Bottom line
- Total investment $308K – $432K including a $25K franchise fee, 4.0% ongoing royalty.
- Average unit revenue of $820K/year (median $744K).
- Rated MODERATE with a risk score of 55/100. SBA loan default rate of 0.0% across 80 loans (below the industry average).
- System contracting at -5.8% CAGR over 3 years. Investigate whether closures are franchisor-driven (consolidation) or franchisee-driven (economics).
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 Clothes Mentor unit return on the cash you put in?
Unlevered ROIC · per unit
17%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Clothes Mentor units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$164K
on $820K purchase
Total debt
$656K
SBA $0.4M + senior + seller note
Overview
About
Clothes Mentor franchisees operate consignment and resale clothing retail stores focused on women's and children's apparel. Day-to-day operations include inventory acquisition (consignment negotiations), visual merchandising, point-of-sale transactions, staff management, and customer service in a thrift-to-upscale secondhand retail environment.
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 · 28 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
Clothes Mentor presents meaningful litigation history tied to financial misrepresentation, undisclosed profitability metrics, and unclear unit growth, warranting caution despite reasonable royalty rates and protected territory.
Score breakdown · what drove the 55 / 100 rating
- 01HIGHTwo concluded arbitrations involving fraud and breach of contract claims with $1.05M in combined settlements raise credibility concerns about financial performance representations
- 02MEDNet Income not disclosed in Item 19 prevents validation of the $819,550 average revenue figure and makes ROI analysis impossible
- 03MINORUnknown unit growth trajectory over 10+ years of operation with only 113 units suggests stagnation or inconsistent expansion
- 04MED4% royalty on total net sales (not gross) is favorable, but paired with undisclosed profitability creates opacity around true franchisee earnings
- 05MEDHigh initial investment range ($308K-$431.5K) relative to disclosed revenue without corresponding net income data increases financial risk
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
95 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Clothes Mentor · FDD (2026) PDF