Clothes Mentor Franchise Cost, Revenue & Review 2026
- Investment
- $308K – $432K
- Disclosed sales
- $820K
- gross sales, not profit
- SBA charge-off
- 7.1%
- on 67 loans
Data from FDD filing + SBA 7(a) records
Analysis by FranchiseVerdict Research · Methodology
Clothes Mentor is a resale-retail franchise buying and selling gently used women's fashion and accessories. Franchisees run stores sourcing inventory directly from local sellers, then pricing and reselling.
FranchiseVerdict summary · 2026
A Clothes Mentor franchise requires a total initial investment of $308K – $432K, including a $25K franchise fee and an ongoing 4.0% royalty[2]. Per the 2026 FDD, average unit revenue was $820K[2]. SBA 7(a) loans show a 7.1% charge-off rate across 67 loans[1]. FranchiseVerdict grade: B (Above average), an editorial assessment, not investment advice. Run a live ROI scan →
Sources, dates and evidence
FDD issued: · Data extracted: · Last cited check: · Staleness risk: low - issued within the last 12 months
Evidence: strong✓ Investment (Item 7)✓ Item 19 status✓ Units and owners (Item 20)✓ SBA loan coverage✓ Litigation (Item 3)✓ Financial statements (Item 21)✓ Franchisor identityhow this is scored7 of 7 headline figures on this page cite a page of the filing.
Overview
- Investment
- $308K – $432K
- 36th pct Retail
- Avg gross sales
- $820K
- Net sales10th pct Retail
- Royalty
- 4.0%
- 3rd pct Retail
- Units
- 113
- 30th pct Retail
- SBA charge-off
- 7.1%
- % of SBA 7(a) loans not repaid · median varies by category
Quick verdict · Retail · color = vs category peers
Green = favorable by >10% vs Retail median · No shading = within ±10% · Red = unfavorable by >10% · Source: FDD filings + SBA 7(a)
Data from public FDD filings and SBA records. Not financial advice. Methodology
Bottom line
- COSTTotal investment $308K – $432K including a $25K franchise fee, 4.0% ongoing royalty.
- RETURNSAverage unit revenue of $820K/year (median $744K).
- RISKVerdict B (Above average), verdict score 69/100 (higher is better). SBA loan charge-off rate of 7.1% across 67 loans (near or below the 16% franchise average, based on all SBA 7(a) franchise lending, 2010–2025).
- GROWTHFlat: no net change in franchised outlets in the latest year (3 opened, 3 closed) (Item 20).
- DECLINESystem 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
Corporate structure & franchisor financials
- Legal entity
- Clothes Mentor, LLC
- Parent company
- NTY Franchise Company, LLC
- FDD Item 1, page 9 of the 2026 FDD
- Predecessor
- OUAM, Inc.
- Prior franchisor entity
- CEO title
- President
- Ronald G. Olson
- CEO experience
- 35 yrs
- Years in role or industry
- Founder active
- Yes
- Original founder still leading the business
- Incorporated in
- DE
- HQ
- 13895 Industrial Park Blvd, Ste 100, Plymouth, MN 55441
- Auditor
- LB Carlson, LLP
- Audited financials
- Franchisor revenue
- $3.8M
- vs $3.8M prior year
- Management churn noted
- Frequent turnover
- Item 2 disclosed frequent executive changes
Affiliated brands
- Device Pitstop
- NTY Clothing Exchange
Other brands the franchisor or its parent operates (Item 1).
Same owner · FDD Item 1, page 9
1 other brand on this site name NTY Franchise Company, LLC as parent or ultimate parent in their own FDD.
Grouped by the owner's name as each filing prints it (this page: the 2026 FDD). Spelling variants of the same group may be listed apart; a brand is never grouped with an owner its filing does not name.
Overview
About
- CEO
- Ronald G. Olson
- Headquarters
- MN
- Founded
- 2006
- FDD year
- 2026
- States available
- 30
Can you afford it, and what does the money buy?
Entry cost runs 10% above the typical retail franchise.
Source: FDD 2026 · Items 5–7
Full Item 7 breakdown15 line items
Initial investment breakdown
| Line item | Low | High | |
|---|---|---|---|
| Initial Franchise Feenot refundable | $25K | $25K | |
| Leasehold Improvements | $25K | $60K | |
| Signs | $5K | $9K | |
| Fixtures and Supplies | $70K | $90K | |
| Proprietary Software and POS System | $25K | $25K | |
| Inventory | $60K | $80K | |
| Deposits, Business Licenses and Permits | $7K | $15K | |
| Legal and Accounting | $0 | $4K | |
| Security | $7K | $10K | |
| Travel Expenses to Attend Training | $4K | $9K | |
| Pre-Opening Labor Expenses | $10K | $15K | |
| Grand Opening Advertising | $16K | $20K | |
| Miscellaneous Pre-opening Expenses | $14K | $20K | |
| Rent - 3 Months | $20K | $25K | |
| Additional Funds - 3 Months | $20K | $25K | |
| Total initial investment | $308K | $432K |
Line items extracted from FDD Item 7. Ranges reflect the franchisor's stated low and high per line. Total is the sum of line-item lows / highs — actual costs may fall outside this range depending on market and build-out scope.
Item 7 · what it costs to open + operate
The Vitals
- Total investment
- $308K – $432K
- Top 40% of category vs category
- Liquid capital req'd
- $20K – $25K
- Top 40% of category vs category
- Franchise fee
- $25K – $25K
- Top 40% of category vs category
- Royalty
- 4.0%
- typical 6–8%
- Ad fund
- $3,000 per year flat NMF Fee (may increase up to $4,000/y…
- Total fee load
- 4.0%
- vs 9–13% typical
Ongoing fees · Item 6
| Fee | Amount |
|---|---|
| Royalty | 4.0% of net sales |
| Technology fee | $2K |
| Training fee | $500 |
| Transfer fee | $8K |
| Renewal fee | $10K |
| Inventory (initial) | $60K – $80K |
| Total fee load | 4.0% of rev |
A 4.0% total fee load is unusually lean. More of each revenue dollar stays with the franchisee.
What do units actually make?
Average unit sales land near the retail norm.
Reported as net sales, not gross sales
Source: FDD 2026 · Item 19
Single-unit · not modelled
Returns at a glance
An FDD discloses gross sales, not profit, and the operating costs that turn one into the other are in no filing. We publish no modelled return for Clothes Mentor until someone supplies them — yours, in the models below.
—
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for ad fund rate, COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
Total invested capital · disclosed
$392K
Item 7 initial investment plus working capital, as filed — the one figure here that needs no assumption.
ROI & LBO modelsSingle-unit · 25-unit portfolio · editable
What one unit earns on your invested capital
Model A · Single-Unit Return
Computes unlevered return on invested capital (ROIC) for a single franchise unit, read against the 30–60% reference band · Yale SOM, Post-MBA Path Exhibit 2 (2023). Below that band a passive index fund likely outperforms; above it the franchisor has pricing power you're subsidizing.
Note: Item 19 revenue is what the franchisor discloses, and it is the top line only — gross sales are not profit. No FDD discloses the operating costs that turn one into the other, so those fields start empty and nothing is modelled until you supply them from your own lease quote, labor market and build-out budget.
Returns model · single-unit ROIC
What would one Clothes Mentor unit return on the cash you put in?
Illustrative category typicals — not sourced to any filing, survey or sample. Replace them with figures from franchisee validation calls before you rely on the output.
Unlevered ROIC · per unit
Your modelled return on total invested capital, before any debt financing.
—
An FDD discloses gross sales, not profit. We hold no sourced figure for ad fund rate, COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
What 25 units return when you use SBA financing
Model B · Return on Equity: Debt-Financed Acquisition
Models a 25-unit portfolio acquisition financed with an SBA 7(a) loan. Shows equity IRR (your return on cash invested), DSCR (how safely the cash flow covers debt service), and the capital stack (SBA + seller + equity breakdown).
This is the “search fund” or “entrepreneurship through acquisition” scenario: you buy an existing multi-unit operator, use leverage to amplify returns, and either operate or hire management. The 25-unit size is the typical minimum for an SBA-backed franchise portfolio acquisition to pencil as a full-time income.
What “return on equity” means here: if you put in $500K of your own cash and the business generates enough EBITDA to pay down debt and grow, your equity IRR is the annual return on that $500K, including the value created when you eventually sell. Target IRR for a search fund is typically 25–35%.
Not modelled yet
An FDD discloses gross sales, not profit. We hold no sourced figure for ad fund rate, COGS, labour, rent / occupancy and other operating costs, and will not substitute an assumed one. Enter your own and the model runs on your assumptions.
A 25-unit return is built on a per-unit EBITDA. Fill in the operating costs in Model A above and this model runs on that figure, or take the whole scenario to the full ROI workbench, where the portfolio and LBO models accept your own per-unit economics directly.
These models are for research and scenario planning only. Not investment advice. Actual results depend on your specific location, management, and market conditions. Consult a franchise attorney and accountant before signing any franchise agreement.
Item 19 · Source: 2026 FDD
Financial Performance
Reported as net sales, not gross sales
- Avg gross sales
- $820K
- Per unit, per year
- Median gross sales
- $744K
Gross sales are revenue before expenses — not profit. Actual owner earnings depend on rent, labor, royalties, marketing fees, and debt service.
- Item 19 type
- Net Sales and Gross Profit by quartile, 3 years
- Sample size
- 103 outlets
- vs category median 46 · large
- Range (low → high)
- $183K→$2.4MCited, not corroborated — printed on page 37 of the 2026 FDD. Nothing else in our record independently restates or re-derives it.
- Cohort dispersion (min → max)
- Quartile band
- $385K→$1.3M
- Bottom 25% → top 25%
- Reporting year
- 2025
- Fiscal year the figures cover
- Source filing
- FDD 2026
- Disclosed in the 2026 filing, covering 2025
- Transparency
- 6 / 10
- vs category median 3 / 10 · above
Compared against 278 Retail brands
Operator outlook
What the numbers say
Data-driven interpretation of this brand's financial disclosures, fee structure, and system trajectory.
Unit economics
Average unit generates $820K/year in gross sales. Revenue-to-investment ratio: 2.2x.
Fee burden
Total ongoing fee load of 4.0% — below the Retail median of 8.0%.
Disclosure
Transparency score 6/10 — this franchisor discloses detailed breakdowns (quartiles, segments, or cohort data). Buyers can model unit economics with higher confidence.
Operator retention
System contracting at -5.8% CAGR over 3 years. Investigate whether closures are franchisor-driven consolidation or franchisee exits.
Source: FDD Item 19 financial performance representations and publicly filed FDD data. Past performance is not indicative of future results. Verify all figures with the franchisor and current franchisees before making any investment decision.
vs Retail medians
How Clothes Mentor Compares
Category median of published Retail brands that report the figure; the middle half spans the 25th to 75th percentile and n counts the brands behind it. Medians are used because a few very large systems pull an average far from the typical brand. Revenue is disclosed gross sales, not profit.
Is the system healthy?
Source: FDD 2026 · Item 20
Unit growth
Item 20 · unit dynamics
The Growth Chart
- Total units
- 113
- Opened
- 3
- Last reporting year
- Closed
- 3
- Terminated
- 0
- Franchisor ended the franchise (per Item 20)
- Non-renewed
- 0
- Term expired, not renewed (per Item 20)
- Turnover rate
- 2.7%
- Company-owned
- 0
- Corporate units in the system
- % franchised
- 100%
- vs corporate-owned
- Net growth (3-yr)
- -5.8%
- Net unit change over 3 years
- 3-yr CAGR
- -5.8%
- Compounded over last 3 years
Last fiscal year · Item 20 exits and transfers
- Terminated
- 0
- Not renewed
- 0
- Transferred
- 6
- Reacquired
- 0
- Franchisor bought back
- Transfer rate
- 5.3%
- Owners selling to other franchisees
- Ceased ops
- 2.6%
- Units that stopped operating
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 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.
Available to sell in · Item 12
- Michigan
States where the franchisor is registered to sell new franchises (FDD registration filings).
Where the owners are · Item 20 owner list
95 current owners across 28 states.
- OH 18
- MN 8
- IL 7
- FL 6
- NC 6
- TX 5
- IN 4
- MO 4
- SC 4
- CO 3
- GA 3
- KY 3
- +16 more states
Counts only, from the list the franchisor prints in Item 20. Names and phone numbers are for your own due diligence and are not shown here.
SBA loan performance
Government records
SBA Loan Data
Aggregated from SBA 7(a) and 504 loan disclosures, public data unique to FranchiseVerdict.
- Total loans
- 67
- Loan volume
- $12.8M
- Median loan
- $186K
- 50th percentile
- Charge-off rate
- 7.1%
- on 67 loans · 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)
- 92.7%
- 5-yr charge-off
- 25.0%
- Loans approved 2021+
- Active lenders
- 29
- Defaults
- 3
- Typical loan rate
- 6.4%
- avg rate to borrowers
- Franchised industry avg
- 5.8%
- brand above franchise avg ↑
- Jobs supported
- 674
- 6.2 per loan
- Lender concentration
- 27%
- top lender's share
Borrower mix: 81% went to startups / new businesses, 19% to established operators
Franchise vs independent — in used merchandise stores, franchised businesses charge off at 5.8% vs 19.5% for independents — franchising is associated with 70% lower SBA default risk in this category.
Vintage analysis
Clothes Mentor charge-off rate by loan vintage
Top lenders financing Clothes Mentor franchisees
Showing 3 of 29 lenders. The full breakdown — every lender, state distribution, interest rates & risk ratings — is in the SBA Lending Report below.
Explore lender portfolios on Bank Reports or regional data on State Reports.
Lender network · 7(a) + 504
SBA Lending Report
Full lending analysis for Clothes Mentor from SBA 7(a) FOIA data.
- Principal loss rate
- 2.9%
- Avg SBA guarantee
- 71%
- Avg interest rate
- 6.44%
- Avg chargeoff amount
- $105K
- Lender concentration
- 27.3%
- Job velocity
- 6.2 per $100K
- NAICS benchmark
- 7.0%
- NAICS 453310
- Jobs supported
- 674
Top SBA lendersTop lender holds 27% of loans
| # | Lender | Loans | Volume | Default % |
|---|---|---|---|---|
| 1 | Wells Fargo Bank National Association | 15 | $3.1M | 18.2% |
| 2 | Sunrise Banks National Association | 5 | $789K | 0.0% |
| 3 | U.S. Bank, National Association | 4 | $853K | 50.0% |
| 4 | INB, National Association | 4 | $390K | 0.0% |
| 5 | The Huntington National Bank | 2 | $308K | 0.0% |
| 6 | Manufacturers and Traders Trust Company | 2 | $375K | 0.0% |
| 7 | Bank of America, National Association | 2 | $299K | 0.0% |
| 8 | Stearns Bank National Association | 2 | $450K | 0.0% |
| 9 | Citizens Bank of Chatsworth | 1 | $200K | 0.0% |
| 10 | CoBiz Bank | 1 | $150K | 0.0% |
Geographic failure vector
| State | Loans | Defaults | Rate |
|---|---|---|---|
| FLFlorida | 6 | 0 | 0.0% |
| MNMinnesota | 6 | 0 | 0.0% |
| TXTexas | 6 | 1 | 50.0% |
| ILIllinois | 5 | 0 | 0.0% |
| COColorado | 3 | 0 | 0.0% |
| MDMaryland | 3 | 0 | 0.0% |
| MOMissouri | 3 | 0 | 0.0% |
| PAPennsylvania | 3 | 1 | 33.3% |
| AZArizona | 2 | 1 | 50.0% |
| MIMichigan | 2 | 0 | 0.0% |
SBA 7(a) lending trend
Borrower profile
Source: SBA 7(a) + 504 FOIA loan-level data, matched by FranchiseVerdict
What could kill this investment?
SBA loans charge off at 7.1% — 56% below the 16.0% national norm, i.e. lower lender-observed risk.
Source: SBA 7(a) FOIA · FDD Items 3, 21
Risk analysis
FranchiseVerdict rating + FDD Items 3, 4, 8, 16, 21
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.
Litigation (Item 3)
Subject: the franchisor is a named party (defendant).
Two concluded arbitrations: (1) CSW Strategic Solutions et al. v. NTY Franchise et al. (2020) — settled Aug 2021 for $400,000; (2) Transcendent Business Holdings et al. v. NTY Franchise et al. (2019) — settled Jan 2020 for $650,000. Both involved Children's Orchard/NTY affiliates naming Clothes Mentor officers; no Clothes Mentor stores directly involved.
Bankruptcy (Item 4)
None disclosed
Audited financials (Item 21)
Yes · LB Carlson, LLP
Franchisor revenue (Item 21)
Franchisor entity revenue (not unit-level)
2025 total revenue of $3,800,265 was driven primarily by royalty fees ($3,492,377); franchise fees were $100,904 and marketing fund contributions $206,984. Net income $1,116,162 includes $23,515 interest income.
Supplier relationship · Items 8 & 16
- Franchisor sells you products: No
- Kickbacks from required suppliers: No
- Must buy proprietary products: No
- Restricted to system-approved products: Yes
- Can negotiate own supplier terms: No
Score breakdown · what drove the 69 / 100 verdict
- 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
What are you signing up for?
Ongoing fees run about 4.0% of sales (royalty + ad fund), before rent and labor.
Source: FDD 2026 · Items 11, 12, 17
FDD Items 12, 15, 17 · continued from Risk & Legal
Contract & Territory Detail
| Initial term | 10 years |
|---|---|
| Renewal term | 10 years |
| Allowed renewalsℹ | 1 |
| Territory type | Exclusive territory |
| Protected territory | Yes |
| Exclusive territoryℹ | Yes |
| Territory radius | 2 mi |
| Territory population | 50,000 |
| Online sales rightsℹ | Granted |
| Franchisor can compete | Yes |
| Hire a manager? | Allowed |
| Owner-operator | Required |
| Non-compete (years)ℹ | 2 years |
| Non-compete (miles)ℹ | 10 mi |
| Right of first refusalℹ | Yes |
| Transfer requires consent | Yes |
| Termination notice | 30 days |
| Termination groundsℹ | 1 |
| Curable defaultsℹ | 2 |
| Mandatory arbitration | Yes |
| Arbitration location | Minneapolis, Minnesota |
| Jury trial waiver | No |
| Governing law | state where Store is located |
| Litigation count | 2 |
View Item 3 litigation summary
Two concluded arbitrations: (1) CSW Strategic Solutions et al. v. NTY Franchise et al. (2020) — settled Aug 2021 for $400,000; (2) Transcendent Business Holdings et al. v. NTY Franchise et al. (2019) — settled Jan 2020 for $650,000. Both involved Children's Orchard/NTY affiliates naming Clothes Mentor officers; no Clothes Mentor stores directly involved.
Items 10, 11
Training & Operations
- Classroom training
- 49 hrs
- On-the-job training
- 53 hrs
- Training location
- Plymouth, MN or designated location
- Ongoing training
- Required
- Field support
- 28 hrs/yr
- On-site visits per year
- Time to open
- 9 mo
- From signing to launch
- Site selection
- franchisee with franchisor approval
- Franchisor financing
- Not offered
- Item 10
- POS system
- Resale1 Proprietary Software and POS System
- Operating tech stack
Items 5 & 11
Franchisor Support
Technology: Resale1 Proprietary Software and POS System
Item 20 · call current owners
Franchisee Contacts
95 owners to call
Name · phone · city · state. Extracted from FDD Item 20
Frequently asked questions
Frequently Asked Questions
How much does it cost to open a Clothes Mentor franchise?
The total investment to open a Clothes Mentor franchise ranges from $308K – $432K, with an initial franchise fee of $25K. This includes real estate, equipment, inventory, and working capital as disclosed in their Franchise Disclosure Document (FDD).
What do Clothes Mentor franchise owners earn?
According to Item 19 of the Clothes Mentor FDD, the average gross sales per unit is $820K. The median is $744K. Important context: Reported as net sales, not gross sales. Note: this is gross revenue, not profit. Actual owner earnings vary based on location, operating costs, and management.
Who owns Clothes Mentor?
Clothes Mentor is franchised by Clothes Mentor, LLC. Its parent company is NTY Franchise Company, LLC. Source: FDD Item 1, 2026 filing.
What is Item 19 in the Clothes Mentor FDD?
The FDD section where a franchisor may disclose financial performance of its outlets. Disclosure is optional and formats vary; figures are typically gross sales, which is revenue before expenses, not profit. FranchiseVerdict extracts these figures directly from the Clothes Mentor FDD and qualifies whose outlets they describe.
What is Clothes Mentor's franchise failure rate?
Based on SBA 7(a) loan data, Clothes Mentor has a charge-off rate of 7.1% across 67 loans, meaning 7.1% 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 Clothes Mentor franchise locations are there?
As of their most recent FDD filing, Clothes Mentor has 113 total units in the United States, including 113 franchised units and 0 company-owned units. 3 new units were opened in the latest reporting year.
Is Clothes Mentor a good franchise to buy?
FranchiseVerdict rates Clothes Mentor as a B-grade franchise with a verdict score of 69 out of 100 (higher is better). The grade is a deterministic score built from six weighted dimensions — financial health, unit economics, unit growth, scale, legal, and transparency — then calibrated against SBA loan charge-off rates and FDD age. Transparency is one of the six, so a filing that discloses less scores lower on that dimension than one that discloses more. 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.