Closets By Design
Formerly known as CBD American Shaman
Bottom line
- Total investment $154K – $511K including a $20K franchise fee.
- Average unit revenue of $9.9M/year (median $7.2M).
- Rated MODERATE with a risk score of 58/100. SBA loan default rate of 0.0% across 64 loans (below the industry average).
- System growing at 1970% CAGR over 3 years with 85 total units — strong expansion trajectory.
Item 1 · who you're contracting with
The Franchisor
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one Closets By Design unit return on the cash you put in?
Unlevered ROIC · per unit
279%
Above typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Closets By Design units return on equity?
Equity IRR · 5-yr
24.6%
3.00× MOIC
Year-1 DSCR
3.46×
EBITDA ÷ debt service
Equity required
$21.1M
on $37.3M purchase
Total debt
$16.2M
SBA $5.0M + senior + seller note
Overview
About
Franchisees operate custom closet design and installation businesses, managing in-home consultations, design work, product ordering, and installation services. Daily operations include client meetings, CAD design work, vendor coordination, and installation team management within a protected territory.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 43 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 phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Closets By Design presents high risk due to franchisor going concern status, multiple active lawsuits including class action and RICO allegations, anemic unit growth, and lack of Item 19 financial disclosure.
Score breakdown · what drove the 58 / 100 rating
- 01HIGHGoing Concern designation indicates franchisor financial distress and potential inability to support franchisees
- 02HIGHMultiple active litigations including consumer class action, RICO allegations, and non-compete disputes signal systemic operational/compliance issues
- 03MINORStagnant unit growth (3.9% YoY) with only 85 units suggests market saturation or franchisee dissatisfaction
- 04MEDNo disclosed net income data prevents ROI validation; high royalty floor ($3,000/month = $36,000/year minimum) on undisclosed profitability is concerning
- 05HIGHHistory of concluded litigation over unpaid royalties and abandonment indicates franchisor-franchisee relationship breakdown
- 06MEDInvestment range ($154K–$511K) is substantial relative to disclosed unit economics and franchisor stability
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
98 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Closets By Design · FDD (2025) PDF