 | 69 |
Transfers: 4 | Closures: 2
State Registrations
Registered in 12 states: CA, HI, IL, IN, MD, MI, MN, NE, NY, ND, OR, RI
Franchisor Financials (Item 21)
Revenue
$14.2M
Closet Factory Franchise — FAQ
The total investment to open a Closet Factory franchise ranges from $273,500 to $466,000, per their Franchise Disclosure Document. This includes the initial franchise fee of $58,500. The investment covers build-out, inventory, equipment, signage, working capital, and other startup costs.
Closet Factory charges a royalty fee of 6.75% of Gross Receipts or $975 per week of gross sales, plus a Minimum of 15% of Gross Receipts contribution to the marketing/advertising fund. These fees are paid on an ongoing basis.
You can download the Closet Factory Franchise Disclosure Document free on this page. The FDD is a public document filed with state franchise registries. Always also request the current FDD directly from Closet Factory to ensure you have the most up-to-date version.
According to the Item 19 financial performance representation in their FDD, Closet Factory franchise owners report average revenue of $5.7M and median revenue of $4.3M. This is based on a sample of 40 units. Past performance does not guarantee future results.
Closet Factory has been franchising since 1985. The FDD shows an investment range of $273,500-$466,000, a 6.75% of Gross Receipts or $975 per week royalty, and includes an Item 19 earnings disclosure. There is no pending litigation. Review the full FDD and contact current franchisees listed in Item 20 before making any investment decision.
The franchise fee is $58,500 and the total investment ranges from $273,500 to $466,000 depending on location size and market. Contact the franchisor directly for current net worth and liquid capital requirements, territory availability, and application details.
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Data Source & Disclaimer: This website is for informational purposes only. It is not an offer to sell or buy a franchise. This profile is based on publicly available FDD data sourced from state franchise registry filings. All information is for research purposes only and does not constitute legal, financial, or investment advice. Data may be outdated or contain errors. Always obtain the current FDD directly from Closet Factory and consult a qualified franchise attorney before making any investment decision. FranchiseOverview.com is operated by Franchising Compliance, LLC and is not affiliated with Closet Factory or any of its subsidiaries. To report an inaccuracy: info@franchiseoverview.com