Closet FactoryFranchise Cost, Revenue & Review 2026
Data from FDD filing + SBA 7(a) records
FranchiseVerdict summary · 2026
A Closet Factory franchise requires a total initial investment of $393K – $664K, including a $59K franchise fee. Per the 2025 FDD, average unit revenue was $6.1M[2]. SBA 7(a) loans show a 29.3% charge-off rate across 41 loans[1]. Verdict grade: F. Run a live ROI scan →
Data last verified June 21, 2026 · figures per the 2025 FDD issuance
Overview
- Investment
- $393K – $664K
- 76th pct Home Services
- Avg gross sales
- $6.1M
- 51st pct Home Services
- Royalty
- N/A
- Units
- 92
- 52nd pct Home Services
- SBA default
- 29.3%
- system-wide median varies by category
Quick verdict · Home Services · color = vs category peers
Green = >15% above Home Services avg · No shading = within ±15% · Red = >15% below avg · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Each dollar invested generates 11.5x in gross revenue, well above the typical 1.5-2.5x range.
29.3% of SBA loans charged off across 41 loans, above the 16% franchise average.
Franchising since 1985. Systems this mature have refined operations and brand recognition.
Bottom line
- Total investment $393K – $664K including a $59K franchise fee.
- Average unit revenue of $6.1M/year (median $4.6M).
- Verdict F (Bottom Quintile) with a risk score of 80/100. SBA loan charge-off rate of 29.3% across 41 loans (well above the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2024).
- System growing at 16.2% CAGR over 3 years with 92 total units. Strong expansion trajectory.
Item 1 · who you're contracting with
The Franchisor
- Legal entity
- The Closet Factory Franchise Corporation
- Incorporated in
- CA
- HQ
- 12800 South Broadway, Los Angeles, California 90061
- Auditor
- Jonathon P. Reuben, CPA
- Audited financials
- Franchisor revenue
- $18.2M
- vs $18.7M prior year
Overview
About
Franchisees operate custom closet design and installation businesses, managing client consultations, space measurements, product selection, and installation of organizational systems. Day-to-day activities include showroom operations, design appointments, project management, and coordinating installation crews while maintaining inventory and managing customer relationships.
- CEO
- John F. La Barbera
- Headquarters
- CA
- Founded
- 1985
- FDD year
- 2025
- States available
- 32
FDD Item 7 · 2025 filing
Initial investment breakdown
| Cost component | Low | High |
|---|---|---|
| Initial franchise fee | $59K | $59K |
| Working capital (3–6 mo) | $60K | $100K |
| Equipment, build-out, other | $274K | $505K |
| Total initial investment | $393K | $664K |
Source: Closet Factory 2025 FDD, Items 5 and 7[2]. “Equipment, build-out, other” is computed as total minus disclosed line items above.
Single-unit · estimated
Returns at a glance
Indicative numbers using FDD Item 7 / Item 19 inputs and category-benchmarked cost ratios. Full single-unit, 25-unit portfolio, and LBO models (with every input editable to stress-test your own scenario) live on the financials page.
Store EBITDA · annual
$610K
10.0% margin
Unlevered ROIC
100%
EBITDA / total invested capital
Payback
12 mo
cash-on-cash, unlevered
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $393K – $664K
- Below avg, review vs category
- Liquid capital req'd
- $60K – $100K
- Below avg, review vs category
- Franchise fee
- $59K – $59K
- Near category avg vs category
- Royalty
- Equal to the greater 6.75% of Gross Receipts or $975 per …
- Ad fund
- -n/d
- Total fee load
- 21.8%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Technology fee | $94 |
| Transfer fee | $19K |
| Renewal fee | $7K |
| Total fee load | 21.8% of rev |
At 21.8% total fee load, roughly $1326K per year goes to the franchisor before you pay a single operating expense.
Financial Performance
- Avg gross sales
- $6.1M
- Per unit, per year
- Median gross sales
- $4.6M
- Item 19 type
- gross_sales
- Sample size
- 47 units
- vs category median 25
- Range (low → high)
- $351K→$39.1M
- Cohort dispersion (min → max)
- Transparency
- 4 / 5
- vs category median 4 / 5 · typical
Compared against 349 Home Services brands
Revenue is 11.5x the investment midpoint. At typical franchise margins, this suggests a payback under 3 years.
vs Home Services averages
How Closet Factory Compares
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 92
- Opened
- 9
- Last reporting year
- Closed
- 1
- Turnover rate
- 1.1%
- Company-owned
- 6
- Corporate units in the system
- % franchised
- 94%
- vs corporate-owned
- Net growth (yr3)
- +10.3%
- Net unit change last year
- 3-yr CAGR
- +16.2%
- Compounded over last 3 years
3-year detail · Item 20
- Transfers (3yr)
- 4
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 16 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator. Not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee contact records (FDD Item 20). Shows states with at least one current operator on file. Full state registration data (Item 12) will appear on a future FDD refresh.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 41
- Loan volume
- $8.2M
- Median loan
- $142K
- 50th percentile
- Charge-off rate
- 29.3%
- rates vary by category · see methodology
Historical SBA 7(a) lending data, not predictive of future performance. How SBA charge-off rates are calculated
- Repayment rate (PIF)
- 70.7%
- 5-yr charge-off
- N/A
- Loans approved 2021+
- Active lenders
- 10
- Defaults
- 12
Explore lender portfolios on Bank Reports or regional data on State Reports.
Premium insight
SBA Lending Report
Deep-dive into Closet Factory's SBA lending history: lender network, geographic footprint, interest rates, and more.
SBA Lending Report
- Principal loss rate and NAICS industry benchmark
- 10 lenders with concentration factor
- Per-state charge-off rates across 14 states
- Startup risk premium and job creation velocity
- 7-year lending trend
- SBA 504 real estate/equipment data
Instant access. No subscription.
A 29.3% charge-off rate means roughly 1 in 3 franchisees failed to repay their SBA loan. Investigate what changed.
Risk analysis
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Closet Factory presents moderate-to-cautionary risk due to undisclosed profitability metrics, high capital requirements, modest unit growth, and franchisor financial concerns despite strong gross revenue figures.
Audited financials (Item 21)
Yes · Jonathon P. Reuben, CPA
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
Score breakdown · what drove the 80 / 100 rating
- 01MEDNet income not disclosed in Item 19 — unable to verify actual profitability despite $609k avg revenue
- 02MINORHigh minimum investment ($392.5k) with dual royalty structure (6.75% or $975/week minimum) creates fixed cost burden
- 03MINORModest unit growth (10.3% YoY) with only 92 locations suggests slower expansion and market saturation concerns
- 04MINOR5-year term is shorter than industry standard (10 years), requiring earlier renewal negotiation and uncertainty
- 05HIGHGoing Concern status is 'False' — potential financial instability or accounting irregularities at franchisor level
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 5 years |
|---|---|
| Renewal term | 5 years |
| Territory type | Geographic |
| Protected territory | Yes |
| Online sales rights | Restricted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Optional |
| Non-compete (years)ℹ | 2 years |
| Right of first refusalℹ | Yes |
| Termination notice | 30 days |
| Mandatory arbitration | Yes |
| Jury trial waiver | Yes |
| Governing law | Varies |
| Litigation count | 0 |
Items 10, 11
Training & Operations
- Classroom training
- 49 hrs
- On-the-job training
- 41 hrs
- POS system
- ClosetWare
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: ClosetWare
Item 20 · call current owners
Franchisee Contacts
21 owners to call
Name · phone · city · state. Extracted from FDD Item 20
FDD download
Closet Factory · FDD (2025) PDF
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Closet Factory franchise?
The total investment to open a Closet Factory franchise ranges from $393K – $664K, with an initial franchise fee of $59K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Closet Factory franchise owners earn?
According to Item 19 of the Closet Factory FDD, the average gross sales per unit is $6.1M. The median is $4.6M. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
What is Closet Factory's franchise failure rate?
Based on SBA 7(a) loan data, Closet Factory has a charge-off rate of 29.3% across 41 loans, meaning 29.3% of franchise loans were charged off. Charge-off rates are one proxy for franchise risk, though they do not capture all closures. This data comes from FOIA-sourced SBA lending records.
How many Closet Factory franchise locations are there?
As of their most recent FDD filing, Closet Factory has 92 total units in the United States, including 74 franchised units and 6 company-owned units. 9 new units were opened in the latest reporting year.
Is Closet Factory a good franchise to buy?
FranchiseVerdict rates Closet Factory as a F-grade franchise with a risk score of 80 out of 100, based on our analysis of investment costs, revenue data, SBA loan performance, and growth trends. Our rating is based solely on publicly available FDD and government data; we recommend speaking with current franchisees before making any investment decision. This is not investment advice.
Data sourced from public FDD filings and SBA 7(a) FOIA records. Not financial advice.
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Data extracted from public FDD filings and SBA 7(a) loan disclosures (FOIA). This information is provided for research purposes only and does not constitute financial, legal, or investment advice. Verify all figures with the franchisor's current Franchise Disclosure Document before making any investment decision.