About Plato's Closet Franchise
Plato's Closet is a franchised retail store concept specializing in the buying and selling of quality used and new brand name teen and young adult clothing and accessories.
Franchisees operate retail locations where they purchase gently used clothing directly from customers at affordable prices and resell those items at substantial savings compared to new merchandise.
The target market includes parents of teenagers, teenagers, and young adults who desire quality brand name clothing and accessories at affordable prices, as well as consumers looking to sell their used items for cash.
Plato's Closet Franchise Cost & Fees
Minimum Investment
$270K
Average Investment
$339K
Maximum Investment
$407K
| Fee Type | Amount | Notes |
|---|---|---|
| Initial Franchise Fee | $25,000 | One-time payment upon signing |
| Royalty Fee | 5% of Gross Sales of gross sales | Ongoing; paid monthly |
| Marketing/Ad Fund | Up to 2% of Gross Sales (if Advertising Fund is established) | National brand fund |
| Total Investment Range | $269,700 – $407,400 | Includes build-out, inventory, working capital |
The investment range of $270K–$407K reflects variability in build-out costs, store size, lease terms, and market. The combined royalty (5% of Gross Sales) and marketing fee (Up to 2% of Gross Sales (if Advertising Fund is established)) are ongoing costs paid as a percentage of gross sales.
Investment Breakdown (Item 7)
| Item | Low | High |
|---|---|---|
| Initial Franchise Fee | $25,000 | $25,000 |
| Fixtures and Supplies | $35,000 | $55,000 |
| Signs | $8,000 | $12,000 |
| Security Cameras | $1,000 | $5,000 |
| Point-of-Sale (POS) System | $25,200 | $32,400 |
| Leasehold Improvements | $12,000 | $20,000 |
| Build-Out | $18,000 | $50,000 |
| Deposits and Business Licenses | $3,000 | $15,000 |
| Opening Inventory | $65,000 | $80,000 |
| Miscellaneous Pre-Opening Expenses | $35,000 | $60,000 |
| Rent - First 3 Months | $12,500 | $20,000 |
| Additional Funds - 3 Months | $30,000 | $33,000 |
Additional Fees (Item 6)
| Fee Type | Amount |
|---|---|
| Transfer Fee | $10,000 |
| Renewal Fee | $10,000 |
| Technology Fee | Currently $0; may be established at $500 to $2,500 per year |
| Audit Fee | Cost and expenses related to audit, payable only if understatement is greater than 2% |
| Marketing Fee | $1,500 per year |
| Cooperative Advertising | Up to 5% of Gross Sales |
| Local Marketing Expenses | Minimum 5% of Gross Sales (combined with cooperative advertising) |
| DRS Maintenance Fee | $1,000 for the term of the Franchise Agreement |
| Interest Expenses | Lesser of 18% per year or maximum rate permitted by law |
Training Program (Item 11)
| Detail | Information |
|---|---|
| Total Duration | Two-part program: First session (NFOT) 5 days, Second session (Concept Training) at least 5 days |
| Classroom Training | 43 hours (22.5 hours first session + 20.5 hours second session) |
| On-the-Job Training | 22.5 hours (9.5 hours first session + 13 hours second session) |
| Training Location | Minneapolis, Minnesota and/or Online |
| Additional Training | Franchisee must participate in an online financial management course. Franchisor may periodically conduct refresher courses, seminars and other programs. |
Territory Rights (Item 12)
| Detail | Information |
|---|---|
| Territory Type | Exclusive |
| Exclusive Territory | Yes |
| Territory Size | Typically a 3 to 5 mile radius around the Store |
| Description | Computer modeled mapping factoring population density, average household income and consumer traffic patterns determines boundaries. Urban areas (metropolitan areas with population over 250,000) generally have a minimum population of 75,000 to 100,000 persons. All other areas generally have a minimum population of 50,000 persons. No sales volume or market penetration requirements to retain territory. Winmark reserves the right to distribute products through alternative channels including the Internet and to establish businesses under different trademarks inside the territory. |
Renewal, Termination & Transfer (Item 17)
| Detail | Information |
|---|---|
| Initial Term | 10 years |
| Renewal Term | 10 years |
| Renewal Fee | $10,000 |
| Renewal Conditions | Provide written notice at least 180 days before end of term, comply with all material provisions of agreement, remodel/modernize store to current standards, pay renewal fee at least 30 days before expiration, execute then-current franchise agreement (which may have materially different terms), secure renewal or extension of lease or new approved location. |
| Transfer Fee | $10,000 (no transfer fee for transfers to immediate family members) |
| Transfer Conditions | All monetary obligations to Winmark satisfied, franchisee in good standing, transferee qualifies and completes training, transferee assumes existing agreement or signs then-current agreement, purchase price will not adversely affect new franchisee's operations, seller financing subordinated to franchise fees, seller agrees to post-termination obligations. |
| Termination for Cause | Failure to open within 9 months, violation of material provisions (30 days to cure), conviction of felony, failure to conform to Business System standards, failure to pay fees, insolvency, abandonment, impairment of goodwill, lease expiration, default in other Winmark agreements, frequent customer/employee complaints, failure to cooperate with audit, violation of non-compete. |
| Non-Compete Period | 2 years after termination or expiration |
| Non-Compete Details | No direct or indirect involvement in any resale retail business involving purchase and/or sale of used clothing and accessories for 2 years within 10 miles of the Store or any other Plato's Closet Store. During the term, no involvement in any resale retail business involving used clothing and accessories not offered by Winmark without prior written consent. Period extended for time franchisee is in breach. |
Operations & Supply (Items 8 & 15)
| Detail | Information |
|---|---|
| Owner-Operator Required | Yes |
| Participation Details | If an individual, must be the on-site owner/operator and personally manage the Store unless Winmark gives prior consent to delegate. Primary job responsibility must be the operation of the franchised business. If a corporate entity or partnership, one individual must retain at least 50% of equity and voting interest and personally manage and operate the business. For multiple stores, management duties for additional stores may be delegated to managers who must attend Concept Training. |
| Required Suppliers | Franchisees must license the Proprietary Software and purchase computer hardware components for the POS System from Winmark. Exterior and interior signs, carpet and flooring must be purchased from an approved supplier designated by Winmark. Broadcast media placement and online advertising for pre-opening and first year marketing must use an approved supplier designated by Winmark. |
| Supply Restrictions | Franchisees must use equipment, signs, fixtures, furnishings, products, supplies and advertising materials meeting Winmark's standards. Only approved categories of products and services may be sold. Used goods must meet Plato's Closet buying standards. |
| Franchisor Revenue from Suppliers | Winmark derived revenues of $3,437,658 from the sale of products, equipment and other items subject to standards (4% of total revenues of $78,216,200) in fiscal year 2021. Revenues from POS system sales to Plato's Closet franchisees alone were $1,239,053. Winmark may receive a rebate of approximately $179,000 per year from Constant Contact. |
Financing (Item 10)
| Detail | Information |
|---|---|
| Financing Available | No |
| Description | Winmark does not offer direct or indirect financing. Winmark does not guarantee any note, lease, or obligation. |
Plato's Closet Franchise Earnings — Item 19
Average Revenue
$1.2M
Median Revenue
$1.2M
Revenue Range
$333K – $3.5M
Sample Size
457 units
Past financial performance does not guarantee future results. Individual results will vary.
Plato's Closet Litigation & Risk Flags
Clean Litigation RecordPlato's Closet 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.
Plato's Closet System Growth
Total Units
489
Franchised
489
Company-Owned
0
Plato's Closet currently operates 489 franchised locations and 0 company-owned units. Unit count data is sourced from Item 20 of the FDD.
Unit History (Item 20)
| Year | Opened | Closed | Total |
|---|---|---|---|
| 2019 | 6 | 3 | 483 |
| 2020 | 5 | 3 | 485 |
| 2021 | 5 | 1 | 489 |
Transfers: 27 | Closures: 1
State Registrations
Registered in 14 states: CA, HI, IL, IN, MD, MI, MN, NY, ND, RI, SD, VA, WA, WI
Franchisor Financials (Item 21)
Revenue
$78.2M
Net Income
$39.9M
Total Assets
$26.9M
Audited by Grant Thornton LLP for year ending December 25, 2021.
Plato's Closet Franchise — FAQ
The total investment to open a Plato's Closet franchise ranges from $269,700 to $407,400, per their Franchise Disclosure Document. This includes the initial franchise fee of $25,000. The investment covers build-out, inventory, equipment, signage, working capital, and other startup costs.
Plato's Closet charges a royalty fee of 5% of Gross Sales of gross sales, plus a Up to 2% of Gross Sales (if Advertising Fund is established) contribution to the marketing/advertising fund. These fees are paid on an ongoing basis.
You can download the Plato's Closet 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 Plato's Closet to ensure you have the most up-to-date version.
According to the Item 19 financial performance representation in their FDD, Plato's Closet franchise owners report average revenue of $1.2M and median revenue of $1.2M. This is based on a sample of 457 units. Past performance does not guarantee future results.
Plato's Closet has been franchising since 1999. The FDD shows an investment range of $269,700-$407,400, a 5% of Gross Sales 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 $25,000 and the total investment ranges from $269,700 to $407,400 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 Plato's Closet and consult a qualified franchise attorney before making any investment decision. FranchiseOverview.com is operated by Franchising Compliance, LLC and is not affiliated with Plato's Closet or any of its subsidiaries. To report an inaccuracy: info@franchiseoverview.com